Lagercrantz

"Lifco: 21-bagger—33% CAGR since IPO in 2014. Indutrade: 50-bagger—22% CAGR since IPO in 2005. Bergman & Beving (including spin-offs): 7,500-bagger—20% CAGR since IPO in 1976. Lagercrantz: 120-bagger—23% CAGR since IPO in 2001. Addtech: 210-bagger—26% CAGR since IPO in 2001. Constellation Software: 375-bagger—37% CAGR since IPO in 2006. Heico: 1,100-bagger—22% CAGR since 1990. AMETEK: 175-bagger—16% CAGR since 1990. Judges Scientific: 115-bagger—24% CAGR since IPO in 2003."

"Take Lagercrantz’s adroit navigation of the risk of commoditization when, loaded down with useless stock, it switched from product distribution to acquiring and developing niche product companies."

"Lagercrantz began grouping them into clusters based on their unique areas of expertise. This shift, driven by Ahlberg’s vision, allowed the company to acquire businesses like Asept International—known for its ketchup dispensers—Tormek, and Wapro. Tormek, acquired in 2018, developed a unique sharpening system that has set the standard in modern edge tool sharpening. Wapro, acquired in 2017, is a market leader in high-quality check valves and flow control systems. Both companies would have been difficult to place within the previous structure. The impact"

"Lagercrantz operates as an investor without being tied to particular labels. Each segment shares a common purpose: to seek out highly specialized businesses promising robust returns while maintaining certain consistent themes."

"As a generalist acquirer, Lagercrantz benefits from considerable flexibility, facing no sector-specific constraints that could hinder its adaptability."

"Lagercrantz has achieved a 28% annual total shareholder return (as of May 2025), making Lagercrantz more than a 100-bagger. During the same period, free cash flow per share has grown at an annual rate of 16%, with an average return on invested capital of 19%.25"

"Lagercrantz has well-defined growth objectives that encompass return metrics. The company aims to achieve 15% annual earnings growth over a business cycle, with a minimum of one-third attributed to organic growth and the remaining portion driven by 8–12 acquisitions per year."

"Jörgen Wigh not only recognized Lagercrantz’s potential to pivot into acquiring highly specialized businesses with proprietary products almost 20 years ago. He also set the company on a path for geographic expansion. With a strong cultural foundation and a decentralized approach, he successfully led Lagercrantz into new markets in recent years."

"Lagercrantz operates through five distinct divisions—Electrify, Control, TecSec, Niche Products, and International—each specializing in unique technologies."

"they represented pride in victories in their internal “Champions League,” where subsidiaries vie against each other to achieve cash flow-related objectives. Ingrained through an internal entrepreneurship handbook, this unique competition illustrates a deep-seated culture of excellence and achievement. The ethos of prioritizing cash-return goals is integral. They are a commitment shared by every employee across Lagercrantz, and ultimately they produce above-average entrepreneurs."

"This pivotal moment pushed the company to rethink its entire strategy. No longer willing to be at the mercy of others, the firm decided to take control of its future. The answer? A gradual shift from distribution to ownership. Lagercrantz began acquiring and developing niche product companies. This wasn’t just a new direction—it was a transformation that brought higher margins, greater flexibility, and, ultimately, resilience."

"In addition to the hubs, Lagercrantz supports growth and development through a range of practical resources. The Lagercrantz Growth Fund offers financial backing for strategic initiatives. Business Improvement Modules (BIMs) and access to functional experts help strengthen internal capabilities across key business areas."

"Other important people who contributed to Lagercrantz’s continuous success are Peter Thyssel, the CFO; Jonas Ahlberg, head of M&A; and Andreas Heder, head of the control division. Peter Thyssel has been with the company since December 2021. He is involved with all acquisitions and responsible for group sustainability and IT. Before joining Lagercrantz, he was the CFO and IR director of RaySearch Laboratories for close to seven years. Jonas Ahlberg, senior executive vice president, took on the role of head of M&A in April 2024. Since joining the group in 2012, he has played a key role in developing the Niche Products division at Lagercrantz."

"As a perpetual owner, Lagercrantz expresses its ownership through the board of each subsidiary. The activities of the subsidiary boards are diligently monitored by division heads, ensuring oversight and alignment with the overall group’s goals. Quarterly meetings of subsidiary boards are typically convened to assess operational activities and ensure the successful implementation of the approved business plans. These gatherings provide a platform for evaluating progress, identifying areas for improvement, and taking necessary measures when required."

"Under Jörgen Wigh’s leadership, decentralization became not just an organizational structure but a guiding philosophy that unleashed entrepreneurship and local adaptability. By focusing on acquiring niche companies with their own, often long-lived products, Lagercrantz created a more stable and high-margin-oriented business. The establishment of the Niche Products division symbolized this new direction."

"Lagercrantz’s International division plays a key role in executing this export-focused approach. It extends the group’s successful “niche products” strategy to global markets by building product-specific companies within the division itself. This model, already proven within the group, has led to the formation of successful clusters—such as the marina cluster—and has fueled the growth of companies like Schmitztechnik in Germany and DPC Ilse in the UK."

