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Lifco AB: The Swedish Compounding Machine
I. Introduction: A Dental Supply Company Becomes an Industrial Empire
The tiny headquarters sits in Enköping, a quiet Swedish town about an hour west of Stockholm. When investor Chris Mayer visited in 2022, he was greeted by Per Waldemarson, the CEO, who was the only person there at the time. The office was in a nice building, but was quite modest and small. Most people are out in the field and HQ is tiny for an $8 billion company.
This is Lifco—a company that has, without fanfare, become one of Europe's most admired industrial compounders. At the end of 2024, the Lifco Group consisted of 257 operating companies in 34 countries. In 2024, Lifco reported an EBITA margin of 22.6 per cent on net sales of SEK 26.1 billion. The numbers alone are impressive. But the trajectory is staggering.
Since November 21, 2014, Lifco AB's market cap has increased from SEK 11.17 billion to SEK 164.52 billion, an increase of 1,372%. For context, that means if you'd invested SEK 10,000 at the IPO, you'd have nearly SEK 150,000 today. That's not a tech moonshot or a pandemic play—it's a collection of dental suppliers, demolition robot manufacturers, and industrial niche specialists.
How did a Swedish dental supply company become one of Europe's most admired industrial compounders? The answer lies in a philosophy so simple it almost seems naive: buy great niche businesses, pay fair prices, leave management alone, and never sell. Lifco's business concept is to acquire and develop market-leading sustainable, niche businesses with the potential to deliver sustainable earnings growth and robust cash flows. The company is guided by a clear philosophy implying that it has a long-term view on its holdings, a focus on profitability and a strongly decentralised organisation.
But beneath that simplicity lies a sophisticated capital allocation machine, one that has outperformed through recessions, pandemics, and market cycles. One that consistently bought companies at 5-8x EBITA while its own stock traded at multiples far higher. One where the acquired companies' managers often became more profitable owners than they ever were as independent entrepreneurs.
The story of Lifco is, in many ways, the story of modern Swedish capitalism. In Sweden, there are a number of what investors call "serial acquirers." Companies like Addtech, Indutrade, Lagercrantz and more—but Lifco stands apart. It's the one that the other serial acquirers study. It's the one whose former CEO went on to found his own version, raising hundreds of millions in weeks.
This is the story of how a post-war healthcare procurement entity transformed into a perpetual ownership machine, guided by a Swedish baron who understood that the best way to build wealth was to never stop compounding it.
II. Origins: From County Councils to Medical Supplies (1946–1993)
To understand Lifco, you have to understand Sweden in 1946. The war was over. The welfare state was rising. And the Swedish county councils—the regional governments responsible for healthcare—needed a way to procure medical equipment efficiently.
In 1946, the Swedish county councils founded a central purchasing entity for medical equipment and services. This was not a company in any entrepreneurial sense. It was a bureaucratic solution to a bureaucratic problem: centralized procurement for a centralized healthcare system.
For decades, this entity existed in relative obscurity. It had no CEO making headlines, no innovative products, no growth strategy. It was, essentially, a distribution middleman—buying medical supplies in bulk and distributing them to hospitals.
In the 1990s, the company went through a number of changes in ownership as well as name. In 1993, the company was acquired by its management team and the venture capital company Procuritas.
This management buyout was significant for a reason that wouldn't become apparent for years: it established that this entity could be owned privately, managed for profit, and operated independently of government oversight. The MBO marked the transition from public utility to private enterprise.
But the real history of Lifco—the company that exists today—was about to begin. Because in those same years, a Swedish businessman named Carl Bennet was building something remarkable at another medical equipment company. And he was about to bring his philosophy to Lifco.
III. The Carl Bennet Connection: Enter the Architect (1989–2000)
Every great compounder has an architect—someone who designs the system, selects the raw materials, and establishes the principles that will guide the edifice for decades. For Lifco, that architect was Carl Bennet.
Carl Reinhold Adolf Bennet (born 19 August 1951) is a Swedish billionaire businessman. But that biography undersells the man. He hails from a prominent Swedish noble family, the Bennet family, and holds the title of baron. In a country where nobility was officially abolished in the early 20th century, the Bennet family maintained its standing through business acumen rather than hereditary privilege.
Bennet obtained an MBA from the University of Gothenburg in 1976. In his early career, Bennet worked at Kockums in Malmö, thereafter at Electrolux in Alingsås between 1980 and 1988. During his time there, he met Rune Andersson, who would later become his business partner.
The Electrolux years were formative. Bennet learned how large Swedish industrials operated—their strengths in engineering, their weaknesses in bureaucracy. He also found a kindred spirit in Andersson, who shared his conviction that properly managed businesses could generate returns far beyond what most corporate executives achieved.
In 1989, the duo departed the company and acquired Getinge Group, a struggling medical equipment subsidiary of Electrolux. Over the next two years, they managed to turn its fortunes around. In 1993, they listed Getinge on the Stockholm Stock Exchange, eventually selling off more than half of their stake, earning around $60 million, which they reinvested into other ventures.
In 1989, Carl Bennet founded the holding company Carl Bennet AB. Carl Bennet, together with Rune Andersson, acquired the company Getinge from Electrolux for 320 MSEK. Carl took over as CEO and Rune as the chairman of the board. Within six months, the company had turned a profit.
