Buy-and-Build: How to grow through acquisition and multiply your company’s value

Why Spain is an ideal market for buy-and-build

The Spanish M&A market has matured toward an environment of strategic discipline and operational value creation, leaving behind models built on aggressive leverage and inflated entry multiples. Following the monetary tightening cycle, the stabilisation of ECB rates and moderating inflation have restored predictability for institutional and corporate investors.

Against that backdrop, Spain is growing above the eurozone average, yet its corporate fabric carries a decisive structural feature: extreme fragmentation across most of its sectors. There are thousands of mid-sized family-owned SMEs with no clear market leader, often struggling to digitalise, internationalise or access optimal financing. That fragmentation is precisely the raw material of buy-and-build.

The natural arena is the middle market—deals with an enterprise value of between €10 million and €100 million—where consolidation through a platform company allows the group to optimise fixed costs, strengthen bargaining power with suppliers, retain technical talent and build recurring-revenue service offerings.

What exactly is a buy-and-build strategy?

A buy-and-build starts with a platform (the first company acquired, or the group’s holding entity) onto which so-called bolt-on acquisitions (“add-ons”) are integrated, one after another. The goal is not merely to add revenue, but to integrate those companies under a single management team, systems and governance, so that the resulting group is worth more than the arithmetic sum of its parts.

Organic growth vs. buy-and-build. Organic growth is cheaper and less risky, but slow. Buy-and-build is faster and delivers critical mass at once, in exchange for higher execution risk and financing needs. The most robust strategies combine both: growing through acquisition while organically improving the integrated companies in parallel.

Multiple arbitrage: the financial engine of buy-and-build

This is the strategy’s most distinctive effect. Smaller companies are acquired at a low EBITDA multiple, because the market perceives greater risk, less diversification and strong founder dependence in them. As the group grows and professionalises, that perceived risk falls and the group comes to be valued at a higher multiple. The gap between the multiple paid on acquisition and the multiple applied to the consolidated group is

multiple arbitrage: value creation that does not require improving the business, only aggregating it and re-rating it to the platform’s corporate multiple.

In the Iberian market, smaller add-ons are typically acquired at multiples of 4.0x to 6.0x EBITDA, whereas consolidated, institutional-scale platforms can target exit multiples of 8.0x to 12.0x EBITDA. That spread is what generates immediate returns for shareholders, even before any synergies materialise. The example below illustrates the point:

Illustrative example. A platform with €5M of EBITDA absorbs four add-ons of €1M each, acquired at 5.0x. Re-rating the combined group to 10.0x creates €30M through arbitrage alone; with 15% synergies, value created rises to €43.5M. Figures are indicative.

The logic is worth underlining: with €60M invested (€40M in the platform and €20M in add-ons), the group reaches an enterprise value of €90M without changing the business, and €103.5M if operating efficiencies are also captured. That is the appeal that explains the model’s popularity.

Other value-creation levers

Operating synergies and economies of scale

Integration under a single structure removes duplication and improves efficiency through several levers:

• Procurement: greater bargaining power with suppliers by concentrating volume.
• Overhead: shared services across administration, finance, IT, legal and HR.
• Commercial: cross-selling across the client portfolios of each company.
• Operations: optimisation of production, logistics and installed capacity.

Better access to, and lower cost of, financing

A larger, diversified group with recurring cash flow accesses financing on better terms: larger facilities, lower cost of capital and more flexible debt structures. Stand-alone SMEs, by contrast, face limits owing to their smaller size and higher perceived risk.

Greater appeal to private equity and investors

Many funds only invest above a certain EBITDA threshold—a level a stand-alone SME rarely reaches. By consolidating several companies, the group clears that threshold and becomes an investable asset, widening the universe of potential buyers and investors and lifting its exit valuation.

How transactions are structured: Allocating risk

Buying well is not just about getting the price right: it is about designing a structure that balances the platform’s financial flexibility against the risks of each acquisition. Current Spanish practice is dominated by mechanisms that defer part of the price and tie in the key teams. These are the most common:

Indicative frequencies in the Spanish middle market (2025–2026).

