Chris Evans

6th October 2020


Why not buy a better business?

The economic ripples of COVID-19 have led to something of a gold rush as companies scramble to pick up distressed businesses at knock down rates. Most industries, even those enjoying relatively healthy sales growth in 2020 have been buffeted by the consequences of the pandemic. As a result, the vultures are circling and buying up their distressed rivals or pivoting and snapping up distressed assets in new or auxiliary markets.

But why not buy a better business?

While companies are rushing to buy bargains, perhaps buying quality is a better option for your business. As with all other walks of life, buying something from the bargain bin is often a series of compromises in terms of quality and even longevity. Why not go for a top shelf, high performing business? In the current climate, there is a real danger that buying a distressed company could see you invest in something that may never return to its former glory.

Here are the pros and cons of buying a better business versus buying a distressed company:

Buy a better business

Buy a distressed business


Highly profitable

Often high growth

Few post-acquisition changes         


Much cheaper

Willing sellers

Add sales to your portfolio


High price

Reluctant sellers

Often reliant on a 'visionary' leader                 


A lot of post-acquisition improvements

Is poor performance a sign of poor culture?

Potentially in terminal decline

 The ongoing demand for M&A opportunities in the face of a pandemic is obvious. COVID-19 has exposed weaknesses in many companies’ business models across all markets including:

  1. Dependencies – Many companies have been caught out with too narrow a product range.
  2. Exposure – Many companies are too reliant on too few big customers.
  3. Direct access to market – Many firms have been caught out by not selling direct to market.

Despite these clear business model weaknesses, most companies on the acquisition trail seem bent on growing their business by snapping up a distressed competitor in bargain deal. Buying a distressed company with one of the above deficiencies could see you catch a falling knife. 

Clearly, the easiest of the three deficiencies to address is having too narrow an offering. There are opportunities to buy a strong rival, a company in a related market or even to acquire a customer.

The following is a list of the 10 industries with the highest proportion of strong performing companies:


Strong companies

Brickwork Contractors


Measuring Instrument Manufacturers


Air Compressors


Electronic Component Distributors


Seals & Gasket companies


Consulting Engineers


Civil & Structural Engineers


Control Panel Manufacturers


Electrical Inspection & Testing


Food Machinery companies



Plimsoll can help you to identify good businesses to acquire across 1600 different UK markets and beyond. Whatever your M&A criteria, it pays instant dividends to have a pre-defined list of potential targets, a comprehensive list of alternatives and an in-depth understanding of the financial health behind each name. Plimsoll can help you build your list today.

Please visit to find out more about the industries that matter to you.