This article is based on my conversation with Nicholas De Poorter of Strada Partners on the RolyPoly podcast.
Most private equity funds work in one direction. They define a thesis, then go hunting for companies that fit it. Nicholas De Poorter and his colleagues at Strada Partners flipped that on its head.
Nicholas is part of the investment team at Strada, a Belgium-based PE fund running two funds with around fifteen platforms deployed across Europe in business services, tech, and healthcare. He came up through M&A, starting at PwC's deals team before moving into corporate development at two American corporates. So when he talks about how to actually build a group through acquisition, it's from the deal side and from sitting close to the operators doing the building.
What struck me most about the conversation is how much of it is about discipline rather than ambition. Everyone in the roll-up world can recite the dream: buy at 4x, sell at 12x, pocket the spread. Nicholas spent an hour quietly dismantling the parts of that story people get wrong. Here's what I took away.
“We Don't Source Deals. We Source Teams.”
Strada started as a fairly traditional PE fund chasing top-quartile returns. The conclusion they reached was that getting to those returns meant leaning hard on multiple arbitrage, and the cleanest place to find it is buy-and-build in the small-cap space.
The logic is straightforward once you say it out loud. Smaller businesses trade at lower multiples because they carry more risk: key-man dependency, less professionalisation, more volatility. Buy several, bring them together into a larger, better-run platform, and the combined entity warrants a higher multiple than the sum of its parts.
But here's the wrinkle that changed Strada's model. If you want to deploy serious capital into M&A across multiple countries, you can't run all of it from Antwerp. As Nicholas put it, if you're trying to buy small businesses in Italy from Belgium, “good luck.”
So Strada inverted the usual sequence. Instead of sourcing companies, they source teams with a credible thesis, then back them to build the platform. People with skin in the game from day one, who speak the language, live in the market, and already know the targets, advisors, and experts.
“We are more and more a believer of the team being the utmost important piece of the entire strategy.”
It's a genuinely different lens for anyone who's only ever seen the classic PE model. The fund finds the operator; the operator finds the deals. Which means there are two layers of sourcing happening at once, and the quality of the whole thing rests on the people, not the pipeline.
Integration: Decide It Up Front, But Don't Rush It
This is the part of the conversation closest to what we do at PMI Stack, so I pushed on it. There's a huge spectrum of integration, from literally none to full, and Nicholas's view is that most investors fall into a trap: they never decide where on that spectrum they want to land.
No integration is the safe option. You buy comparable businesses, leave them alone, and accept that you won't unlock cross-selling or economies of scale. You might get a small multiple bump from size, but the group doesn't become more profitable or grow faster, so the uplift is limited.
Full integration is where the real value sits, in theory. One unified whole, more synergies, more cash flow, a higher multiple. But moving there fast is, in his words, “super dangerous.” The thing that breaks is culture: integrate too aggressively and people walk.
Strada's answer is a deliberate middle path. They take a light view of integration at the start, never day-one integration, but they decide before the platform even exists which levels of integration make sense at which point.
The obvious first candidate is finance and reporting. Bringing in a CFO or a reporting function that creates more insightful numbers and better decisions is, as Nicholas said, “something that can easily be done without being too disruptive.” That mirrors exactly what we see at PMI Stack: the reporting layer is almost always the safest, highest-leverage place to integrate first, precisely because it doesn't threaten anyone's day-to-day. (I dug into that further in my conversation with Pavleta Pavlova on financial integration.)
The nuance I hadn't fully appreciated before these conversations is that integration isn't a single decision you make at the start. It's a sequence of decisions you make at different stages, and the discipline is in planning that sequence rather than defaulting into it. (Sam Turner made a similar argument from the operator's seat in his episode on hub-and-spoke integration.)
How to Read Multiple Arbitrage (And When Competition Kills It)
I get asked a version of this constantly, so I put it to Nicholas directly: with so many roll-ups chasing the same fragmented markets, how do you know when there's too much competition?
His answer was refreshingly mechanical. Look at the typical entry multiple for your target size, and compare it to the exit multiple for the group you're trying to build.
His worked example: if businesses doing €500k to €2m of EBITDA change hands at around 5x, and a €15m EBITDA group exits at 12 to 15x, you've got your answer. There's real arbitrage to harvest.
