Most business owners who think about scaling through acquisition follow the same mental sequence. Buy a business. Bolt on a few more. Build a group. And then, eventually, maybe, take it to market.
It feels logical. Prove the model privately, then go public once there's something substantial to show. But it's not how the most successful serial acquirers in the world actually built their wealth. They did it the other way round.
The Arbitrage Nobody Talks About
Halma, the UK-listed group of niche industrial and safety technology businesses, has delivered 23 consecutive years of profit growth. Its method has stayed consistent for decades: acquire well-run, profitable niche businesses at roughly 5 to 8 times earnings, and let them compound inside a listed structure that the market itself currently values in the low-to-mid 20s times earnings.
Judges Scientific and SDI Group run smaller versions of the same playbook, both buying niche scientific instrument businesses in a similar multiple range.
That gap — buying at single-digit multiples and being valued in the 20s — is not an accident or a fluke of one good year. It is the structural mechanism. Every acquisition completed inside a listed vehicle creates value the moment the deal closes, because the market immediately re-rates the acquired earnings at the group's own, far higher multiple.
Crucially, that arbitrage does not exist for a private company. A private business buying another private business at 6 times earnings has simply bought 6 times earnings. There is no market re-rating, because there is no public market pricing the group. The uplift only appears once a business is listed.
Listing as Currency, Not Just Capital
There's a second mechanism worth understanding. A listed company doesn't only have cash to acquire with. It has shares.
Once a business is public, its shares become a currency: usable to fund acquisitions without depleting cash reserves, usable as collateral for further borrowing, and usable to align and retain the management teams of businesses being acquired. This is part of how figures like Henry Singleton built Teledyne into a conglomerate spanning roughly 130 acquisitions, and how Warren Buffett used Berkshire Hathaway's public status and balance sheet strength as the engine for decades of acquisition-led growth. Constellation Software offers a more recent illustration of what disciplined, listed acquisition can compound into over time, having built exceptional shareholder returns entirely through acquiring and holding niche software businesses.
A Third Lever: Debt on Public Terms
Shares aren't the only tool a listed company gains access to. Public status also opens the door to bond issuance — raising debt directly from institutional and retail investors rather than relying solely on bank lending. For a group with a credible acquisition track record, bonds can fund further acquisitions without diluting existing shareholders, spreading the cost of growth over time rather than paying for it entirely in cash or shares up front. It's a lever private companies rarely have access to at meaningful scale, and it's something we can structure alongside a listing for the right business.
Why Sequence Matters
This is where most owners get the order wrong. The instinct is: get big first, list later, treat listing as the finish line. But if listing is what unlocks the arbitrage, the share currency, and the debt access, then delaying it delays the entire engine.
A company already generating meaningful revenue that lists before building out its group gains three things simultaneously that a private company building the same group does not: a market valuation that immediately re-rates every acquisition it completes, currency (shares and debt) to fund the next deal, and access to capital markets that private growth simply cannot match.
The listing, in other words, is not the reward for building the group. It is the mechanism that makes building the group considerably faster and more valuable.
The Question Worth Asking
If you already own a business at meaningful scale, the question is not whether you could grow it further through acquisition. Most owners already know that answer is yes.
The real question is whether growing it as a private company — one deal at a time, funded by your own cash and borrowing — is the fastest and most valuable way to do it, or whether listing first and building the group on the other side of that decision would get you there faster, with more currency to do it, and a market consistently re-rating every deal you complete.
The listing isn't the exit. It's the starting gun.
Rob Richmond works with business owners across the UK on acquisition strategy, group building, and direct listing as a growth platform. He is the author of The Acquisition Playbook Series and mentors a small number of serious acquirers each year.