"Söderlind’s priorities centered on profitability. Drawing on an approach similar to the one used at Lagercrantz, he started by phasing out low-margin, high-volume products. The result was a gross margin increase from 41% to 47%, contributing to a substantial rise in operating profit. The strategy was clear: increase returns and make the company more resilient by diversifying into new niches. Acquisitions became a primary driver of growth, setting an ambitious target of adding SEK 50m–80m in EBITA annually. However, Söderlind deliberately targeted only financially strong companies with EBITA margins above 15% and solid growth potential. Since he took office, Söderlind has acquired more than 20 companies, all meeting these criteria."

"Andreas Heder led the M&A and business development department at Lagercrantz before Ahlberg took over. He has 25 years of international experience in telecommunications, specializing in corporate development and M&A. Heder joined Lagercrantz in June 2021. He transitioned to his new role as head of the control division in April 2024."

"A deeply nurtured cash culture and simple profit goals sustained over decades—like the focus on profit over working capital (P/WC) that Bergman & Beving, Addtech, and Lagercrantz religiously adhere to—is essential for the model to work. It is the true differentiator between transactional players chasing “deals” and the compounders. The latter take a low-risk approach to growth and master the art of “building”—not just “buying.” These risk-mitigating characteristics built into the self-funding model explain why many of the compounders in this book boast multi-decade track records of uninterrupted compounding."

"Wigh led a strategic shift to ensure the company’s future success, focusing on acquiring product companies with intellectual property rights and extended product life cycles. This strategy not only afforded greater sales flexibility and higher margins but also retained outsourced production, optimizing returns on capital. Concurrently, the management team steered Lagercrantz back to its Bergman & Beving heritage, promoting decentralized decision-making to cultivate a more adaptive and responsive organizational structure. This holistic approach positioned the company for resilience and growth in a dynamic business landscape."

"His track record was impeccable. He had spent 14 years at Lagercrantz as both deputy CEO and head of M&A, and played a pivotal role in transforming the company into a highly successful business. During his tenure at Lagercrantz, the company’s market capitalization grew from SEK 850m ($85m) to SEK 18bn ($1.8bn). At Lagercrantz, Söderlind specialized in acquiring high-margin companies with proprietary products that delivered strong returns. Over the course of his tenure, he demonstrated significant talent for making deals in the private market, leading more than 50 successful acquisitions."

"The company she had bought shares in? Bergman & Beving. Along with two of its spin-offs—Addtech and Lagercrantz—it is one of nine extraordinary firms you will meet in the pages ahead. A $1,000 investment in 1976 would have increased to $7.5 million today—excluding all dividends received. It is far from the only company in this book to have delivered such outstanding returns."

"Ingrained through an internal entrepreneurship handbook, this unique competition illustrates a deep-seated culture of excellence and achievement. The ethos of prioritizing cash-return goals is integral. They are a commitment shared by every employee across Lagercrantz, and ultimately they produce above-average entrepreneurs."

"Toolboxes and support: the choice is yours A central part of Lagercrantz’s strategy is the creation of global hubs to support exports. The core idea is to take the specialized products developed by its portfolio companies—many of which originate in the Nordic region—and introduce them to international markets."

"Acquired companies may have established customer bases, brand recognition, or distribution networks that Lagercrantz can leverage to expand its reach. This is a highly effective way to accelerate the company’s growth and increase its market share. Acquisitions can also provide Lagercrantz with access to new technologies or capabilities. By acquiring companies with unique technological assets, Lagercrantz can enhance its product offerings, improve its operational efficiency, or gain a competitive edge."

"Lagercrantz supports growth and development through a range of practical resources. The Lagercrantz Growth Fund offers financial backing for strategic initiatives. Business Improvement Modules (BIMs) and access to functional experts help…"

"Lagercrantz owns product companies with intellectual property rights, outsources production, and operates value-added distribution companies. Consequently, the denominator of the return metric predominantly comprises accounts receivable and inventory minus accounts payable, reflecting the company’s asset base."

"The new division: Niche Products In 2012, Jörgen Wigh made an important move that redefined Lagercrantz’s future. He established Lagercrantz’s fourth division, Niche Products. For the key role of leading the division, Wigh handpicked Jonas Ahlberg, a former management consultant and two-time entrepreneur. Until then, Lagercrantz had operated with just three divisions: Electronics, Mechatronics, and Communications. However, as the company expanded, not every acquisition fit neatly into these categories."

"A central part of Lagercrantz’s strategy is the creation of global hubs to support exports. The core idea is to take the specialized products developed by its portfolio companies—many of which originate in the…"

"In addition to the hubs, Lagercrantz supports growth and development through a range of practical resources. The Lagercrantz Growth Fund offers financial backing for strategic initiatives. Business Improvement Modules (BIMs) and access to functional experts…"

"Focusing on return on working capital as a measure of return on capital is well-suited for a company like Lagercrantz."