The phases of a buy-and-build: from thesis to exit

Success depends not on buying many companies, but on buying the right ones and integrating them well. The cycle typically unfolds across five phases:

1. Sector thesis. Confirm the sector fits: stable or counter-cyclical demand, high fragmentation, barriers that scale can overcome and quantifiable synergies. This is where the preliminary synergy map is drawn.
2. Platform acquisition. Select the anchor company (often >€20M of revenue in the Spanish middle market), with professional management, a scalable ERP and sound financials. It should not need a deep restructuring: it must be the group’s engine.
3. Add-on execution. Build a pipeline of targets by geographic, product or client complementarity, and execute quickly with standardised documentation, respecting the leverage limits set in the thesis.
4. Integration (PMI). The critical phase: unify systems (ERP, billing, accounting), centralise shared services and—above all—carefully manage culture and the retention of key talent.
5. Present the group as a unified sector leader and maximise value through competitive processes (auctions) that attract larger funds or international trade buyers willing to pay strategic premiums.

Real cases in Spain

The model’s viability is best appreciated through recent Iberian examples, where aggregation turned regional operators into European-scale leaders.

Grupo Solitium: consolidating IT and office services

Founded in 2005 as a local print and office-solutions distributor, Solitium attracted the interest of Spanish PE manager ProA Capital, which took a majority stake in 2019. The thesis: a highly fragmented distribution market and growing demand from SMEs for cybersecurity, cloud and digital-transformation services.

Under ProA, Solitium completed more than 40 bolt-on acquisitions across the Iberian Peninsula, with three main levers:

• Centralised technical support: a unified network of more than 600 engineers under a centralised help desk, lowering cost per device.
• Portfolio evolution: from office hardware toward high-value managed IT services (cloud, cybersecurity, document management, 3D printing).
• Cross-selling: introducing the new portfolio across a historical base of nearly 50,000 SME clients.

The result: tripling its size in six years, surpassing 1,400 employees and reaching €264M of revenue in 2024 (with a forecast of ~€285M in 2025). In October 2025, ProA exited through a sale to French industrial group Koesio, in a transaction valued at more than €250M—a textbook example of how a buy-and-build creates an institutional-scale asset attractive to a cross-border strategic buyer.

Proclinic Group: consolidating European dental distribution

In 2021, Miura Partners acquired Proclinic—a distributor of dental consumables and equipment—with the thesis of turning a national leader into a European champion. The sector offered ideal conditions: high purchase recurrence, resilience through the cycle and a highly fragmented distribution landscape across France, Italy and the Benelux.

Through the platform, Miura executed selective cross-border acquisitions:

• Exotec Dentaire (France, 2022): direct access to the French market and the ability to integrate margins through private-label brands.
• VS Dental (Italy, 2024): ~€20M of additional revenue and a new warehouse delivering 24/48h service across the alpine region.
• Dentalair (Netherlands, 2024): expansion into the Benelux, western Germany and Scandinavian markets.

In parallel, Miura launched a unified e-commerce platform and shifted toward a digital multichannel model. The plan met its targets ahead of schedule, enabling an April 2024 recapitalisation of more than €200M through a single-asset continuation fund, co-led by Keyhaven Capital Partners and backed by NORD Holding, to finance the next phase of pan-European expansion.

Two buy-and-builds led by Spanish private equity, with very different exit routes.

Risks and warning signs

Buy-and-build is demanding to execute. Bringing several structures together at speed creates pressures that, if poorly managed, erode margins and destroy value. These are the main risks and how to mitigate them:

Integration indigestion (PMI)

• Warning signs: ERP unification delayed by more than 6 months, client attrition at the add-on, persistent duplication of support roles.
• Mitigation: set up an Integration Management Office (PMO) with its own budget, make each deal conditional on a technical IT audit before closing, and migrate data in phases.

Loss of critical human capital

• Warning signs: departure of founders or key staff in the first year, deteriorating morale and falling commercial productivity.
• Mitigation: retention and variable-pay clauses over three years, incentive plans (phantom shares or holding-company equity) and transparent communication of any rebranding.

