State of UK buy-and-build

Method and limits

• Source. Every figure comes from Companies House: the register of people with significant control, filed accounts and company records. Nothing is taken from press releases or from the platforms themselves.
• What a deal is. A change of control filed on the register of people with significant control: a company that had traded for at least a year passes from its individual owners to a buy-and-build platform. Two companies bought on one day count as one deal. Moves inside a group, founders restructuring and property or dormant companies are left out.
• What is missed. Asset purchases, deals outside the UK and deals not yet filed. A platform enters the register at its third deal in five years, so its first two count once it gets there. Every count is a floor, and the latest half rises for months as filings arrive.
• Platforms. A buyer with at least three such deals in five years, active while it has made one in the last two, and new in the half of its third deal. Companies trading under one name count as one platform. Investment firms buying directly are left out. Backers are read from the ownership chain on the register.
• Comparisons. A half-year keeps filling in for about a year after it ends, so recent halves always look smaller than they will. We print a change only between halves that ended at least a year before we measured. From the second edition we also compare each half with the same half a year earlier at the same point of filling in, from our monthly record of the register.
• Window. The register holds five years of deals, so the series starts in H1 2022. Trades are the bought company's main activity today.
• EBITDA going in. For each company bought, we take the EBITDA in its last accounts before the deal and show the median. Most small companies don't publish a profit and loss account, so for those we estimate EBITDA from the balance sheet. When we checked these estimates against the full accounts the same companies filed later, they came out about 27% too low on average, mainly because dividends paid to owners don't show on the balance sheet. The gap varies by sector, from about 14% in food, beverage & tobacco wholesale to 58% in consultancy services, so we adjust each estimate by the gap measured for its own sector.
• Sub-trades. Read from each bought company's own description. Not every company is labelled yet, so sub-trade counts cover the labelled ones and grow as labelling continues; a company can sit in more than one.
• Ownership and the seller pool. Active companies with £250k–£5m of EBITDA, from filed accounts or, where small companies file no profit and loss, our estimate. "Part of a group" means owned by another business; a personal holding company owned by the directors counts as individual ownership. This edition reads ownership from our published trade factsheet, which covers the trades with enough companies in our top band; the monthly measurement of every trade replaces it from the next edition.
• Exit readiness. Our model rates every company on its filings for how likely an owner is to sell in the next few years; the top band is the companies we list as ready.
• Naming. Platforms are named only from a public source, under the name they trade as, alphabetically and without a count. A company that was bought is never named.