Six months. That timeline reveals something essential about Bennet's approach: he was not a slow-motion operator or a long-term turnaround specialist. He knew what levers to pull and pulled them decisively. The Getinge success established his credibility as a manager and, more importantly, gave him the capital to build something bigger.
The Swedish Decentralization Philosophy
To understand what Bennet would eventually build at Lifco, you have to understand the intellectual tradition he was drawing from. Swedish business had developed a distinctive approach to organizational design—one that stood in stark contrast to the centralized command-and-control models dominant in American and much of European industry.
Jan Wallander, who steered Handelsbanken through the 1970s and 1980s and wrote the book "Decentralization - Why and How to Make it Work", pioneered the Swedish model of decentralization. He advocated for lean headquarters and pushing decision-making authority down to the front lines, close to the customer. Percy Barnevik, at the helm of ABB during the late 1980s and 1990s, was the first to earnestly adopt this blueprint, fracturing ABB into 65 business units, each led by managers with individual P/L responsibility. This ignited the Swedish ethos of genuine delegation.
Wallander's book describes a way of leading and organising a company which is radically different from that practised by most companies. The starting point is that there are certain timeless human demands that should be met by any organisation. This leads to organisations that are radically decentralised. The fundamental principle of decentralisation was put to the test when Handelsbanken was completely reorganised. The head office was cut down by a third and all budgeting and long term planning was abandoned.
This was heresy in most of the business world. Cut headquarters by a third? Abandon budgeting? Yet Handelsbanken consistently outperformed its Swedish rivals for decades.
Under his ownership, Carl Bennet craved the same for Lifco, transforming it into a capital allocation machine.
Lifco Enters the Bennet Orbit
From 1995 to 1998, the company was a division of the publicly traded Getinge Group and was spun off to shareholders as part of a restructuring in 1998. Carl Bennet, the majority owner of Getinge Group and thus also of Lifco AB, decided in 2000 that Lifco needed to be restructured as a private company and made it a fully-owned subsidiary of Carl Bennet AB.
The mechanics here matter. Carl Bennet AB, majority owner of Getinge Group, became majority owner of Lifco in conjunction with the listing in 1998. When Getinge spun off Lifco, the shares went to Getinge's shareholders—and the largest shareholder was Carl Bennet AB. Through this corporate restructuring, Bennet ended up with a controlling stake in both the parent (which continued as Getinge) and the spin-off (Lifco).
Bennet split with Andersson in 1997 and became lone controlling shareholder in Getinge and dental-equipment maker Lifco AB, which has evolved into a conglomerate of small and medium-sized entities.
The partnership that built Getinge was over. But Bennet now had two platforms—Getinge, focused on medical technology for hospitals, and Lifco, a dental supply company. The question was what to do with each of them.
IV. The Crucial Pivot: Going Private & The 2001 Divestiture
In the year 2000, Carl Bennet made a decision that would set Lifco on its transformative path. Carl Bennet AB determined that Lifco needed restructuring and would perform better as a private company. Consequently, Lifco became a wholly-owned subsidiary of Carl Bennet AB.
Why take a company private? The conventional wisdom in finance holds that public markets provide access to capital, liquidity for shareholders, and discipline through transparency. But Bennet understood something different: public markets also bring short-term pressures, activist investors, and the tyranny of quarterly expectations.
In 2000, Carl Bennet AB concluded that Lifco was in need of restructuring and would develop more favorably as a non-listed company.
The restructuring was brutal in its simplicity. In 2001, Lifco shifted its focus to the distribution of dental products, leading to the divestiture of its health and self-care operations, which accounted for 40% of its total sales.
Think about that: Lifco voluntarily cut itself nearly in half. In an era when every CEO talked about growth, synergies, and scale, Bennet and his team did the opposite. They looked at their portfolio, identified what generated the best returns, and jettisoned everything else.
Lifco divested 40% of its sales (health and self-care) to focus on its dental products distribution.
The logic was ruthlessly clear. Dental distribution had higher margins, better cash conversion, and more predictable demand. Dentistry isn't cyclical in the way industrial products are—people need their teeth fixed regardless of GDP growth. And the dental supply chain offered something even more valuable: deep, sticky relationships with dentists who didn't want to switch suppliers.
For Bennet, this wasn't about shrinking. It was about concentrating. The dental business would become the foundation—the reliable cash-generating engine that could fund something much more ambitious.
The Private Years: Building Without Observers
From 2001 to 2014, Lifco operated in relative obscurity. As a wholly-owned subsidiary of Carl Bennet AB, it had no external shareholders to satisfy, no quarterly calls to conduct, no equity research analysts asking questions. This freedom allowed management to do something increasingly rare in modern capitalism: think in decades.
The private years weren't glamorous. But they established the disciplines that would later make Lifco exceptional. Management learned to optimize operations without the distraction of share price movements. They developed acquisition criteria without pressure to "do deals" to justify growth targets. They built relationships with potential acquisition targets over years, not months.
Most importantly, they proved to themselves—and to Bennet—that the dental business could generate the cash flows needed to fund expansion into new territories.
