Buy&Build: when acquisitions truly create value

The study premise is a well-known structural issue: the small size of Italian firms. In a competitive arena where growing organically is becoming increasingly difficult, especially during economic slowdowns, acquiring (ideally complementary) companies that are already operating in the market is now a strategic move that can no longer be postponed.

But how effective is this strategy in the Italian context? And more importantly, what factors lead to its success or failure? These are the questions, until now largely unexplored due to a lack of data, that the PE Lab sought to answer with a one-of-a-kind empirical investigation.

Starting from the PE Lab database, which includes 103 funds, 545 platforms, and 1,707 monitored add-ons, the researchers selected only the 149 platforms that were both created and exited. The resulting cluster consisted of 85 platforms managed by 33 funds, all of which had an exit between 2014 and 2024; taken together 227 add-ons were completed.

The resulting dataset is extraordinarily detailed: transaction dates, targets and bidders, equity invested, enterprise value of the platform, entry and exit multiples, and cash-on-cash returns for each deal. This multi-year effort was made possible by close cooperation with industry operators and access to typically confidential information.

The results speak for themselves:

• 81 out of 85 platforms created value, a success rate that confirms the effectiveness of the Buy&Build strategy in generating growth and returns for investors.
• Revenue synergies (64%) outweighed cost synergies, indicating that add-on deals are primarily seen as a means of expanding market reach and offerings, rather than merely rationalizing.
• Integration timelines are getting longer, from an initial average of 2–3 years to 5–6 years today, depending on the number of acquisitions. The process is becoming more complex and requires stronger governance.
• The main challenge is cultural integration, which is often underestimated. Not all operators implement formalized policies in this area, and dedicated integration teams remain the exception rather than the rule.
• Despite the use of management incentive schemes, there is still little focus on communication initiatives, which are key to achieving cultural alignment. Although private equity is ahead of other sectors in this regard, this lack of attention remains one of the main causes of integration difficulties.

Buy&Build logic has also been successfully applied along value chains, as in the case of VAM INVESTMENTS with the Florence Group, a platform that brought together 37 companies developing diverse products in the luxury sector. There, the synergistic collaboration among entrepreneurs proved to be a winning formula. In other words, value is created when the operation is not only financial but also industrial and organizational. Integrating visions, leadership styles, operating systems, and corporate cultures is the real challenge—and the true value multiplier.

For corporate managers, the findings of this study offer two key takeaways. First, external growth, if well planned and supported by a structured integration process, is a powerful lever for helping the Italian economy overcome the disadvantage of too many undersized players and compete on a global scale. Second, success depends not just on how much you acquire, but on how you integrate.