Financial strain from over-leverage

• Warning signs: leverage (Net Debt / EBITDA) above 4.0x, declining free cash flow and dependence on short-term bank lines.
• Mitigation: balanced capital structures, financing add-ons preferably from group cash flow, and stress tests for revenue declines and rate rises.

Synergies that fail to materialise

• Warning signs: consolidated EBITDA margin below the historical average, failed cross-selling and eroding bargaining power.
• Mitigation: model synergies conservatively, assign clear owners to each synergy line, and audit variances month by month.

Distraction from the core business

• Warning signs: a stall in the platform’s organic growth and a management team saturated by M&A processes.
• Mitigation: separate the corporate-development team from operational management and keep incentives tied to organic performance.

Recommendations for management

1. Platform scalability first. Do not begin the acquisition programme until the anchor company has the ERP, management control, governance and leadership capacity to integrate concurrent deals.
2. Integrate with repeatable playbooks. Standardise and document the unification of brands, systems, billing and HR to reduce improvisation and accelerate synergy capture from the first month.
3. Align local teams. Use management rollover and earn-outs to retain founders and key managers and protect relationships with legacy clients.
4. Financial discipline. Keep add-on entry multiples below the platform’s multiple and preserve leverage headroom against adverse scenarios.

Conclusion: buy-and-build rewards discipline, not haste

Buy-and-build is one of the most effective strategies for growing quickly and consolidating fragmented sectors. Its ability to generate synergies, improve profitability and capture multiple arbitrage makes it a central tool in M&A and private equity. Executed well, it turns a collection of SMEs into a more profitable, more financeable and far more valuable group, as cases such as Solitium and Proclinic demonstrate.

Its success, however, depends not on buying many companies, but on buying the right ones, structuring each deal soundly and integrating them methodically. The difference between creating and destroying value almost always lies in discipline: keeping entry multiples low, preserving financial headroom and executing integration to a repeatable plan. It is a multi-year undertaking that demands rigour at every phase, from the sector thesis to the exit.

And that is precisely where the support of an independent financial adviser makes the difference.

How Maraz Corporate Finance can help

At Maraz Corporate Finance we advise entrepreneurs, family offices and funds on M&A transactions in the Spanish middle market. Whether you are considering a growth-by-acquisition strategy—or you are the one receiving an offer from a consolidating group—we support you across the entire journey:

• Defining the thesis and sourcing targets within your M&A transaction process.
• Company and group valuation, to set reasonable multiples and protect the arbitrage.
• Financial due diligence on each add-on, to avoid surprises after closing.
• Structuring the financing of the acquisition programme, keeping leverage prudent.
• Supporting the group’s financial management during integration as an outsourced CFO.

FAQs

What is the difference between traditional M&A and a buy-and-build strategy?

Traditional M&A tends to involve opportunistic, stand-alone acquisitions. Buy-and-build is a systematic, long-term sector-consolidation plan: it starts from a solid platform onto which multiple sequential add-ons are integrated, unifying processes and maximising exit value through multiple arbitrage and economies of scale.

Why does multiple arbitrage create so much value?

Because small SMEs are bought at low multiples (typically 4.0x–6.0x EBITDA) owing to their higher risk and founder dependence. Once integrated into a larger, diversified and professionalised platform, perceived risk falls and the group is valued at a premium multiple (8.0x–12.0x), applied to the combined EBITDA.

Why is the founder asked to reinvest (rollover)?

Reinvestment (usually 10%–30% of the price) aligns interests over the long term: it turns the former owner into a group shareholder and incentivises them to support integration, retain clients and execute cross-selling.

Which contractual mechanisms are most common in Spain?

Earn-outs (~60% of deals), locked-box (39% versus 30% for completion accounts) and warranty & indemnity (W&I) insurance (~36% of PE deals).

What warning signs argue against an acquisition?

Severe cultural mismatches or incompatible ERPs, absolute founder dependence without lock-up or earn-out, consolidated leverage above 4.0x and a weak anchor platform lacking the infrastructure to absorb integration.

Javier de Rojas Roca de Togores

Partner – Maraz Corporate Finance