Could You Do What Private Equity Does? Acquire Then Exit?

Private equity (PE) is not sitting still. Last year, 80% of Australian PE exits involved strategic acquirers or secondary PE buyers. Add-on transactions grew by more than 100% year on year by value, as sponsors pursued smaller bolt-on acquisitions to build scale and enhance operational leverage. The buyers who will compete to acquire your business are already running a specific playbook, and the question is, as a business owner and executive, could you as a business owner deliver some of the value creation yourself.

What Is a Buy-and-Build Strategy?

The model starts with a solid platform business, then uses targeted acquisitions to build scale faster than organic growth alone. Value drivers include local market density, new geographic coverage, complementary capability, and the multiple expansion that comes from becoming a larger, more strategic asset at exit.

This works best in fragmented Australian sectors including healthcare services, IT managed services, commercial cleaning, trades and maintenance, distribution, and aged care. Combining smaller operators creates a business worth materially more than the sum of its parts.

A business earning $2 million EBITDA might trade at 4x. One earning $8 million EBITDA, built through organic growth and smart acquisitions, often trades at 6x to 8x. That multiple expansion on a larger earnings base is where real wealth is created.

Why Now?

68% of PE investors are optimistic about exit potential over the next three years, with 95% identifying value creation as the core of their investment strategies. Competition for quality assets is intensifying. There is also a tax dimension worth understanding. From 1 July 2027, the flat 50% CGT discount is replaced by cost base indexation and a new 30% minimum tax on real gains. Value built before that date keeps the existing 50% discount treatment, no matter when you sell in the future. Small business CGT concessions are explicitly retained, and the 50% active asset reduction threshold rises to $10 million from 2027. For owners planning an exit, the timing of value realisation is a conversation worth having now.

Is This Right for You?

This strategy works best when several conditions are met. Shareholders and leadership must be genuinely aligned on risk, investment horizons, and legacy goals, particularly in family businesses where differing views can easily derail progress if left unresolved.

Your platform needs to be large and stable enough to support bolt-on acquisitions, with capable leadership and sufficient bandwidth to manage due diligence, integration, and core operations at the same time.

Lenders expect meaningful equity contribution, and the funding mix should be agreed before you set a target price. Sector-adjacent acquisitions work best; those in unrelated sectors materially increase execution and integration risk.

Cultural integration consistently proves harder than the financials suggest, and owners who underestimate it often pay for it.

Pros and Cons at a Glance

Five Questions Worth Asking:

1. Have you mapped the businesses in your sector that a PE firm would consider acquiring alongside yours? What would combining with one of them do to your enterprise value?
2. Is your current growth rate fast enough to deliver the exit outcome you want, or do you need a second lever?
3. What would your business look like twice the size in three years, and is that achievable organically, or would a bolt-on get you there faster?
4. Have you spoken with your adviser about how the 2027 CGT changes affect your exit timing and the structure of value realisation?
5. If a PE fund approached you today, would they find a business ready to be a platform, or one that still has work to do on systems, reporting, and leadership depth?

Thinking about growth through acquisition?