Buy and Build Private Equity: What the Strategy Actually Looks Like From the Inside
Written By: Ryan Morrison
Listen On: YouTube | Spotify | Apple Podcasts
2026 Asset Allocation Report
See how 230+ HNW investors with an average net worth of $17M are allocating across public equities, private markets and alternative assets.
Most of what gets written about private equity focuses on the investor side — how firms raise capital, source deals, and generate returns for LPs. The operator's view is harder to find, and it tends to contradict the assumptions executives bring when they first consider making the move. The buy and build private equity strategy, in particular, looks different from the operating chair than it does in a Bain research report.
Marc Boreham spent 20 years at Agilent Technologies, ultimately running a global aftermarket service business with a billion-dollar-plus P&L, before leaving to lead a PE-backed life science and healthcare services rollup. He has completed one sponsor-to-sponsor exit and is currently working toward a second. In a conversation with the Navigating Wealth podcast, he offers a candid account of what the strategy actually demands from the people running it — and why some of the most persistent assumptions about private equity dissolve on contact with the lived experience.
TL;DR
The buy and build strategy creates value primarily through EBITDA multiple arbitrage — buying smaller companies at 6-7x and combining them into a platform that commands 15-16x at exit. But the structural gain disappears instantly if integration is poorly executed.
PE firms do not manage short-term. The five-year exit arc actually demands longer-horizon planning than a 12-week public company earnings cycle. Clean-up work happens early so the final three years of financials are diligence-ready.
The decision to leave a Fortune 500 role for a PE-backed operating position is less risky than it feels — but the compensation tradeoff is real. Cash typically runs behind a public company equivalent while equity carry represents the full thesis.
Sponsor selection matters as much as the operating role itself. Two PE firms can produce dramatically different working experiences for the same executive.
Management team continuity is central to how a buyer underwrites the next exit. If you are not willing to roll equity into the new vehicle, you are signaling low conviction in what you built.
Table of Contents
What the Buy and Build Strategy Actually Is — and Why It Works
The structural logic of the buy and build strategy is straightforward: acquire a platform company at a lower EBITDA multiple, add smaller businesses at even lower multiples, and exit the combined entity at the higher valuation a larger business commands. The gap between entry and exit multiple — what practitioners call multiple arbitrage — creates value before a single operational improvement is made.
Marc Boreham describes it plainly: "You're buying businesses at a much lower multiple than your value as a large company. You're buying companies at 6x, 7x, as soon as you own it, it's worth 15, 16x. So theoretically, as long as you don't destroy the value once you bought it for a crappy integration, you're gonna do deals all day."
The math holds across the market. Add-on acquisitions represented more than 76% of all PE-backed buyouts through early 2024, a figure that has held remarkably steady as PE firms lean harder on consolidation strategies in an environment where leverage alone no longer drives returns. The multiple gap between deal sizes remains significant: median EV/EBITDA for buyouts over $1 billion reached 15.5x in 2024, compared with less than 10x for deals below $100 million, per PitchBook data.
What the math does not capture is how quickly the structural gain evaporates when integration fails. The value created at close is theoretical. It becomes real only when the acquired business runs as part of the platform without losing the customers, employees, or operational quality that made it worth buying.
The Platform Company's Job in a Rollup
The platform is not just the first acquisition in a sequence. It is the infrastructure through which every subsequent deal is absorbed. Its financial reporting systems, management bandwidth, sales channels, and back-office functions determine how many add-ons can be executed and at what pace. A platform that requires significant remediation before it can absorb acquisitions is a drag on the entire thesis.
Boreham's experience illustrates this directly. When he joined his current company, there was no meaningful outbound sales channel — the business was essentially waiting for the phone to ring. Before the rollup could accelerate, the platform needed a functional sales organization. "You can only grow so large waiting for the phone to ring," he notes. "At some point you have to go start knocking down doors."
Integration Is Where Value Gets Destroyed
If multiple arbitrage explains why PE firms pursue buy and build strategies at scale, integration discipline explains why most of the value either survives or disappears. The firms that execute this well treat integration as a muscle — something that improves with repetition, not a project that each deal team figures out from scratch.
"If you're one deal a year, every deal you do is going to have different people working on it," Boreham explains. "If you're doing one deal a month, you're going to have the same crew working on the deals the whole time, and you basically just — over time, hopefully you stop making mistakes more than once."
