Last week, Röko, the Swedish acquirer led by the former CEO of Lifco, raised over ~$500m USD in one of Nordic’s largest IPO in years. As we’ve landed in Stockholm for the Redeye serial acquirer conference, we’ve rounded up our work over the last few years on Röko and its competitors. 

  1. Röko: Building a Leading Serial Acquirer (Apr 21, 2023); free interview w/ Frederik Karlsson comparing Lifco and Röko and sector-agnostic vs sector-focused acquirers. 
  2. Röko M&A Strategy, Transaction Structure, & Returns (Apr 3, 2023); free interview/ Current Deputy CEO and CFO of Röko on the company’s M&A strategy, put-call structures, and managing minority interests.
  3. Röko: Sector-Agnostic vs Sector Focused Acquirers (Apr 27, 2023); a comparison of sector-agnostic acquirers like Röko and sector-focused acquirers like Constellation Software, Danaher, Diploma, etc.
  4. Bergman & Beving: The Capital Allocation Model (Feb 28, 2025); recent free interview with current CEO of B&B on its Focus Model for capital allocation and how it incentivises divisional and subsidiary heads to align with parent capital allocation policies.
  5. Bergman & Beving: Lagercrantz 2.0? (May 24, 2023); analysis of B&B's existing portfolio, new companies acquired, and impact on ROIIC.
  6. Lifco vs Halma: M&A Team Structure & Incentives (Jul 30, 2024); walk through how Lifco and Halma structure its M&A team and incentives
  7. Lifco vs Halma: Org Structure & Opco Incentives (Jun 13, 2024); comparison of Lifco and Halma's org structure and how this informs the overall M&A philosophy and strategy.
  8. Bergman & Beving, Lagercrantz, Nordic B2B Distribution & M&A (Jan 31, 2023); history of B&B, the underlying quality of its historical B2B distribution assets, and how the company has spun out Lagercrantz, Addtech, Addlife, and Momentum.
  9. Industrial Holdcos: Danaher, Lifco, Perimeter, Diploma, Halma, B&B, Lagercrantz, Addtech, Judges (Nov 19, 2024); a roundup of all our research on industrial acquirers.
  10. M&A Accounting: Constellation Software, Vitec, Lifco, Lagercrantz, & Teqnion (Mar 20, 2024); a comparison of how different companies run PPA and the impact on P&L and cash flow statement
  11. Halma, Judges Scientific, SDI, & Scaling Niche Manufacturing Serial Acquirers (Oct 17, 2022); exploration of the challenges scaling niche, manufacturing acquirers compared to VMS
  12. Bergman & Beving: The Original Serial Acquirer (Jan 21, 2023); free interview w/ Current CEO of Bergman & Beving on how B&B compares to Lagercrantz, proprietary IP, and scaling M&A
  13. M&A and Purchase Price Accounting (Jul 22, 2024); free IP Fieldwork podcast on PPA and impact on acquirer financials
  14. IP Fieldwork Podcast: Lifco vs Halma, M&A Team Structure & Incentives (Jan 23, 2025); free podcast sharing a glimpse into how we sourced Lifco and Halma executives and produced research comparing their M&A teams
  15. Bergman & Beving (May 5, 2023); free podcast sharing insights from our original work on B&B and comparing the company to Lagercrantz in the 2000s
  16. Serial Acquirers (Jun 8, 2023); free podcast sharing our learnings from last year's Redeye conference

Röko is the largest Nordic IPO in the last three years and likely the fastest to reach ~$600m in revenue before listing. The company follows a similar investment criteria as most acquirers: it looks for profitable, family or founder-owned, with high ROIC and low capex requirements and acquired at multiples of 6-8x EBIT. 

Röko M&A criteria
Röko M&A criteria

But one of the major differences of Röko relative to competitors is how rigorously sector-agnostic Röko is. Sector-agnosticism is a feature, not a bug. This continues to pique our interest. The company owns 19 B2B and 9 B2C subsidiaries; it owns everything from Beth’s Beauty, a Norwegian beauty retailer, to a Swedish independent craft brewer, to more traditional floor maintenance product manufacturers and distribution businesses. 

Röko portfolio
Röko portfolio

The subsidiaries have a range of organic growth metrics, skewing towards lower growth: 

Röko organic growth distribution
Röko organic growth distribution

But organic growth isn’t too much of a problem if you’re sector agnostic; there are ‘always good companies to buy’:

It is good enough for us if organic growth is 1%... Even Constellation Software doesn't have high organic growth. It is better to have secure cash flow than high growth, that way you can buy new businesses…there are always available businesses when you are sector agnostic. - Founder and CEO of Röko and Former CEO at Lifco

This approach is very different to acquirers like CSU, TDG, or Halma. The founder of Halma would see Röko’s strategy as a major risk:

the risk in acquisitions can be hugely reduced if you are already highly expert in the field. In Halma it has always been our policy to operate at this end of the spectrum where the risk is least. That is to say where we are already expert in the business which we are buying. If you buy a business which is a replica of one you already own and manage successfully, then you are in a good position to check whether or not you have a good deal. The opposite is also true. The less knowledge you have of the target company's market or product area, the higher your risk. By definition, therefore, the highest risk acquisitions are those which Iead to diversification. - David Barber, Founder of Halma PLC, 1997

Röko’s rigorous sector agnosticism opens its opportunity set, extends its runway, but arguably increases its operational risk. The company uses 5-10 year put-calls to acquire companies. The put-calls currently represent over 25% of EBITA. The question is what happens when these options expire? 

How many of the founders leave?   

How can Röko organise succession at each subsidiary?

Does HQ have the operational know-how to pick talent and / or step in if necessary? 

Röko is very different to Lifco in that it has significant B2C exposure; although Lifco is diversified, it’s focused on B2B industrial companies. This builds internal muscle around running niche manufacturing and distribution assets. Röko needs talent across many different types of companies. 

One argument is that this doesn’t matter as such a diversified business model can take 1-2 mistakes: 

The beauty of this business model is that you invest in many companies in different industries, so it doesn't matter if you make a mistake in one company. Lifco and Indutrade are two of the oldest in the business. I discussed this with Alvesson who is more experienced in the business than I am, and he makes mistakes once every 20, but it doesn't matter. I cannot think of a company where we had to close or inject cash. The mistake you can make is buying a company for 20% more and it goes down 10%, but it still contributes cash and you end up with a slightly lower return on investment. - Founder and CEO of Röko and Former CEO at Lifco

Another argument may be that if you pick the best companies, they run themselves. This is also true. Either way, Röko is, or will soon need to become, a talent succession machine as well as an acquisition machine. This is a very different to build than deploying capital. It will be fascinating to watch how Röko evolves as the put-calls expire over the next 3-5 years.