Addon acquisition case: Two real companies, 2020–2025

Add-on acquisitions in M&A are a repeatable method to grow a platform by buying smaller, complementary businesses and folding them into a core platform to create value quickly.

Logically, the core idea is multiple arbitrage plus a clear path to synergies. In practice, add-ons let a platform expand capabilities, customer reach, and geographic footprint without starting from scratch. The mechanism moving the ball is multiple arbitrage: the add-on is bought at a lower multiple than the platform, and the combined entity is valued at a higher multiple. In the current environment, private equity buyers have pushed higher valuations by outbidding strategics on EBITDA multiples. For Q3 2025, sponsor activity lifted transaction values 23.5% quarter-on-quarter to an average enterprise value of $83.9 million. That shows PE is willing to pay for Roll-Up momentum as a value driver, not solely for strategic fit.

Synergies and practical impact of add-ons

Synergies matter (but they are not always the headline). In add-ons, you see cost savings from eliminating duplicate functions, economies of scale in procurement and back-office, and revenue upside from cross-selling across a shared client base. The work focuses on operational discipline and integration playbooks rather than market re-education. When platform and add-on teams align on processes, data, and customer goals, you can realize meaningful optimization in 12 to 24 months.

Inorganic growth as a practical outcome

Inorganic growth is the practical outcome. Add-ons let a platform gain market share, build product breadth, and expand footprint faster than organic routes alone. The strategic logic remains: acquire, integrate, optimize, and scale.

Market activity and leading players in buy-and-build

Market activity shows a clear appetite for buy-and-build strategies. Top performing PE firms between 2020 and 2025 include TA Associates, Insight Partners, Genstar Capital, Vista Equity Partners, Thoma Bravo, CPP Investments, Main Capital Partners, Leonard Green & Partners, PSG, and The Riverside Company.

TA Associates stands out, with more than 50 add-on deals on its platforms in the last three years. Genstar targets fintech and business services to build category leaders, while Vista and Thoma Bravo push roll-ups in software to scale platforms.

Portfolio add-on activity and typical patterns

Portfolio company add-on activity clusters around a few aggressive platforms. The typical portfolio shows 1-2 add-ons, but a few stand out with higher counts. The maximum add-ons for a single portfolio reached 71, held by Mercer Advisors, cco-owned by GenStar Capital, Oak Hill Capital, and Atlas Partners. For portfolios with at least one add-on, the median is two.

Real-world case study: Ryze Claim Solutions

Real-world case study: Ryze Claim Solutions. Ryze Claim Solutions was recapitalized by Bain Capital Insurance in 2024, establishing a national Property & Casualty claims platform. Add-on strategy: since recapitalization, Ryze has acquired two regional adjusters to expand its platform, Leading Edge and Acorn. They were integrated into a unified operating model. Synergies: Ryze has begun cross-selling newly acquired capabilities into insurer relationships, including specialized investigations and legal services. Bain Capital’s approach shows how a platform can be reinforced by add-ons that fit the core workflow and client base, then extended through cross-selling and back-end integration. The result is a more resilient platform that can win larger client relationships and deeper service lines over time.

Best practices for practitioners

From a practitioner’s standpoint, the right playbook for add-ons hinges on disciplined deal selection, a repeatable integration playbook, and clear value capture paths. You want add-ons that fill gaps in the platform’s product line or geographic reach, not just add headcount. You want an integration plan that standardizes data, consolidates back-office functions, and aligns go-to-market motions across the platform and the add-ons. You want to lock in revenue upside through cross-selling, bundled services, and shared client ecosystems.

Current stance on add-ons in mid-market M&A

Where this leaves us today: add-on activity remains a primary engine for growth in mid-market and upper mid-market M&A. The environment supports it as a primary value driver, not a secondary tactic. If you’re evaluating a buy-and-build path, push for a clear target profile, a tight integration timeline, and measurable milestones that connect to multiple arbitrage, cost synergies, and cross-sell opportunities.

Practical notes for deal teams

Practical notes for deal teams: map the platform’s core capabilities and client base first, identify adjacencies that truly extend value, and test integration assumptions against real data from at least two add-ons before committing. Track EBITDA multiples for add-ons versus the platform to inform discipline around pay-up thresholds.

Use the 23.5% QoQ uplift benchmark as a reference point, but validate it against your sector and the platform’s margin structure. For market context, review H2 deals and capital flows in 2025-2026 across PE leaders like TA Associates, Insight Partners, Genstar, Vista, and Thoma Bravo to calibrate expectations.

Author’s perspective and next steps

Author’s perspective: I have seen this play out across financial services, software, and professional services. The math works when the focus stays on integration discipline and a clear path to revenue growth through cross-sell and expanded service lines. If you want to dive deeper, study how add-ons are priced and structured in platform investments, and monitor how Q3 2025 metrics translate to deal economics in your sector.

For more on terms and practical guidance, keep reading Matactic’s glossary. Sign up for our free M&A course to sharpen your playbook. Peace out. I’m reel.