The failure mode he has observed most often in corporate M&A — and actively works to avoid in his own deals — is destroying what he calls the "secret sauce" of the acquired business. Large acquirers often move so quickly to impose their own systems and processes that they eliminate the specific thing that made the target worth buying. Understanding why customers were buying from the acquired company, and why employees chose to work there, is not a soft consideration. It is the most important diligence question in integration planning.
Beyond Wealth Newsletter
How HNW founders and executives navigate the questions wealth creates — grounded in peer data and Long Angle community discussions. Free, delivered every Thursday.
PE Governance vs. Public Company Management — What Actually Changes
The dominant narrative about private equity is that it demands short-term thinking — cut costs, maximize near-term cash flow, exit before consequences arrive. Boreham's experience runs in the opposite direction, and his explanation for why is specific enough to be useful.
A public company reporting to the street every 12 weeks creates a particular set of behaviors. Decisions get made not because they are right for the business over a five-year horizon, but because they need to be defensible on the next earnings call. "I'll tell you, I actually think there's nothing worse than a public company that's reporting to the street every 12 weeks," he says. "That cadence and the behavior it drives — exhausted."
A PE-backed company does not have quarterly earnings to manage. It has a five-year plan organized around a single exit event. That structural difference turns out to have a meaningful implication for how long-range decisions actually get made.
The Five-Year Plan and Why the Last Three Years Are the Most Important
The five-year horizon is not just a planning convention — it is the mechanism through which PE firms create the conditions for a successful exit. Buyers conducting diligence on a PE-backed company will examine the most recent three years of financial performance. That means the first two years of a hold period are, in effect, the time to do the work that would look ugly in a diligence process: integration cleanup, organizational restructuring, one-time investments, systems overhauls. Everything that produces a charge or a drag on near-term EBITDA but improves the underlying quality of the business.
"What's critical, for example, is you really want, when you go to exit, three years of nice, really clean financial," Boreham explains. "So if you're going to do the up-list stuff, the clean-up stuff, you want to do that early — get that out of the way — first two years, right? Because who's going to diligence the last three."
This is essentially the inverse of quarterly earnings management. Instead of smoothing results for the next 90 days, the PE model concentrates painful decisions at the front of the holding period so the exit window reflects the business at its best.
Picking Your Sponsor Matters More Than Picking Your Strategy
Not all PE firms create the same working environment. Boreham is emphatic on this point, drawing on experience with two sponsors whose operating styles he describes as dramatically different. His current California-based ownership group he characterizes as among the smartest people he has worked with and highly supportive of management decisions. His previous sponsor relationship was considerably different.
"Pick your partners carefully, pick who you choose to work for carefully," he advises. "Some of them are buying, and I think the ones that get famous are the ones that are frankly buying distressed assets and then trying to turn them around. Most private equity firms, at least in my experience, are looking to buy good assets and make them better."
What PE firms are not, in his experience, is operators. They are not in the portfolio company's daily operations, asking detailed questions about execution. They bring pattern recognition across their portfolio — "this other portfolio company of ours does this really well, let me introduce you to them" — and they are deeply engaged at the transaction level. But the operating autonomy for a PE-backed president is meaningfully greater than what a VP-level executive at a large public company typically experiences.
The Career Move From Fortune 500 to PE-Backed Operator
There is a window in an executive's career when the move into a PE-backed operating role makes particular sense. Too early and you lack the P&L track record that makes you recruitable. Too late and the energy and appetite for building aggressively under a compressed timeline may have shifted. Boreham's read on his own timing — early 40s, 20 years into a public company career, running a billion-dollar P&L — maps to what he observes in the current market.
"There's so much money in private equity right now. One thing they're actually short of — two things — they're short of good companies to buy, and two, they're short of good people to run them," he observes. "If you are running a decent sized P&L at a public company, if it's something you're interested in to do, you connect with the right people, there's certainly opportunities to move into private equity."
The decision calculus he used was not primarily financial. It was the "what if" test — the recognition that not trying would produce a lasting regret that trying and failing would not. "I felt if I didn't do it, I would always look back at that decision and potentially have something, the what if moment," he says. What gave him the confidence to act was the belief that the door was not permanently closed in either direction. If it failed, he could likely find a comparable role at another large company. The risk was asymmetric in his favor.
The reversibility framing is worth examining carefully, because it applies more broadly than career decisions. Boreham uses a similar test inside the company when evaluating risk: "What's our risk tolerance in the business? Let's just try it. We're not walking through a door we can't walk back through. Let's just go try it."