But if entry multiples have been creeping up to 10x or more, the maths gets fragile. You can try to convince yourself the exit will be 20x to compensate, but now you're banking on multiple expansion at both ends, which is inherently riskier.
What Strada wants to see is a healthy spread, a 50 to 100% uplift between entry and exit. Below that, it gets tricky, because more buy-and-build money flooding in tends to push entry multiples up over time. He named the obvious live example himself: the wave of accounting roll-ups across Europe and the UK, all chasing the same AI-in-the-back-office thesis, all bidding against each other.
The line that stuck with me came later, when he pushed back on the idea that size alone drives the multiple:
“If you staple together 10 very small businesses and you don't integrate anything, it doesn't make the risk disappear. Each company is just a smaller slice of the whole.”
A multiple is a reflection of future cash flows, which means it's a reflection of growth and profitability, not headcount of entities. Size matters, but it's not the whole story.
Deal Structures: Equity First, Then Optimise
I find it genuinely hard to get good information online about how these deals are actually structured, so I asked him to walk through the typical shape.
Early on, Strada funds the first few acquisitions almost entirely with equity. Two reasons: it lets you move faster, and you get better bank terms once you've already built something sizeable. They wait until the platform hits roughly €2-3m to €5-6m of EBITDA before they start optimising the capital structure.
From there, the target is around 2.5 to 3.5x EBITDA in bank debt, with the remainder funded by equity, a meaningful chunk of which is rollover equity from the founders they're buying.
How much rollover depends on the seller's ongoing role. If the founder is a genuine key person, commercially, operationally, on the people side, you want them locked in for a couple of years to manage the transition. Across Strada's fifteen businesses, founders and operators typically hold somewhere in the 55 to 70% range of the equity, deliberately spread across operationally active people rather than financial investors, because broad skin in the game benefits the whole group. (Ryan Imison made a related point about keeping founders motivated through bolt-on acquisitions and cross-selling.)
Then there are the two structures that do the quiet heavy lifting:
- Vendor loans let you reduce the upfront equity, which is an instant return booster.
- Earnouts bridge valuation gaps when a seller believes growth is about to accelerate. Nicholas's position: happy to pay for it, but “we'd like to see it first before we pay for it.”
The Earnout Trap Nobody Warns You About
The earnout discussion was where the conversation got the most practical, because I've heard the failure mode from other operators and wanted his read on it.
Here's the trap. If you tie an earnout to EBITDA and you're trying to integrate the business, the founder becomes a blockade. Any change that dents short-term margins, they'll resist, because it threatens their payout. The seller you need as an ally turns into an obstacle to the very integration that creates the value.
Nicholas confirmed it directly, and added the mechanism. Imagine you buy a business expecting EBITDA to grow 15%, then immediately hire two expensive executives to drive that growth. That hiring hits EBITDA now, even though the goal is to grow it later.
So his rule is twofold. Keep earnouts short-term, because the further out they run, the more can change and the more there is to argue about. And think carefully about what you link them to, EBITDA, revenue, or gross margin, depending on the sector and the situation. An earnout structured on the wrong metric can quietly sabotage your integration plan before it starts.
Lighthouse Deals vs. Carpet Bombing
On sourcing, Nicholas drew a distinction I really liked between two strategies, and which one you use depends entirely on the market.
In some sectors, the first acquisition does disproportionate work. He gave the example of Bloom, Strada's roll-up of private radiology clinics in Belgium (since rebranded). As a financial investor partnering with general managers rather than doctors, persuading clinicians to sell was hard, doctors are wary of PE.
So the first deal had to be a lighthouse transaction: acquiring one of the largest, most respected practices in the country to send a signal that “these guys are serious.” That single deal opened doors with doctors across the market who'd otherwise have kept their distance.
The opposite approach is carpet bombing, going very broad, very fast, trying to convince as many comparable targets as possible, where no single deal moves the needle. It works when your targets are roughly interchangeable.
Underneath both is the same unglamorous truth: it's a volume game. “You typically need a hundred conversations to do one acquisition,” especially early. And his advice on direct outreach versus M&A advisors was to do both, with the emphasis shifting by country, intermediated markets like the UK make it costly to ignore advisors. (Andrew Ofori went deep on building that pipeline in his episode on proprietary deal sourcing.)
What Investors Actually Want From a Team
Since a lot of RolyPoly listeners are aspiring operators, I asked the question they can't easily get answered: what makes him lean in, and what quietly makes him pass?
