Key Takeaways
- • Add-on acquisitions made up 74.1% of US private equity buyouts by deal count in Q3 2025, according to PitchBook, making the add-on the default PE deal structure.
- • Preqin reported that add-ons accounted for more than half of global private equity deal count in the first half of 2026.
- • McKinsey research found programmatic acquirers earned a median excess total shareholder return of 2.3% a year over the decade to 2022, ahead of other M&A approaches.
- • Roll-ups generate returns through multiple arbitrage, synergies and growth; DealRoom's illustrative model shows $70M of value created on $130M invested, with about $50M from re-rating add-on earnings.
- • Bain distinguishes buy-and-build (platform first, at least four sequential add-ons) from roll-ups, which can buy several targets at once.
Summary
A Forbes article titled "Most Private Equity Buyouts Are Add-Ons. AI Is Targeting The Paperwork" addresses the growing dominance of add-on acquisitions in private equity. The full text could not be retrieved, so this summary draws on the headline and supplemental material covering the same theme; the AI-related angle of the article could not be verified from the available sources.
According to PitchBook, add-on acquisitions accounted for 74.1% of US private equity buyouts by deal count in Q3 2025, against a five-year average of 72%. Preqin reported that add-ons made up more than half of global private equity deal count in the first half of 2026. The add-on is the basic unit of a roll-up strategy, in which a platform buyer acquires and integrates many small companies in a fragmented industry.
McKinsey research over two decades found that programmatic acquirers earned a median excess total shareholder return of 2.3% a year over the decade to 2022, ahead of other M&A approaches and organic growth. Roll-ups create value through multiple arbitrage, in which small, owner-operated businesses sold at lower EBITDA multiples are combined into a scaled platform that commands a higher multiple, as well as through synergies and economies of scale.
Bain defines buy-and-build as a strategy built around a platform company that makes at least four sequential add-on acquisitions, and finds that around 30% of add-on transactions are the platform's fourth or later acquisition. FTI Consulting's 2026 survey of more than 550 PE leaders found 24% ranked M&A as their top value generator, up from 7% a year earlier.
Financing structures for roll-ups typically combine sponsor equity, senior debt, rollover equity, earnouts, seller notes and escrow or representations-and-warranties insurance. According to PitchBook LCD, sponsors contributed 46% equity on US buyouts in 2025, against a ten-year average of 41%. SRS Acquiom data showed 21% of 2025 private-target deals combined cash with a management rollover, and 24% included an earnout.
According to PitchBook, add-on acquisitions accounted for 74.1% of US private equity buyouts by deal count in Q3 2025, against a five-year average of 72%. Preqin reported that add-ons made up more than half of global private equity deal count in the first half of 2026. The add-on is the basic unit of a roll-up strategy, in which a platform buyer acquires and integrates many small companies in a fragmented industry.
McKinsey research over two decades found that programmatic acquirers earned a median excess total shareholder return of 2.3% a year over the decade to 2022, ahead of other M&A approaches and organic growth. Roll-ups create value through multiple arbitrage, in which small, owner-operated businesses sold at lower EBITDA multiples are combined into a scaled platform that commands a higher multiple, as well as through synergies and economies of scale.
Bain defines buy-and-build as a strategy built around a platform company that makes at least four sequential add-on acquisitions, and finds that around 30% of add-on transactions are the platform's fourth or later acquisition. FTI Consulting's 2026 survey of more than 550 PE leaders found 24% ranked M&A as their top value generator, up from 7% a year earlier.
Financing structures for roll-ups typically combine sponsor equity, senior debt, rollover equity, earnouts, seller notes and escrow or representations-and-warranties insurance. According to PitchBook LCD, sponsors contributed 46% equity on US buyouts in 2025, against a ten-year average of 41%. SRS Acquiom data showed 21% of 2025 private-target deals combined cash with a management rollover, and 24% included an earnout.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.