V. The Birth of a Serial Acquirer: Sorb Industri Acquisition (2006)
The year 2006 marked the transformation of Lifco from a focused dental distributor into something much more ambitious.
Sixty years after its foundation, in 2006, Lifco acquired its sister company Sorb Industri AB, a diversified industrial company also owned by Carl Bennet AB. That became the start of a successful business expansion.
In 2006, Lifco then went ahead with the acquisition of its sister company Sorb Industri AB, a diversified industrial company also owned by Carl Bennet AB. A new industrial serial acquirer was born. This somewhat resembles Warren Buffett's Berkshire Hathaway, which started as a textile manufacturer and eventually transformed into a massive conglomerate.
The Berkshire comparison is apt. Like Buffett using the declining textile mill as a cash source for insurance acquisitions, Bennet used the steady dental distribution business as the foundation for industrial expansion. The dental business would never stop throwing off cash. The question was what to do with it.
Sorb Industri brought something crucial to Lifco: proof of concept. It demonstrated that the decentralized operating model that worked in dental could work in industrials. Different products, different customers, different competitive dynamics—same management philosophy.
Sales grew by 12.6% and EBITA by 16.8% year 2006-2014.
Fredrik Karlsson: The Capital Allocator
The Sorb acquisition coincided with the ascension of a CEO who would define Lifco for the next thirteen years.
Fredrik Karlsson, a spry 30-year-old at the time, ascended to CEO of Lifco amid the spin-off from Getinge in 1998. Now under Bennet's ownership, Karlsson became his apprentice.
Before founding Röko, Fredrik Karlsson was the CEO of Lifco from 1998 to 2019. During his 20-year tenure, he increased shareholder value by a remarkable 100x.
One hundred times. That's not a typo. The man who took over a dental distribution company as a 30-year-old multiplied its value by 100 before leaving two decades later. And he did it not through a single brilliant insight or a transformational acquisition, but through the relentless, unglamorous work of buying good businesses at good prices, year after year.
When asked what Carl Bennet saw in him, Karlsson replied: "Carl Bennet saw somebody who was result-focused, and that was what he wanted. I still remember how I presented my case to him: 'I started at this German firm Mercatura, and the numbers looked like this, and when I left, they looked like this.' I just showed him the financials. I believe I was the only one who showed it so clearly. And Carl is also extremely results-focused. Results are the only thing that matters. We found each other in that."
The relationship between Bennet and Karlsson exemplified the Lifco model. From Carl Bennet, Karlsson learned the power of simplicity: "I was too academic when I was young. And when you are over-educated, you are inclined to do everything yourself because you think you are that good. But he emphasised that one should not go in and interfere after you have given people responsibility."
This wasn't just management advice—it was the philosophical foundation of Lifco's operating model. Don't interfere. Trust the people running the businesses. Focus on capital allocation, not operational meddling.
VI. The Acquisition Machine: Philosophy & Execution (2006–2014)
With Sorb integrated and Karlsson at the helm, Lifco began building the acquisition capabilities that would make it legendary among European industrials investors.
Strong profit and cash performance, and redeploying cash back into M&A. Since 2006, Lifco has completed or announced 131 acquisitions, or about 8 annually.
Eight acquisitions per year, consistently, for nearly two decades. This pace required something rare: institutionalized M&A capabilities that could generate, evaluate, and execute deals without bottlenecking at the CEO level.
The Acquisition Criteria
Lifco's criteria evolved into a checklist that became famous in Swedish investment circles:
Core Criteria: 1. Continuous profit growth (assessed on the last 10 historical years) 2. EBITA margin above 10% 3. Management in place and willing to stay in place after the acquisition is completed.
Note what's absent: revenue growth targets, market share goals, or "strategic fit" with existing businesses. Lifco didn't care if a potential acquisition made synergistic sense. They cared whether it made money consistently and had good management.
Additional criteria included being a market leader in its niche and having an asset-light model with capex below 5% of sales.
Price Discipline: The Opportunity Cost Framework
The most distinctive element of Lifco's approach was its price discipline. In a world where acquirers routinely paid 12-15x EBITDA for quality businesses, Lifco refused to participate.
Opportunity cost drove every decision. For each deal Lifco closed, it would think about what deal would slide along the desk the following week in another vertical and wouldn't give a hoot about its market price. If a broker quoted an 11x EBITA offer, Lifco still countered at 7x because that was the opportunity cost. Year after year, it bought only companies meeting its bid. Like Berkshire, Lifco didn't negotiate. Multiples paid stayed firmly in the 5-8x range.
This is consistent with analysis compiled by Redeye: "Multiples paid have stayed relatively constant in the last 20 years…mostly ranging 5-8X [of EBITA] based on initial purchase consideration".
This discipline seems almost impossible in competitive M&A markets. How can any buyer consistently pay below-market prices? The answer lies in understanding Lifco's target sellers.
Why Founders Sell to Lifco
Lifco's value proposition to sellers was not the highest price—it was permanence, autonomy, and succession.
Consider a typical Lifco target: a family-owned industrial company with €10-20 million in revenue, solid margins, and an owner-operator in their late 50s. They've built something successful, but they face a problem. Their children don't want to run the business. Private equity will pay more but will sell again in five years. Strategic acquirers will absorb them into a bureaucratic conglomerate.
