AddLife: Growth through decentralisation
AddLife heads up a network of over 30 labtech and medtech subsidiaries that distribute equipment, consumables, supply services and advisory solutions across the Nordic region and beyond into Europe, the US and China. AddLife was formed out of the Life Science business area of the Addtech Group in 2015, and the legacy, from this company, and from Bergman & Beving before that, means that it builds on a century of success.
As a listed company based in Stockholm, AddLife has a rather unusual but well-proven business model. While many companies grow by acquisition, most will move towards integration in an attempt to consolidate and avoid duplication. However, AddLife has gone in the opposite direction, creating a network of more than 30 separate companies, each a market leader with its own niche focus.
"The company has its roots in the 1940s, and aimed to find synergies as it grew," said Kristina Willgård, CEO. "By the 1970s, management saw that acquiring small companies and maintaining them as separate subsidiaries could be more flexible and faster moving in a rapidly-changing market, and were proven to be successful where the larger players just aren't working. Through our subsidiaries, we are today the largest distributor of in vitro diagnostics [IVD] in the Nordic region."
Growth through acquisition
"AddLife has a clear strategy for acquisitions. We normally do not search the market for start-ups but rather profitable and well established companies in niche segments; we know what we are looking for, where and when," said Willgård. "If the founders continue in the company that’s a plus, since AddLife’s business model is built on true entrepreneurship."
Recent acquisitions include Norwegian Hepro, which works with home care products and welfare technology, TM Techno Medical, an enteral nutrition supplier, Biolin Scientific, a Nordic developer and manufacturer of instruments for material analysis in nanotechnology.
"We also signed two larger agreements last year; to represent Medline, a global medical equipment provider, in the Nordic region, and Leica Biosystems, a global leader in advanced cancer research and diagnostics, in Denmark and Sweden. We have incorporated their businesses into our subsidiaries Mediplast and Triolab. We were very proud that Medline and Leica Biosystems approached us," said Willgård.
A company with so many subsidiaries will inevitably have some overlap, but Willgård sees this as a strength based on synergy rather than competition: "While our subsidiaries share some products, they work within different niches and have different strengths."
Growth through innovation
AddLife's two areas of focus are: labtech, including instruments and reagents for diagnostics and research; and medtech, supporting hospital and home care. The company prides itself on its agility and innovation, driven by its decentralised entrepreneurial model.
"Technology changes fast, and small companies can work as pioneers and innovators more easily than large companies. We also find that employees are more engaged, can achieve more and show more passion for their work. We have the strength of a large company, with the smartness and flexibility of a small company. We describe this as combining small scale business and large-scale life," said Willgård.
Growth through expansion
AddLife is based largely in the Nordic region, which includes four countries with four different languages, and four very different geographies. The main similarities among all Nordic countries is the shaping of the public sector which is the main market for AddLife’s subsidiaries.
"We know the Nordic region very well, and are aware of its challenges which 'outside' players can underestimate. We plan to expand beyond the Nordic region, and have taken the first step by acquiring subsidiaries with business in the US, China and the UK. We are also moving towards increasing our own private labelled products, which will make the international move easier," said Willgård.
Growth through people
Willgård believes strongly that one of the things that makes AddLife different is the people: "We have a strong network of engaged and committed employees, and we allow them the freedom to innovate, along with responsibility and trust."
This is supported by AddLife's own business school, the AddLife Academy, which is attended by all the employees in the company. The courses include sales, marketing and finance, and allow people from the separate subsidiaries to meet up.
"When we acquire new companies and tell them about how we work, one of the things they really appreciate is the school, as small companies cannot usually access this kind of support. Of our 600 employees, well over half attended courses last year," said Willgård.