Judges Scientific (JDG) (Judges) has done a great job of buying and building scientific instruments companies. It has bought very good, niche companies at cheap prices and then helped them to grow. The value created for its investors has been impressive. Can the strategy continue to deliver?
Companies that grow by acquisition are often treated with suspicion. This is no bad thing given the numerous corporate disasters that have come from acquisitions that have gone wrong. It doesn’t have to be this way. Halma (HLMA), Diploma (DPLM) and Bunzl (BNZL) have shown that a combination of acquisitions that do not stretch a company operationally or financially, while showing that their existing businesses can still grow is a recipe for long-term success.
I think Judges Scientific can be added to the list of successful acquirers. Its strategy and approach to buying is to be admired but there are grounds for thinking that this might have to change it slightly going forward.