Private equity (PE) firms are embracing add-on acquisitions like never before. Once seen as tactical enhancements, buy-and-build strategies are now central to PE value creation. According to PitchBook’s 2025 Global PE Report(Opens a new window)(Opens a new window), add-ons accounted for nearly 74% of all deal activity in North America.

Top firms today pre-wire their buy-and-build strategies early – defining adjacency targets, integration models, and funding limits at platform launch. This updated playbook outlines how top-performing PE firms maximize the value of their buy-and-build strategies.

Why add-ons are taking over

The surge in add-on activity isn’t accidental – it’s a response to structural opportunities in fragmented markets and the need for accelerated growth. Here’s why buy-and-build is dominating the PE playbook.

• Fragmented markets offer consolidation potential: Many sectors still contain numerous small to mid-sized firms ideal for roll-ups.
• Scalability through shared infrastructure: Centralizing systems like ERP and CRM allows margin expansion.
• Revenue synergies and cross-sell opportunities: New products and geographies drive customer wallet share.
• Speed to market and talent acquisition: Acquiring IP, teams, and customer bases accelerates growth versus organic build.

Where add-ons can go wrong

Despite their promise, add-ons can derail value creation if not executed with precision. These common pitfalls highlight where even experienced firms can stumble and what to watch out for.

• Integration failures: Lack of 100-day plans and integration leadership slows value capture.
• Overestimating synergies:Many synergy projections fail without owner accountability.
• Cultural misalignment: Founder-led teams may resist new governance unless change management is strong.
• Customer churn and service disruption: Poor handoffs damage brand trust.
• Underinvestment in systems: Disparate platforms hinder operational visibility

Strategic enhancements for success

Winning firms don’t just acquire; they integrate with intent. These strategic enhancements separate top performers from the rest, better ensuring that each add-on strengthens the platform rather than diluting it.

• Strategy first: Add-ons must fit the platform’s core growth trajectory.

• Integrated due diligence beyond financial and tax:

1. IT/Software/Cyber/ Privacy due diligence: Identifies technology risks and opportunities that support growth.
2. Synergy assessment: Quantifies and validates synergies to more accurately assess deal valuation and value creation opportunities.
3. Integration risk assessment: Proactively identifies integration challenges, enhances planning, and reduces time to integration.
4. Supply chain and tariff due diligence: Deep dives into a target’s supply chain exposure to countries affected by tariffs. Modeling “what-if” scenarios to understand tariff cost implications on EBITDA and valuation as well as evaluating input cost sensitivity and re-shoring capabilities.

• Early integration planning: Successful firms build the 100-day plan before closing focused on value drivers of the deal.
• Operating model discipline: Balance centralized efficiency with decentralized speed.
• Culture and talent retention: Secure leadership alignment early using equity incentives.
• Scalable infrastructure: Unified ERP, CRM, and analytics systems provide real-time control.
  
• Geopolitical and tariff risk management: Even tech and services firms must map cross-border exposure to suppliers and data hosting risks.

Metrics that matter across industries

To measure success, you need the right KPIs. These metrics go beyond financials to capture the full impact of integration, scalability, and cultural alignment across the portfolio.

What buyers want at exit

When it’s time to sell, buyers look for more than just growth, they want proof of sustainable value creation. Here’s what makes a platform stand out in a crowded exit market:

• Clear integration playbook and case studies
• Unified systems and clean financial reporting
• Documented synergy realization across brands
• Resilient supply chains and minimized tariff exposure
• Proven talent retention and leadership continuity

Operate like a top PE firm

Add-on acquisitions offer an unparalleled lever for PE firms – but only when combined with platform discipline, strategic fit, rapid integration, cultural sensitivity, and operational scalability. Top operators not only scale faster – they build smarter and exit stronger.