Lifco offered something different: keep running your business, keep your management team, keep your culture—but transfer the risk, access growth capital, and ensure the company survives beyond your career.
As Karlsson noted: "We estimate that 15,000 private SMEs are sold annually in Europe, of which 1,500 are potential targets for Röko"—and by extension, for serial acquirers like Lifco.
The Lean HQ
When Chris Mayer visited Lifco HQ, he was greeted by Per Waldemarson, the CEO, who was the only person there at the time. The office was in a nice building, but was quite modest and small. Most people are out in the field and HQ is tiny for an $8 billion company.
This wasn't cost-cutting for appearance's sake. It reflected a fundamental belief: if you're genuinely decentralized, you don't need a large headquarters. The operating companies make their own decisions. Headquarters exists for capital allocation, not operational oversight.
As Lifco stated: "We are strongly decentralised, and the companies enjoy a high degree of independence. Our goal is for decisions to be made by the local management teams in the companies where the business is conducted."
VII. IPO 2.0: Return to Public Markets (November 2014)
After fourteen years as a private company, Lifco returned to public markets on November 21, 2014.
Carl Bennet AB sold 49.9% of the shares in Lifco in a public offering. Lifco is listed on Nasdaq Stockholm main list November 21, 2014.
The decision to re-list might seem to contradict the logic of taking the company private in 2000. But circumstances had changed. Lifco had grown dramatically. It had proven its model. And Bennet faced succession considerations—both for his own family and for the capital structure of Carl Bennet AB.
Carl Bennet commented at the time: "Fredrik Karlsson has, together with the management team, Lifco's subsidiary heads and Lifco's employees, developed a strong group of leading industry and trade operations. We believe an IPO will benefit Lifco and at the same time, a transparent structure with three listed holdings in Lifco, Getinge and Elanders will simplify the corporate governance in CBAB, for both me and the next generation."
The offering price was SEK 93 per share (SEK 18.6 on a split-adjusted basis), corresponding to a market value of approximately SEK 8.4 billion.
When asked about changes made in connection with the 2014 IPO, Karlsson explained: "Growth was not considered as important when we were private. It was enough to grow a little each year with high profitability. But then I understood that I needed more growth. So we recruited a dedicated M&A professional. My role changed from being a turnaround manager in 1998 to becoming an acquirer and CEO appointer. That was important because you win the Champions League by picking the best players."
Post-IPO Acceleration
The public markets provided two things Lifco hadn't needed but could now use: external benchmarking and access to capital for larger deals.
Afterward, Lifco grew EBITA by 16.8% annually until 2014, when Carl Bennet sold 49.9% in a public offering to list Lifco a second time. Since then, Lifco has grown its FCF per share by 22.8% CAGR, an eightfold increase.
The acceleration after the IPO wasn't about changed strategy—it was about expanded opportunity. With a public currency and demonstrated track record, Lifco could pursue larger deals and attract different types of sellers.
From 2014, when Bennet took Lifco public for the second time, to 2019, the stock delivered a 32% compounded annual return including dividends. And it has continued under Waldemarson, delivering a full compounded total shareholder return from 2014 through today at 28% annualized.
VIII. The Three Kingdoms: Business Segments Deep Dive
Today's Lifco operates across three distinct business areas, each with its own characteristics and role in the portfolio.
Dental (~25% of sales, ~21% of EBITA)
Dental includes the manufacturing and distribution of consumables, equipment and services in the European and American dental industry. This segment has the lowest EBITA margin at 20.5%, trailing twelve months, but is the most stable segment and not as vulnerable as the industrial segments to the cycle. It accounts for 25% of sales and 21% of EBITA. Since 2006, EBITA has grown by 14.9%, and the EBITA margin has improved from the mid-teens to 20%.
The Dental segment is Lifco's historical foundation and its ballast. The recession of 2008-2009 hurt the more cyclical subsidiaries in Demolition & Tools, but fortunately there was still the steady-as-she-goes Dental business.
Dentistry is remarkably stable. People need dental care regardless of economic conditions. Consumables are recurring purchases. And the distribution relationships are sticky—dentists don't switch suppliers casually when their existing supplier knows their preferences and provides reliable service.
Demolition & Tools (~25% of sales, higher margins)
Lifco is the world's leading supplier of demolition robots and crane attachments and a leading global supplier of excavator attachments and forest machines. It has customers in heavy machine manufacturing and the construction, forestry, nuclear, cement and process industries worldwide.
This segment contains Lifco's crown jewel: Brokk, the world's leading manufacturer of demolition robots.
Brokk is the world's leading manufacturer of advanced remote-controlled demolition machines, popularly called "demolition robots."
Brokk machines helped to clear Ground Zero after 9/11. They assisted in containing the nuclear disaster at Fukushima NPP after the devastating tsunami.
The Brokk story illustrates what Lifco looks for in an acquisition. The company's origins date to 1976—the same year Apple Computer was founded and Viking 2 landed on Mars. Visionaries and entrepreneurs developed a remote-controlled robot that would forever change the demolition industry.
Lifco's Demolition & Tools business area includes Brokk, a world-leading manufacturer of demolition robots, and Kinshofer, a leading supplier of crane and excavator attachments.