How Compensation Works in a PE-Backed Role
The financial structure of a PE-backed executive role is not a straight upgrade from a public company position. It is a different bet. Boreham is candid about what he would have negotiated differently the first time.
Equity packages vary by role. His understanding is that CFO-level positions typically carry around 1% of the company, with the CEO proportionally higher depending on the size and structure of the deal. The ongoing compensation — base salary and any bonus equivalent — often runs behind a public company VP-level package in the early years. Boreham's own cash and RSU equivalent went backward initially. Over a five-year horizon, with a successful exit, total compensation can be significantly higher. Without a successful exit, you may have traded five years of public company comp for a smaller payout.
"You're probably trading for most of us guaranteed annual stock, RSUs, pay for some much larger payout potentially, maybe, down the road," he notes. "So you're adding a bunch more financial risk."
His portfolio segmentation reflects this directly. The 60/40 bond-heavy layer he maintains — Colorado municipal bonds, government bonds — is not intellectual conviction about fixed income as an asset class. It is a hedge against the concentrated financial risk in his primary wealth engine.
What PE Firms Look for When Recruiting Executives
The profile Boreham describes is specific. PE firms are not primarily recruiting credentials or tenure. They are recruiting demonstrated impact on a P&L.
"You have to be running a decent sized P&L. You have to have had a few years of track record of you've affected that P&L — whether it's top line or bottom line, or ideally both. You have to have that."
Beyond the track record, the cultural fit question matters as much as the resume. PE-backed operating roles require a different kind of energy than running a division inside a large matrix organization. The decision-making autonomy is greater, the external constraints are fewer, and the pressure to build is constant. Executives who have become comfortable with consensus-driven large organizations — where the challenge is aligning stakeholders rather than making decisions — tend to find the adjustment more difficult than they anticipated.
Making career and portfolio decisions without peer context?
Long Angle members compare notes on exactly these transitions — executives who have moved from public company roles into PE-backed operating positions, and investors evaluating PE from the outside. Trusted Circles puts those conversations in a structured, confidential setting with 6-8 peers matched to your wealth stage.
Selling the Future at Exit — What the Next Sponsor Is Actually Buying
The common critique of the sponsor-to-sponsor PE model — that the music will eventually stop, leaving the last buyer holding a fully extracted asset — misunderstands what a well-run PE exit actually looks like. A business that has exhausted its growth vectors is worth less at exit, and sophisticated buyers know it. The next sponsor is not buying the historical EBITDA. It is buying the next five years of growth.
"When we turn to the next buyer, they're going to want a 2.5x return on that business as well," Boreham explains. "So you can't just present the story of how well the car has been running. You have to present the story for the future — hey, we're here today, here's how we see us doubling the business again over the next five years."
For Boreham's company, those growth vectors are concrete. The business is heavily US-focused in life science and healthcare services — two end markets with structural demand and limited geographic saturation. European expansion, adjacent end markets, and continued inorganic consolidation in a still-fragmented sector all represent credible paths to another 2.5x. "As long as you continue to have top line opportunity in the markets and geographies you're choosing to play in, or new ones to expand into, the value creation can continue," he argues.
The Sponsor-to-Sponsor Exit From the Executive's Chair
The exit is not purely a financial transaction for the management team. It is a decision point about personal wealth, future commitment, and succession. PE sponsors expect management to roll a meaningful portion of their exit proceeds into the new vehicle. The alignment logic is clean: if you believe in the business's growth story, you should be willing to hold equity in it under new ownership.
The complication is that rolling equity means concentrating a significant portion of your net worth into a private, illiquid asset you have less direct control over as an executive than you did before. Boreham knows people who have exited and found themselves holding a large position in a company they no longer run, with limited visibility into performance.
His approach to this is transparency. If he decides he does not want to continue as president under the next sponsor, the goal is to make that legible well before exit — and to make the succession case convincingly. "If I don't want to go again, the company's going to be way better without me," he says. "Here's your person, right? You don't actually need me. They're going to be great."
The management team signal at exit is, in his framing, as important as the financial story. A business whose leadership is visibly committed to the next chapter is worth more than an identical business whose management team is quietly heading for the door.
Frequently Asked Questions
What is the buy and build strategy in private equity?
