Core Strategy

BMP's "Buy and Build" Approach

We apply our Core Company Investment Strategy, developed by the Boston Millennia Team over the past 25 years, where appropriate to enhance the growth of our portfolio companies. The Core strategy is based on the use of a strategic acquisition program to build a large-scale business around an existing company.  We often identify potential Core Companies in fragmented, high growth markets that are undergoing a significant evolution.

The Core strategy extends beyond a traditional roll-up or “platform” buyout investment approach. It uses elements of those approaches to accelerate the growth of companies that have already demonstrated that they are positioned to benefit from the application of a proven technology or a shift in industry dynamics.

The goal of a Core Company acquisition is typically strategic; the acquired company will add new skills and business opportunities, in addition to horizontally expanding similar operations.  Our Core Companies have completed over 200 acquisitions.

Core Company Selection

A Core Company should have strong local or regional market presence, be participating in rapid industry growth, and have competitive advantages from new technologies or strategies that drive change in the industry.  We look for companies that have the potential to achieve at least $50,000,000 in annual revenues within three to five years.  Our Core Company investments often result from proactive research efforts in targeted industries.  Once a promising sector has been identified, we speak to industry leaders, attend industry conferences and trade shows, and conduct data driven research to identify Core Company candidates.  We will then contact the management of these companies directly to initiate investment discussions.  This form of proactive origination fosters Boston Millennia’s proprietary deal flow.

Core Company Risk Management

Our Core Company strategy mitigates risk in three ways:

  1.  Rather than take the risk of developing a new technology, we focus on the implementation of proven technologies as a new solution to an existing customer requirement.  This reduces technology risk.
  2.  The Core strategy targets companies that have strong revenue growth ensuring the company’s products or services find market acceptance.  This minimizes commercialization risk.
  3.  Since the Core strategy involves the consolidation of a fragmented industry, Core Companies are less prone to liquidity risk.  If a Core Company is unable to achieve its revenue and income objectives within a reasonable time, its assets and cash flow will typically make it an attractive acquisition target for a larger consolidator in the industry.