This segment operates at higher margins than Dental—Demolition & Tools sells demolition robots, crane and excavator attachments and forest machines to industrial customers at 25.3% EBITA margins.
The tradeoff is cyclicality. Construction spending fluctuates with economic conditions, and capital equipment purchases can be deferred. But Lifco's combination of market leadership and diverse end markets provides some buffer.
Systems Solutions (~50% of sales, fastest growing)
Early on, Karlsson realized it was probably a bad idea to stick to a smaller vertical like dental distribution since the roll-up path would eventually turn expensive and yield middling results. So Karlsson, flanked by his right-hand man Per Waldemarson, began buying industrials too. Today, Lifco's 260+ company portfolio splits into sector-agnostic B2B businesses, encompassing everything from excavator attachments, specialist orthodontist supplies, ship compressors, electrical equipment, coffee machines, auto trailers, and beyond. Dental distribution has dwindled to under 25% of the mix. Karlsson's move, multiplying the M&A runway many times over through diversified verticals, was a triumph.
Systems Solutions is Lifco's catch-all bucket—and it's where most of the growth has occurred. The segment includes contract manufacturing, environmental technology, infrastructure products, and transportation solutions.
The "systems solutions" label is, candidly, a placeholder. These businesses don't share obvious operational synergies. What they share is Lifco's investment criteria: strong market positions, good margins, and management willing to stay.
This sector-agnostic approach dramatically expands Lifco's addressable market. When you're willing to buy any profitable niche business with good management, your opportunity set is effectively unlimited.
IX. Leadership Transition & Culture Continuity (2019–Present)
In early 2019, a pay package dispute ended the two-decade partnership between Fredrik Karlsson and Carl Bennet.
Lifco's Board of Directors took the decision to terminate Fredrik Karlsson's position as CEO since the Board of Directors and Fredrik Karlsson had not succeeded in reaching an agreement about his future remuneration. Per Waldemarson, currently vice CEO, took on the position.
By early 2019, a pay package dispute ended the partnership between Karlsson and Bennet. Karlsson's right-hand man, Waldemarson, assumed the helm at Lifco. After a two-decade run, Karlsson was now a free and wealthy man. He wasn't unemployed for long, though. It should be no surprise that Karlsson went on to set up his own acquisition vehicle, partnering with Tomas Billing, then-CEO of Nordstjernan, a foundation-owned investment firm.
Per Waldemarson's Continuation
The leadership transition tested a central question: Was Lifco's success dependent on Fredrik Karlsson's unique genius, or was it embedded in repeatable systems and culture?
Per Waldemarson is President, Chief Executive Officer & Director at Lifco AB. In the past Mr. Waldemarson held the position of Chief Executive Officer of Brokk AB.
Waldemarson wasn't an outsider parachuted in to "professionalize" the company. He had been Karlsson's deputy, running the Dental division, and before that served as CEO of Brokk—one of Lifco's most important subsidiaries. He knew the culture, the acquisition process, and the operating philosophy.
Exhibit III highlights Lifco's total shareholder return from 1998 to 2019, providing context around its long-term track record. Since 2019, Lifco's stock has increased by an additional 176%, excluding dividends.
The stock's performance since Waldemarson took over answers the question decisively: the system works regardless of who operates it.
As Karlsson himself acknowledged: "I stopped working at Lifco three years ago, but otherwise, it is the same employee team line-up today, and they have made an excellent performance."
Röko: The Model's Replication
If there was any remaining doubt about the transferability of Lifco's approach, Karlsson's subsequent venture eliminated it.
Röko was founded by Tomas Billing and Fredrik Karlsson in 2019. The two co-founders remain chairman and CEO of Röko today.
Armed with a vision, reputation, and thick rolodex, the duo raised a full SEK 2.7 billion in just three weeks, overshooting their initial SEK 1 billion expectation. In its debut year, Röko sealed six acquisitions.
Karlsson described Röko as "a refinement of Lifco's business concept, another version of executing something similar. The acquisition strategy and criteria have been developed jointly between Tomas, Johan Bladh, Anders Nordby, and me. We have a more structured mindset than Lifco, where it was not as pronounced. The acquisition model is based on only buying smaller family businesses that are asset-light with strong market positions, and always keeping the management as shareholders."
That Karlsson could replicate his success—and that Lifco continued succeeding without him—validates the core insight: serial acquisition is a learnable discipline, not a mysterious art.
X. Why Sweden? The Ecosystem of Serial Acquirers
One question I liked to ask is "Why Sweden?" Why are there so many of these structures in Sweden? You don't find them in other European markets.
Sweden produces serial acquirers the way Silicon Valley produces software startups. Companies like Lifco, Teqnion, Addtech, Indutrade, Lagercrantz and more have made Stockholm an unlikely global center for this particular form of capitalism.
Swedish society works with a high level of trust. So the decentralized model more naturally took root here. Add to this: it is easy to acquire companies in Sweden. You can do a deal with a 15-page document, whereas, say, in the UK you have a hundred pages and lots of lawyers involved. The other popular answer is to look at the success of Bergman and Breving, which spawned Addtech and Lagercrantz. Their success led others to copy the model—and then you have what I call the Silicon Valley effect, where serial acquirers tend to start in Stockholm because others are already there (and so is the talent pool, etc.).
