Serial acquirers: the compounding machines that buy small and win big

In 1976 an unremarkable Swedish wholesaler listed with revenue of 167 million krona. Fifty years later, one krona put into that stock had become 7,500. Not from an invention. Not from one big bet. Just from doing one small thing over and over, almost to the point of boredom.

Everyone knows Warren Buffett and Berkshire Hathaway. But there is another group of businesses, far quieter, that pushed Buffett's own formula further, and almost nobody in Vietnam mentions them.

In 2025 three Norwegian fund managers at REQ Capital, Oddbjørn Dybvad, Kjetil Nyland and Adnan Hadžiefendić, published The Compounders. William Thorndike, author of The Outsiders, wrote the foreword and called it an excellent summary of a phenomenon still too little known. The book tells the stories of nine businesses from Sweden, North America and Britain: nine compounding machines that turned modest profits and small acquisitions into fortunes.

They are called serial acquirers. Or more precisely: acquisition-driven compounders.

A machine nobody teaches at school

Picture a business model so simple it is suspicious.

You own a small profitable business. Each year it produces cash. Instead of paying it all out as dividends or burning it on a glamorous project, you use that cash to buy another small business, also profitable, also leading a tiny niche. Then you leave it alone, letting the existing management keep running it. The following year the combined cash flow buys a third. And so on.

That is the entire secret. Not a private-equity roll-up to be resold. Not headline billion-dollar deals. Just buying small private businesses, usually family owned, in fragmented markets, and holding them essentially forever.

What makes the model special is not what they buy, but how they operate afterwards.

Four shared rules

The nine companies differ enormously by industry, from aircraft parts to scientific instruments, software and industrial tools, but they share almost identical DNA.

Capital allocation is the primary engine. None of them invented a revolutionary product. Their advantage is reinvestment discipline: take cash flow from existing operations, buy more businesses with high returns, repeat. The machine feeds itself.

Radical decentralisation. This is the part Vietnamese readers notice least. Its root is in Sweden. Jan Wallander, who ran Handelsbanken through the 1970s and 80s and wrote a book literally titled Decentralization, pioneered the philosophy: keep head office as thin as possible, push decision rights down to the front line, closest to the customer. The serial acquirers' philosophy is a variant: give operators responsibility, genuine autonomy, and incentives aligned with shareholders, then get out of the way.

Dominate a niche. They do not buy the leader of a large market and then fight to the death. They buy the sole occupant of a market so small no large competitor will bother entering.

Hold forever. They are permanent owners, not speculators waiting to exit. Time is the weapon, not the enemy.

The four rules sound obvious. But keeping discipline with them across decades is something almost nobody manages, and that is what is worth learning.

The Swedish dynasty

The 7,500-fold story at the top belongs to Bergman & Beving, founded in 1906.

The company's turning point is tied to one name: Anders Börjesson. He started as an external audit consultant, known for finding a tax filing error that saved the company millions. In 1979 he joined the group's board. In 1981, with his mentor Torsten Fardell, he created an unusual metric: EBITA divided by working capital, aimed at forcing the business model to be capital light. In 1990 he became CEO. From 1976 to 2001, Bergman & Beving's earnings per share grew 18% a year, with total shareholder return of 25% a year.

And here is the genius part. In his final year, 2001, Börjesson did not try to hold the empire together. He split it, listing Addtech and Lagercrantz as separate independent companies. The Swedish financial press later called Bergman & Beving the "ancestral parent of stock-market rockets", the mother of four other listed serial acquirers in Sweden, including Indutrade in the same philosophical line.

But the best story is a failure.

After spinning off Addtech and Lagercrantz, what remained was renamed B&B Tools and began going against its own DNA. They tried vertical integration: building a retail chain, rolling up distributors, attempting to consolidate a whole fragmented market into an empire. The same board that approved the successful split approved this centralising strategy. The result: it did not work. A company with a hundred years of success on a decentralised model was still tempted to abandon its own discipline, and it took years of further splits and repeated renamings to get back to its roots.

That inverse lesson is worth more than any sermon: abandoning decentralisation to build an empire is a form of slow suicide.

Lifco: when a capitalist meets an operator

If Bergman & Beving is the dynasty, Lifco is the loveliest story about a pairing: an owner and an operator.

Lifco was founded in 1946 as a central purchasing unit for medical equipment in Sweden. In 1998 it split from the Getinge group and had a difficult listed spell. In 2000 the industrialist Carl Bennet took Lifco private. He paid 30 million euros, divested the food division, and recovered his entire investment almost immediately. A classic bargain.

The man he chose to run it was Fredrik Karlsson, then 30. Karlsson became Bennet's student. In the early stage he focused on one boring task: improving profitability, simplifying the group, pushing responsibility downward. The real turning point came in 2006, when Karlsson evolved from a restructuring operator into a capital allocator, and began buying systematically.

The result is hard to believe. From 1998 to 2019 under Karlsson, Lifco's profit rose a hundredfold through pure acquisition, with a handful of staff, run from a modest head office in Enköping, a town of 25,000. EBITA margin rose from about 11% when he started buying in 2006 to around 22% today.

