PE Roll-Up
A private equity strategy that buys many small businesses in the same industry and combines them into one larger company — often the buyer behind small-business sales today.
A PE roll-up (or "platform-and-add-on" strategy) is when a private equity firm buys one larger business in a fragmented industry — the "platform" — and then uses it to acquire many smaller businesses in the same industry, combining them into a single larger company. The platform might be a $10M EBITDA HVAC company. The add-ons are 5–15 smaller HVAC companies, each doing $500K–$3M in EBITDA, that get acquired and integrated over 3–5 years. By the time the PE firm sells the combined entity, it might be doing $50M+ in EBITDA — and they sell at a higher multiple than any of the individual pieces would have commanded standalone. The entire industry has shifted toward this model over the last decade. Roll-ups now dominate buying in HVAC, plumbing, dental, veterinary, accounting, landscaping, pest control, electrical, IT services, and dozens of other fragmented industries.
If your business is in a fragmented industry where roll-ups are active — HVAC, plumbing, dental, accounting, landscaping, IT services — you're more likely to sell to a roll-up than to any other buyer category.
The roll-up buyer isn't pricing your business standalone — they're pricing what your business becomes once it's part of their platform.
Find out what a buyer would see in your business — before you talk to one.
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