The Bergman & Beving Lineage
Bergman & Beving's totemic image is well-deserved. Established in 1906, over the years B&B has spun off Lagercrantz, Addtech, and Alligo (then Momentum Group). Further, Addtech later spun off AddLife, and Alligo/Momentum Group separated into two listed companies.
This genealogy matters because it demonstrates replicability. The model didn't work just at one company—it propagated across spin-offs, each of which built its own track record of compounding.
The Target-Rich Environment
Europe faces market fragmentation, limited access to venture capital, and regulatory barriers—challenges for startups, but opportunities for acquirers. The fragmentation means thousands of small, profitable businesses that can't easily scale across borders on their own.
European SME markets offer vast acquisition opportunities. With different languages, regulatory regimes, and business cultures in each country, local champions emerge but rarely grow beyond their home markets. For a well-capitalized acquirer willing to provide permanent ownership, this fragmentation creates perpetual deal flow.
The Trust Factor
Sweden's high-trust business culture enables something essential to the serial acquirer model: light-touch due diligence and handshake deals.
Like students of Constellation Software might have learned, acquiring SMBs takes a lot of time, discipline, and relationship building. The best serial acquirers have often been in talks or had relationships with the seller for years before a deal even is on the table. This is very different than a structured process where brokers and advisors run auctions. This gives experienced serial acquirers two distinct advantages: adverse selection and a deep insight into the people running the business.
When you can close a deal with a 15-page document, your transaction costs drop dramatically. When sellers trust that you'll keep your promises about autonomy, they accept lower prices. When relationships develop over years, you see opportunities before they reach the auction block.
XI. Playbook: Operating Philosophy & Lessons
Decentralization as Competitive Advantage
Serial acquirers are typically decentralized, with the acquired companies enjoying quite a bit of autonomy. The free cash flow of these daughter companies is funneled to the mothership where it is deployed—in new acquisitions, dividends or whatever. Typically, serial acquirers look to hold companies forever.
Lifco's decentralization isn't just philosophical preference—it's structural competitive advantage. Under Johnny Alvarsson at Indutrade, the group grew from some 60 companies to over 200. The acquisition pace was possible by not integrating firms.
When you don't integrate acquisitions, you eliminate the execution risk that destroys value in most M&A. You don't have to merge IT systems, harmonize HR policies, or navigate cultural clashes. The acquired company keeps doing what made it successful. Headquarters just harvests the cash.
The Single KPI: Profit Growth Every Year
Lifco has one clear objective: to improve profits every year (and organically in every subsidiary). It has so far only failed twice, with 2013 showing a negligible decline, also because there were no new acquisitions.
This simplicity is deceptive. Most companies have elaborate balanced scorecards with dozens of metrics. Lifco has one: Did profits grow? Everything else—revenue growth, market share, employee satisfaction—matters only to the extent it drives profit growth.
Coupled with organic growth and operating leverage, total EBITA (excluding acquisition costs) has compounded by 18.3% per annum as per the last twelve months (Q2 2024 data).
Contrast with Failed Serial Acquirers
It's not so easy to build a successful serial acquirer. It's not just buying a bunch of companies and trying to play a financial arbitrage game. Things can go horribly wrong. And a case study on this would be Storskogen, an aggressive gobbler of companies.
Chris Mayer explained: "I don't like the ones that are super aggressive and buying up everything. An example is like Storskogen in Sweden. When it first came out, they were just, I mean, they had bought a ton of companies, I think over a three year period, something like 170 companies. It was a lot. They were very aggressive. They were buying everything and they weren't particularly disciplined about what they were buying or paying all kinds of prices."
Storskogen represents the anti-Lifco: speed over discipline, growth over returns, deal volume over deal quality. The contrast illuminates what makes Lifco work.
XII. Competitive Analysis: Porter's Five Forces & Hamilton Helmer's 7 Powers
Porter's Five Forces Analysis
Threat of New Entrants: LOW The serial acquirer model has high barriers to entry. Building the reputation that attracts quality sellers takes decades. Developing the operational capabilities to manage hundreds of subsidiaries requires organizational learning that can't be purchased. And the best acquisition targets—family businesses seeking permanent homes—prefer proven owners.
Supplier Power: LOW Lifco's subsidiaries generally have diversified supplier bases. More importantly, many are themselves suppliers to their customers, which inverts the typical power dynamic.
Buyer Power: MODERATE Varies by segment. Dental customers are sticky. Industrial customers have more leverage. But niche market leadership provides pricing power across the portfolio.
Threat of Substitutes: LOW Each subsidiary faces its own substitution risks, but portfolio diversification means no single substitution threat endangers the whole. Demolition robots can't be substituted; they enable substitution of human labor.
Competitive Rivalry: MODERATE Competition for acquisitions has intensified as more capital has entered serial acquirer strategies. However, Lifco's reputation, relationships, and patience provide sustainable advantages.
Hamilton Helmer's 7 Powers Framework
Counter-Positioning Lifco's permanent ownership model counter-positions against private equity. PE firms structurally cannot offer what Lifco offers: genuine perpetual ownership. This structural difference, embedded in Lifco's business model, provides advantage PE cannot copy without abandoning their own model.