Lifco's acquisition criteria capture the model's essence: niche-leading businesses with durable customer relationships, selling essential products that are only a small share of the customer's wallet, small enough that the customer does not bother haggling, essential enough that they cannot drop it. That is pricing power.

Heico: a father, two sons and a paperwork process

Across the ocean, in Florida, is a family story.

In 1990, Larry Mendelson and his two sons Eric and Victor became the largest shareholders and took over Heico, then a small struggling aviation company with $26 million of revenue and a similar market capitalisation. They were not aviation people; Larry came from real estate. But they understood one thing: capital allocation.

Heico's competitive advantage rests on something surprisingly dull: the PMA approval. This is the authorisation to manufacture replacement aircraft parts without going through the original manufacturer, ensuring the OEM does not monopolise the parts market. Decades of evidence show quality is no different, while airlines save 30–50% of cost. The elegant part is that the PMA process itself creates a barrier: you need engineering expertise to reverse-engineer each component, and the FAA itself can only approve at a limited rate. Heico has led that niche for three decades.

From 1990 to the end of 2019, Heico's operating cash flow grew 22% a year and the stock compounded at 23% a year, a record on par with Berkshire. By early 2025 Larry had moved to executive chairman with his two sons as co-CEOs. Family succession, in the spirit of holding forever.

Judges Scientific: the man who "stumbled" into a hundredfold

Not everyone starts with a genius plan. David Cicurel started with the wrong one.

Cicurel is French and spent most of his early career as a "company doctor", restructuring ailing businesses in France and then in Britain. In 2002 he founded Judges Scientific with £2 million. It listed on AIM in January 2003 at 95 pence. The timing was awful: two months later the market surged, wiping out his original idea of activist investing, buying stakes in small companies and selling them on to funds at a higher price.

He had to pivot. In 2005, Cicurel abandoned the old strategy and moved to a buy-and-build model: acquiring private businesses designing and manufacturing scientific instruments, with a cold valuation criterion of six times earnings or less. And he stumbled onto a gold mine: Britain's scientific instrument sector is full of tiny companies dominating a minuscule global niche.

Judges' profit formula is simple enough to write in one line: about 13% after-tax return on the original purchase price, plus 7–9% organic growth, compounding to around 20% a year. Highly disciplined on entry multiples, obsessive about return on capital. In 19 years Judges issued only four profit warnings. The stock became roughly a hundredfold investment. In early 2026 Cicurel stepped down as CEO, handing over to a successor, having built a decentralised group from nothing.

The remaining names

The nine also include AMETEK in America, a "Growth Model" variant integrating operational excellence with strategic acquisition, targeting double-digit EPS growth every year. And Constellation Software under Mark Leonard, a software acquisition machine returning 375-fold since 2006, known for data-driven price increases based on customer churn.

Here is the full record, per REQ's published figures:

Lifco's figure looks "low" only because it is measured from the 2014 IPO; Karlsson had already compounded profit a hundredfold since 1998.

Does this model work in Vietnam?

This is the question worth asking for a QuietVC reader.

Try it with Vietnamese numbers. The 10-year government bond yields about 5% a year, the minimum threshold, the risk-free rate every dong of capital must beat to be worth deploying. A serial acquirer buying businesses at six to seven times earnings locks in an initial return of roughly 14–16%. In other words: buying a business earning 10 billion dong a year for 60–70 billion. Against a 5% bond, that is an enormous margin of safety, the same margin of safety applied to buying whole businesses rather than individual shares.

Vietnam has an abundance of raw material for this model: thousands of small and mid-sized family businesses leading very narrow niches, with first-generation owners ageing and no successor in place. That is exactly the kind of business Lifco or Judges hunts.

But there are two large cultural barriers.

The first is decentralisation. The instinct of most Vietnamese owners is to centralise: pull everything to one point, decide everything themselves, trust nobody. The serial acquirer model requires the opposite: once bought, let go, let the existing management keep running it and retain only capital allocation at the level above. This is discipline, not laziness. And the B&B Tools story shows that even the Swedes, masters of the model, can slip off it.

The second is price discipline. In euphoric markets, forcing yourself to buy only at six to seven times earnings means sitting still for a long while, watching others pay more and still not moving. Most investors cannot bear that boredom, and that is why value investing still works in Vietnam while very few people actually manage it.

Vietnam has groups that do a lot of M&A, but mostly in the empire-building style: rolling up an industry, integrating vertically, making big bets, closer to B&B Tools in its lost years than to Lifco. A true Swedish-style serial acquirer, patiently buying small and letting go, has barely appeared. That gap is both a pity and an opportunity.

The QuietVC lesson

Three things to take away, not as a sermon but to consider together.

How you allocate capital matters more than which industry you earned it in. None of the companies above has a magical product. They simply keep putting money in the right place, and let time compound it.

Decentralisation is a form of discipline, not slackness. The hardest part is not buying good businesses but restraining the instinct to interfere, to centralise, to build an empire. The person willing to step aside is the one who lets the machine run.

And finally, the largest advantage is not IQ or information, but the ability to do one correct, boring thing over and over for decades without giving up. Seven and a half thousand times does not come from a breakthrough. It comes from fifty years of not changing.

Silent discipline. Compound value.