With one more quarter in the fiscal year, more companies, yet of a spacial nature, has recently joined our portfolio. Noteworthily, companies joining are part of backward integration deals that have been in discussions for over 2 quarters.
Industries
Trade, Groceries and Construction
Markets
Local, National and International/ Mediterranean
Integration
Operating Supply Chain
Type
Equity and Non-Equity-based Mergers and Acquisitions
Firm’s Role
Fair Stock Valuation, Investment, Negotiation Consulting and Auditing
Backward Integration
Backward integration is a business strategy where a company acquires or merges with a supplier of raw materials or components in its supply chain to control costs, ensure quality, and gain a competitive edge. This is a form of vertical integration, allowing a company to own earlier stages of production, from raw materials to the final product.
With these companies joining recently, our portfolio statistically has more backward integrations than ever by the end of 2025.
The relevance of backward integration cannot be overstated. As markets become increasingly volatile due mainly, at least in the US, to ever changing national decisions, and to supply chain disruptions that more frequent, companies are recognizing the strategic value of controlling their upstream operations.
Owning or controlling suppliers means companies can reduce their dependency on external parties and minimize risks from supply disruptions, price volatility and quality inconsistencies.
Direct ownership of supply sources eliminates middleman markups and provides better predictability in cost structures, especially crucial in industries facing inflation pressures, nominally business that are already suffering from unavoidable costs such as congestion pricing.
When companies control their supply chain backwards, they can implement consistent quality standards from raw materials through to finished products, ensuring brand integrity.
Integrated supply chains allow for faster response to market changes and customer demands, providing a competitive advantage in dynamic markets.
For our US portfolio companies in trade, groceries, and construction sectors, backward integration has proven particularly valuable given the commodity price fluctuations and supply chain challenges these industries have faced post-2020. The Mediterranean markets we operate in have also shown strong demand for vertically integrated players who can guarantee supply continuity and competitive pricing.