Scale Economies Limited. Lifco deliberately avoids scale synergies that would require integration.
Switching Costs Strong at the subsidiary level. Dental customers don't switch suppliers casually. Industrial customers depend on long-term relationships.
Network Effects Modest. Lifco's reputation creates a flywheel where satisfied sellers refer other sellers, but this isn't true network effects in the platform sense.
Process Power Perhaps Lifco's strongest power. Two decades of acquisition execution have created institutional knowledge that competitors cannot easily replicate. The ability to evaluate, close, and integrate (or rather, not integrate) acquisitions at consistent quality and pace represents genuine process advantage.
Branding Lifco's brand among potential sellers—as a fair, permanent, autonomy-respecting owner—provides meaningful advantage. This brand took decades to build and cannot be quickly replicated.
Cornered Resource Lifco has access to deal flow that doesn't reach auction. Relationships built over decades surface opportunities before they become competitive processes.
Comparison with Constellation Software
Constellation is unique and the purest version of this model. They've gone from allocating $80 million in 2008 to approximately $1.23 billion last year, at the same economics, which is incredible. They're acquiring 130 companies, up from 20 companies to 130 companies a year.
Constellation Software under Mark Leonard remains the gold standard. Its focus on vertical market software provides more structural advantages than Lifco's sector-agnostic approach. Software has inherently higher switching costs, better recurring revenue, and stronger margin profiles.
But Lifco's sector agnosticism provides its own advantage: unlimited runway. Constellation must find software companies. Lifco can buy anything that fits its criteria.
XIII. Financial Performance & Key Metrics
2024 Results
At year-end 2024, the Lifco Group consisted of 257 operating companies in 34 countries. In 2024, Lifco reported EBITA of SEK 5.9 billion on net sales of SEK 26.1 billion. The EBITA margin was 22.6 per cent.
EBITA increased 4.5 per cent to SEK 5,917 (5,664) million during the year as a result of acquisitions. The EBITA margin declined 0.6 of a percentage point to 22.6 (23.2) per cent due to negative organic growth in Demolition & Tools.
Earnings per share increased 1.0 per cent in 2024 to SEK 7.27 (7.21) and cash flow from operating activities increased 0.6 per cent to SEK 4,485 (4,458) million. During the year, Lifco consolidated 13 acquisitions.
Long-Term Track Record
EBITA growth of 18.5 per cent from 2006–2024. Growth has taken place solely through self-generated capital. During this 18-year period, Lifco consolidated 139 companies with total estimated annual net sales of SEK 16.8 billion at the time of acquisition.
The fact that growth occurred "solely through self-generated capital" deserves emphasis. Lifco has never diluted shareholders to fund acquisitions. Every acquisition came from operating cash flow or debt that could be serviced from operating cash flow. This is the compounding machine in action: profits fund acquisitions that generate more profits that fund more acquisitions.
Balance Sheet Strength
The net debt/equity ratio at 31 December 2024 was 0.6. Net debt/EBITDA was 1.8 (1.7) and interest-bearing net debt/EBITDA was 1.2 (1.1) times at 31 December 2024.
Lifco's target is to maintain interest-bearing net debt in a range of 2–3 times EBITDA. At year-end, interest-bearing net debt stood at 1.1 times EBITDA, which gives ample space to continue to grow through acquisitions.
This conservative leverage provides dry powder for acquisitions and resilience through downturns. When competitors are deleveraging, Lifco can accelerate acquisitions.
XIV. Key KPIs to Monitor
For long-term investors tracking Lifco, three metrics matter most:
1. Annual EBITA Growth
This is Lifco's self-declared primary objective. Lifco has one clear objective: to improve profits every year. Tracking whether they achieve this—and the split between organic and acquired growth—reveals whether the machine is still functioning.
2. EBITA Margin Trend
The EBITA margin declined 0.6 of a percentage point to 22.6 (23.2) per cent. Margin compression can signal integration problems, acquisition quality deterioration, or competitive pressure. Lifco's long-term margin expansion from the mid-teens to above 22% reflects quality improvement in the portfolio. Reversal would be a warning sign.
3. Acquisition Volume vs. Multiple Paid
Lifco's value creation depends on buying companies at attractive multiples. If acquisition multiples rise significantly above the 5-8x historical range, or if acquisition volume drops despite ample capital, the model's sustainability comes into question. Management does not disclose deal-by-deal multiples, but changes in aggregate returns on acquisitions can be inferred from the gap between acquired revenue and EBITA contribution.
XV. Risks & Considerations
Key Person Risk
While the Karlsson-to-Waldemarson transition demonstrated institutional resilience, Carl Bennet remains the controlling shareholder. Carl Bennet was born in 1951. At 74, succession planning at Carl Bennet AB becomes relevant. The dual-class share structure that enables Bennet's control will eventually pass to his heirs, whose commitment to the Lifco model is unknown.
Acquisition Environment
When acquirers purchase outside their circle of competence or pay too much, value destruction follows. While Lifco has maintained discipline historically, competitive pressure for deals has increased as capital floods into serial acquirer strategies. Maintaining price discipline while deploying growing cash flows becomes harder at scale.