The green flags are consistent with everything else he said. A duo, not a solo founder, because building a group is too much work for one person and you want a continuous sparring partner with skin in the game. Full-time commitment, anyone still working another job signals they're not all-in. And a blend of “buy experience” and “build experience”: someone who's run transactions, paired with someone who's actually managed and grown businesses.
Sector experience, he said, is a nice plus but not a must. You'll live and breathe the sector for four to seven years, so you'd better like it and know something about it, but you don't need to have spent your whole career there.
The red flags are where it got pointed. A thesis dreamed up “last week” with no validation. Operators who ask him what a good thesis would be, which tells him they haven't done the work. And two attitudes he has no time for:
“People that make it sound too easy is a bit of a red flag, because that means you potentially don't realise the grind that will follow once you really start it.”
The other is the quick-flip mentality, buy a few businesses, manufacture some arbitrage, sell in two years. “That's not the game we're in,” he said. Strada is building substantial platforms over many years. It's a marathon, not a sprint, and anyone who pitches it as a sprint is telling on themselves.
The Assumptions Teams Reliably Get Wrong
I asked what most often changes between the slide-deck plan and the actual build. He named three, and they're worth tattooing somewhere.
Pace. People overestimate how many deals they can do early. Building an M&A engine that hums takes time. The realistic shape is one deal at the start, then six-plus months to the second, with the gap between deals shrinking as the playbook matures. It's a learning loop, not a linear ramp.
Synergies. Everyone models margin expansion from day one. Reality is a J-curve, things often get less profitable before the synergies show up, and the real gains only land after a couple of years. (This is the same gap Vadim Rogovskiy described from the AI side in his episode on AI in post-merger integration.)
Multiple drift. People assume today's entry multiple holds. But competition and market conditions can push it up, eroding the arbitrage you underwrote. If you're lucky it drifts down, but usually that's because something's gone wrong in the wider market that's hitting your business too.
None of these is exotic. They're just the boring, structural realities that get sanded off an investment memo to make the returns look clean.
Where AI Actually Belongs in a Roll-Up
It wouldn't be a 2026 conversation without the AI question, and Nicholas had one of the more grounded takes I've heard, precisely because he's not an AI evangelist. He buckets it in two.
The first bucket is businesses where AI rewrites the core model, accounting, insurance brokerage, property management. Lots of humans doing manual, automatable work at scale. Here, he believes you genuinely have to innovate or get eaten.
The second bucket is businesses where the core work is untouched but the back office is wide open. His example: an HVAC roll-up. AI isn't installing a unit in a commercial building, but it can absolutely streamline sales, planning, HR, and finance, and these businesses are often less tech-savvy, so the opportunity is large.
What I found most useful was his stance on AI-native roll-ups, the model where you build the software first and then acquire businesses to deploy it into. Strada inverts that order. They buy good businesses first, get to know the markets in depth, then either build or, more often, source the right AI solution to deploy.
“We are no techies, and the people we partner with are no techies either. We'd rather buy a business that makes sense on its own, then find the best solution to layer on.”
It's a deliberate choice not to bet the business on a software thesis in a space moving this fast. AI is a value-creation and efficiency lever, not the core of the model. For a contrast, Sam Hields argued the venture case for going front-office-first, it's a genuinely useful tension to sit with.
He closed on a line that applies to the whole serial-acquirer playbook. Reflecting on the old-school acquirers who've bought and held decentralised businesses for decades, riding cheap debt and low competition, he said simply: “What brings you here won't bring you there.” That era of easy multiple arbitrage isn't fully over, but it's getting harder, and the funds that win next will be the ones finding value-creation levers beyond just stapling companies together.
The Takeaway
If there's one thread running through everything Nicholas said, it's that buy-and-build rewards discipline over enthusiasm. Decide your integration levels before you buy, not in the year before you exit. Demand a real multiple spread instead of hoping the exit bails you out. Structure earnouts short and on the right metric so they don't poison your integration. And treat AI as a lever, not a religion.
But the deepest point is the one Strada built its whole model around: in a roll-up, the deal is rarely the hard part. The team is. Get the right operators with the right experience and genuine skin in the game, and the rest becomes executable. Get the team wrong, and no amount of clever structuring saves it.
