An investment strategy consisting of acquiring a platform company and making successive acquisitions of smaller companies in the same or complementary sectors, to create a larger group with greater scale and value.
In sectors where hundreds of small companies are doing the same thing, the value lies in bringing them together. A build-up is the strategy of buying a company and using it as a platform to acquire smaller ones, creating a larger group worth more than the sum of its parts. It is the most efficient way to build a company of meaningful scale in fragmented markets.
A build-up (also called an aggregation strategy, roll-up, or buy-and-build) is an investment strategy in which an investor — typically a private equity fund or a family office — acquires a reference company (the “platform”) and then makes multiple acquisitions of smaller companies in the same sector or complementary sectors (the “add-ons”), with the aim of creating an integrated group of greater scale.
The economic rationale is twofold:
Multiple arbitrage. Small companies are acquired at low multiples (4-6x EBITDA) and the resulting group, larger and more diversified, is sold at higher multiples (7-10x EBITDA). That multiple gap is pure value creation.
Operational synergies. Integration generates savings in procurement, administration, technology, sales, and management. Small companies share fixed costs that individually they cannot amortise.
The investor acquires a mid-sized company to serve as the build-up’s base. The ideal platform has:
The market is mapped to identify smaller companies that fit:
Acquisitions are executed sequentially (or sometimes in parallel), integrating each add-on into the platform. Each acquisition must add value: new customers, new geographies, new capabilities, or economies of scale.
The critical phase. Centralise functions (finance, HR, procurement, IT), professionalise management, implement common systems, harmonise the brand and value proposition.
The resulting group — larger, more diversified, more professionalised — is sold to an industrial buyer or a larger fund, capturing the multiple arbitrage and synergies created.
The Spanish business fabric is extraordinarily fragmented. In many services and industrial sectors, the leader has less than 5% market share and there are hundreds of family businesses with revenues between 2 and 15 million. Many of these companies have founders at retirement age, no succession plan, and no access to natural buyers.
This creates perfect conditions for a build-up:
Blue Mountain identifies a build-up opportunity in the industrial maintenance services sector in Spain:
Platform (year 1):
Add-ons (years 2-4):
Resulting group (year 5):
Value creation: EUR 21M (multiple arbitrage + operational synergies).
Usually one platform and 3 to 8 add-ons over 3-5 years. The pace depends on target availability and integration capacity. More important than quantity is the quality of each acquisition and integration discipline.
Fragmented sectors without a clear leader: industrial services, medical clinics, specialised distribution, engineering, cleaning, technical consulting. The key is that there must be genuine economic logic for consolidation (not just multiple arbitrage, but real operational synergies).
The investor provides capital and M&A expertise; the platform management team leads operations and integration. The most successful build-ups combine a disciplined investor with a strong industrial CEO.
If you wish to explore a potential collaboration or present an investment opportunity, we invite you to contact us. We guarantee absolute confidentiality in all our conversations.