Picture a founder. (Made-up example, very common story.) 30 years building a company that makes snow plow attachments. Good margins, loyal customers, no kids who want the keys.

Who buys it?

Often, a serial acquirer. A holding company that buys small, profitable, family-run businesses, keeps the founder around, and lets the company run itself. 🐬

Karnell (Stockholm: KARNEL B) is one of the youngest of them. It listed in early 2024. It now owns 20 companies across Sweden, Finland, the UK and Northern Italy. And its operating profit (EBITA) grew about 92% a year from 2021 to 2025.

A number like that makes most people want to buy first and read later. We read first. You're still reading, so you do too.

And if you run a company yourself, stay to the end. Karnell's price list shows what this kind of buyer pays for a good small company.. and what makes them pay more.

The Compounding Tortoise (one of the research shops we trust most) published a deep dive on Karnell on 21 October 2026. We ran it through our own two lenses and our 5 scenarios.

The short version: the 92% is mostly buying. Without it, the Tortoise estimates profit grew about 7% a year. Our base case: about 10% a year for 5 years, a range from about -14% to +25%, and a price that already assumes a lot of buying goes right. It stays on our watchlist. We don't buy at 94.70 SEK.

What Karnell actually does

Karnell buys small industrial technology companies: roughly 50 to 350 million SEK in sales (about €5-35M), with an operating margin of 10% or more. Most are family-owned and looking for a succession answer.

Two kinds of companies sit inside:

• Product companies: they make their own products. Think snow plow attachments, maritime ventilation, reusable plastics for hospitals.
• Niche companies: contract manufacturers that build to order for bigger industrial customers.

The pitch to investors is simple: these products are a small line in the customer's running costs, not a big investment decision. So demand should be steadier than a machine maker's. 🐯

The numbers that already happened

• Sales: about 300 million SEK in 2021, 1.76 billion SEK pro-forma in 2025
• Operating margin: 6.2% in 2021, 14% in 2025
• Q3 2026 operating profit: 120 million SEK (preliminary, full report on 23 October)
• Net debt at the end of Q2 2026: 945 million SEK, of which 145 million is leases. That's 1.9x after-lease EBITDA (yearly cash profit), 2.4x once you count money still owed to sellers.
• Goal: more than 4 acquisitions a year (it did 1-2 a year before the listing)

Why it's interesting

1. The math of buying small is real. Karnell has paid about 6.5-8x operating profit for its companies. Big listed industrial groups often trade at much higher multiples. Buy at 7x, own it inside a group the market values higher, and you create value on day one.

2. Early in the journey. At about 380 million SEK of yearly operating profit (the Tortoise's 2026 pro-forma number), a single deal can move the needle. The giants of this model need dozens.

3. Founders stay involved. Karnell usually buys 90% or more and leaves the rest with the seller. The person who built the company keeps skin in the game.

4. 2026 is a strong year. Organic growth hit records, and Karnell put out early preliminary results that beat expectations.

What the 92% hides

Now the bitter part.

The growth came mostly from buying, funded with debt and new shares. Strip out acquisitions and one unusual customer, and the Tortoise estimates operating profit from the existing companies grew about 7% a year. Solid. Not spectacular.

That 2026 boost leans on one customer. One niche company saw a surge in orders from one client. Karnell's own management calls that level unsustainable. So part of this year's profit will fade.

The returns are good, not great. The Tortoise adjusts for Karnell's short building leases (about 2.9 years, which flatter reported returns). After that, return on invested capital is about 14% in 2025 and about 19% in 2026. In their words, the returns on new money "aren't exceptional."

And 7x isn't a free lunch. Pay 7x operating profit for a company and, after tax, you earn about 11% on your money in year one. Our cost of capital sits around 9%. That's a thin spread for a model that runs on debt.

Our two lenses

Toll Bridge (chokepoint test): 8 of 14, "Contested." Karnell owns a basket of small toll booths, not one bridge. Each company is good at its niche. None is a road the whole industry must drive over. Our buy line is 9 or higher, so it doesn't pass.

Mauboussin (what the price assumes, after investor Michael Mauboussin): at 94.70 SEK the whole company (shares plus debt) is valued at about 20x this year's after-tax operating profit. About 40% of that value is future growth. To justify the price, Karnell has to keep earning about 13% on new money for roughly 17 more years. At 11%, it needs about 32. That's a long runway to pay up for today. 🌴

For comparison: HEICO, which we covered on 9 October, needed about 13 years.

Expected returns: 5 scenarios

Our simple model: start from 293 million SEK of after-tax operating profit (the Tortoise's 2026 pro-forma number), grow it for 5 years, apply an exit multiple, compare with today's enterprise value of about 5.8 billion SEK (94.70 SEK a share plus net debt). It ignores debt changes, which flatters the bad cases. It's a map, not a promise.

The Tortoise's own, fuller model gives about 13% a year. The gap comes from their assumption that Karnell keeps reinvesting more than 100% of its profit into new deals for years, with debt helping. Our simpler math doesn't give credit for that.

Weight the scenarios with our own judgment (10 / 20 / 45 / 20 / 5, opinion, not data) and you get roughly 9-10% a year. Below our 12% hurdle.

Where it gets interesting: around 80 SEK. At that price the same base case gives about 13% a year.

What we're watching

• 23 October, Q3 report: how much of the growth is the one big customer?
• 2027 organic profit: does it hold up once that customer drops back?
• Deal prices: above 7.5x operating profit is a red flag.
• New shares: every equity raise dilutes what you own.

And one more: the Tortoise itself prefers another Finnish serial acquirer, Auroora (13.8% base case, expected net cash within 10 years, far less money tied up in inventory and receivables). Worth a look if this corner of the market interests you.

The lesson for your own business

Remember the snow plow founder from the top? Here's the part we can't stop thinking about.

Karnell pays about 6.5-8x operating profit for a well-run family company. That's the going rate at this kind of buyer.

So what makes a buyer pay more? Or pay at all?

A company that runs without the founder in every sales call. A sales process a new hire can run. A team that leads the conversation with buyers.. no chasing, no begging for the yes. A yes you hear because the process is in control, not because the founder shows up and pushes.

A business where only the founder can close is hard to buy. A buyer picks up that scent in the first meeting. A business with a repeatable sale is an asset. 🐬

Build the second one. As long as every sale still runs through you, you own the first kind.

Picture a Tuesday where a new hire closes a deal you never joined. Then you get to choose: keep the keys and enjoy the cash, or hand them over on your terms. That's control. That's a Sprintlife.

One move for this week: look at your last 5 closed deals. Count how many needed you in the room. 🐯 That number is your starting point.

Not investment advice. Do your own work. Numbers as of 22 October 2026, price from MarketScreener.

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Happy hunting.
Simon & The Sprinters 🐬⚡️🐆