The buy-and-build strategy is once again top of mind in lower middle market private equity—but this time, it’s not just about aggregation. It’s about integration—synergies.
At Falcon Capital, we’re seeing renewed enthusiasm for roll-up plays in highly fragmented tech and services segments. But today’s sponsors and strategic buyers are more disciplined than ever. They want proof that acquisitions lead to operating leverage—not just top-line expansion.
Several subsectors are drawing increasing attention due to fragmentation, recurring revenue potential, and the ability to integrate services under a common platform. Chief among them:
Mobility Management Services (MMS): Enterprises are struggling to manage remote device fleets at scale. Buyers are actively seeking firms that offer mobile lifecycle management, policy enforcement, and spend optimization.
Telecom/Technology Expense Management (TEM): TEM providers with strong recurring revenue and sticky enterprise relationships are ideal targets for roll-up strategies, particularly where legacy providers can be modernized under a unified platform.
Managed Service Providers (MSPs): The MSP market remains highly fragmented, with wide variability in maturity and margins. PE firms are eyeing regional or niche-focused MSPs to build platforms that can scale cybersecurity, cloud infrastructure, and helpdesk solutions efficiently.
Systems Integrators and Resellers: Particularly in ERP, cloud, and infrastructure services, this is one of the most fragmented ecosystems in tech. Buyers are consolidating niche integrators to create scale, enhance vendor leverage, and drive services standardization.
According to McKinsey and Bain, the traditional roll-up model has evolved. Buyers now expect:
Defined platform/tuck-in roles: The platform must bring scalable systems, a professional team, and integration muscle. Tuck-ins must deliver either EBITDA accretion, vertical industry (or geographic) access, or proprietary tech/IP.
Operating leverage from day one: It’s not about “growth by volume” anymore. PE firms are underwriting synergy plans during diligence—SG&A reduction, unified pricing, and cross-sell efficiency.
Integration playbooks: Successful buyers come with a 100-day plan, cultural alignment strategy, and process standardization frameworks. Hope is not a strategy.
If you’re a potential platform: Show that your back office, sales engine, and leadership team can absorb and scale. Demonstrate that you’ve executed at least one successful acquisition—or that you’re acquisition-ready.
If you’re a great tuck-in: Position your firm as a logical extension of a larger platform—strong IP that fills out a product line and fulfills a need in the customer base; complementary geographies, sectors, or functional areas. Highlight where your margins and cash flow will be immediately accretive and how integration will unlock value.
Buy-and-build is no longer a game of quantity. It’s a strategy that rewards precision, repeatability, and integration capability.
For founders in MMS, TEM, MSPs, or the systems integrator/reseller ecosystem, the window is open. Some firms won’t make the cut—and the opportunity won’t last forever. Now is the time to prepare and improve. It’s time to define your role in the next platform and prepare to execute.