Definition
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.
What it means for you
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 buyer’s lens
The roll-up buyer isn't pricing your business standalone — they're pricing what your business becomes once it's part of their platform.