The buy and build strategy involves acquiring a platform company at a baseline EBITDA multiple and then adding smaller, complementary businesses at even lower multiples to create a larger, more valuable combined entity. The combined platform commands a higher valuation multiple at exit than any of the individual components would on a standalone basis — a mechanism known as multiple arbitrage. Nearly three-quarters of all PE-backed buyouts in North America now involve some form of add-on acquisition activity.
How does EBITDA multiple arbitrage work in a PE rollup?
Smaller companies typically trade at lower EBITDA multiples than larger ones because they carry more concentration risk, limited management depth, and less predictable cash flow. A PE firm that acquires a platform company at 10-12x and adds smaller businesses at 6-7x blends down the effective entry cost. When the combined entity is sold at the multiple a larger, more established business commands — 15x or higher in some sectors — the difference between the blended entry multiple and the exit multiple flows directly to equity holders. This structural gain exists before any EBITDA improvement occurs.
What does it actually look like to run a PE-backed company compared to a public company?
The most significant practical difference is the absence of a quarterly reporting cadence. PE-backed executives organize decisions around a five-year exit arc rather than 90-day earnings cycles. This actually creates more room for longer-horizon investments and operational restructuring — the difficult work gets done early, when it will not appear in the three years of financials a future buyer will examine. The tradeoff is that the pressure to execute is just as intense, and the consequences of missing the exit timeline are more direct.
When does it make sense for a senior executive to leave a public company for a PE-backed role?
The natural window is late 30s to early 40s — enough P&L track record to be credibly recruitable, and enough career runway and energy to operate aggressively under a compressed build timeline. The most important reframe is reversibility: the move is not permanently closing a door. A VP or GM at a large public company who tries a PE-backed operating role and finds it is not the right fit can generally find a comparable corporate position. The risk runs more in the other direction — not trying and spending years wondering what the outcome would have been.
How does executive compensation work in a PE-backed role?
Base compensation and annual incentives typically run behind the public company equivalent at the senior VP level during the early years of a hold period. The equity package — structured as management equity or carry — represents the full upside thesis over a five-year horizon. A CFO-level position in a PE-backed company commonly carries around 1% equity ownership; the CEO holds proportionally more depending on deal structure. The bet is that total compensation over five years — including the equity realization at exit — significantly exceeds what the same executive would have earned staying on a public company salary trajectory. Without a successful exit, it may not.
What percentage of PE buyouts use add-on acquisitions?
Add-on acquisitions represented more than 76% of all PE-backed buyouts in the United States through early 2024, according to Goodwin Law research. This figure has remained near historic highs as PE firms have shifted toward consolidation strategies that do not depend on leverage expansion or market multiple growth to generate returns. The buy and build approach now accounts for the majority of middle-market PE activity across most industry sectors.
What do PE firms look for when recruiting portfolio company executives?
PE firms recruiting operating executives are primarily looking for demonstrated impact on a P&L — evidence that a candidate has moved top-line revenue, improved margin, or both, in a business of meaningful scale. Credentials and tenure matter less than a track record of execution. The cultural fit question matters equally: PE-backed operating roles require the willingness and energy to make decisions quickly and build aggressively without the organizational infrastructure and consensus processes that large public companies provide.
Final Thoughts
The assumptions most executives bring to private equity — that it is extractive, short-term, and financially engineered at the expense of operational reality — tend to be most accurate about the firms that end up in the news for the wrong reasons. The firms Boreham describes are doing something different: buying good businesses, improving them operationally, building out their market presence, and selling the growth story as credibly as they sell the historical track record.
What the model actually demands is execution discipline that most organizations find difficult to sustain — not because the strategy is complicated, but because the strategy is not the hard part. "The strategy is not the secret," Boreham says. "Go do it if you can. It's the execution that's tough." That gap between the theory of buy and build and the practice of doing it at volume, across dozens of acquisitions, in multiple management cycles, is where the real differentiation lives.
The decisions that come with an executive role in a PE-backed company — how to structure compensation, when to make the move, how to think about carry and personal wealth concentration — are not well served by generic financial advice.
They are the kinds of decisions that benefit most from peer context: people who have been in a comparable position, made the tradeoffs, and can share what the outcome actually looked like.
Long Angle members navigating business exits, career transitions, and private market decisions compare notes on exactly these questions — in a non-solicitation environment where no one in the room benefits from your decision. If the questions this conversation raised are ones you are working through, the community is built for this stage.