Cyclicality in Demolition & Tools
The recession of 2008-2009 hurt the more cyclical subsidiaries in Demolition & Tools. The EBITA margin declined due to negative organic growth in Demolition & Tools. While Dental provides ballast, economic downturns still impact overall results. The 2024 results showed this cyclicality in action.
Currency Exposure
Lifco operates primarily in Europe, with 81% of sales, while NA contributes 10% and Asia & Australia 8%. The Swedish krona's movements relative to the euro, dollar, and other currencies create translation effects that can obscure underlying performance.
Valuation
Lifco earned SEK 5.9bn EBITA in 2024 (22.6% margin), which puts it at 30.9x EV/EBITA (2024). Based on consensus 14-15% expected profit growth in 2025-26, the multiple drops to 26.8x and 23.2x.
Lifco trades at premium multiples relative to its acquisition targets. This arbitrage—buying at 6x, trading at 30x—has driven returns historically but assumes the premium persists. A re-rating to lower multiples would materially impact returns even if operating performance continues.
XVI. Bull Case
Perpetual Compounding Machine
Lifco has demonstrated the ability to compound EBITA at 18%+ annually for nearly two decades. If this continues, the current valuation becomes reasonable despite appearing expensive on traditional metrics. Serial acquirers with proven track records deserve premium multiples because their growth is more predictable than organic growers.
Europe's Fragmented SME Market Provides Decades of Runway
Estimates suggest 15,000 private SMEs are sold annually in Europe, of which 1,500 are potential targets. This target-rich environment won't be exhausted in any foreseeable timeframe. Unlike tech markets that consolidate to a few players, European SME markets remain fragmented indefinitely due to linguistic, regulatory, and cultural barriers.
Decentralization Creates Resilience
With 257 operating companies, no single business failure threatens the whole. Economic downturns impact some segments while others prove resilient. This diversification, combined with disciplined capital allocation, makes Lifco surprisingly defensive for a growth compounder.
Proven Leadership Succession
The Karlsson-to-Waldemarson transition demonstrated that Lifco's success is institutional, not personal. The playbook is documented, the culture is established, and the next generation of management is developing within the organization.
XVII. Bear Case
Valuation Compression Risk
At current levels, Lifco trades at a P/E of 52.7x, above its historical average of 25-30x. Premium multiples assume continued execution. Any stumble—an acquisition that goes wrong, margin compression, or slowing deal flow—could trigger re-rating. At these multiples, execution must be near-perfect.
Acquisition Quality May Decline at Scale
As Lifco deploys larger capital amounts, maintaining historical returns becomes harder. Either multiples paid must rise, deal quality must decline, or growth must slow. This is the fundamental challenge every successful serial acquirer faces.
Competition for Deals Has Intensified
The Swedish serial acquirer model is no longer obscure. Capital has flooded in, bidding up multiples for quality targets. Competitors like Storskogen were buying aggressively, though their struggles demonstrate the importance of discipline. Still, more capital chasing similar deals means lower returns.
Cyclical Exposure in Industrial Segments
Negative organic growth in Demolition & Tools showed cyclical vulnerability. A severe recession could compress margins and earnings significantly, even as Dental provides some buffer.
Controlling Shareholder Transition
Carl Bennet's eventual succession introduces uncertainty. His heirs may not share his commitment to the model, patience with management, or discipline about capital allocation. The dual-class structure that has enabled long-term thinking could become a governance liability under different ownership.
XVIII. Conclusion: The Patient Compounder
In an era of SPAC frenzy, meme stocks, and AI-driven speculation, Lifco represents something almost quaint: patient, disciplined compounding through the unsexy work of buying small businesses and leaving them alone.
Lifco takes a very long-term perspective on its investments and basically owns the companies for ever.
This permanence—so rare in modern capitalism—creates something valuable for all stakeholders. Sellers get permanent homes for their life's work. Employees get stable ownership. Shareholders get durable compounding. And the businesses themselves get freedom from the short-termism that destroys value elsewhere.
Lifco's business concept is to acquire and develop market-leading niche businesses with the potential to deliver sustainable earnings growth and robust cash flows. Lifco is guided by a clear philosophy centred on long-term growth, a focus on profitability and a strongly decentralised organisation.
The simplicity of this statement belies its difficulty in execution. Anyone can write these words. Executing them consistently, for decades, through recessions and booms, leadership transitions and competitive pressure—that's what separates Lifco from the failed roll-ups that litter corporate history.
Owning a serial acquirer is like owning a fund that buys private companies and aims to never sell them. A publicly traded coffee can portfolio of sorts. What it comes down to, then, is a bet on capital allocation, a bet on the people and the process.
For investors considering Lifco, the question isn't whether the model works—decades of evidence prove it does. The question is whether current valuations adequately reflect the model's durability, whether the next two decades can match the last two, and whether the succession of Carl Bennet's controlling stake will preserve what makes Lifco special.
Sweden has given the world IKEA's flat-pack furniture, Spotify's streaming music, and H&M's fast fashion. In Lifco, it has produced something equally distinctive: a template for perpetual industrial compounding that has turned a post-war dental supply company into one of Europe's most remarkable wealth-creation machines.
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