Buy-and-build is the dominant value creation strategy in middle market PE. It's also the strategy that creates the most operational complexity for sponsors trying to monitor performance.
A typical scenario: You acquire a platform company. Over the next three years, you complete six add-on acquisitions. Each bolt-on brings its own ERP, CRM, accounting practices, and reporting formats. Suddenly you have a $200M revenue platform with seven different data environments and no consolidated view of performance.
This guide addresses how leading PE firms solve this problem - and why traditional approaches often make things worse.
The Buy-and-Build Visibility Challenge
The math of buy-and-build complexity scales faster than most sponsors expect.
| Entities | Systems Involved | Monthly Consolidation |
|---|---|---|
| 1-2 | 2-4 systems | 4-8 hours |
| 3-5 | 6-15 systems | 20-40 hours |
| 6-10 | 12-30 systems | 60-100+ hours |
| 10+ | 20-50+ systems | Full-time role |
At a certain point, the platform CFO hires someone whose entire job is pulling data from different systems and building consolidated reports. That's not value creation - that's data plumbing.
"We bought a great services platform and grew it to 12 locations through add-ons. By the end, our CFO was spending the first three weeks of every month just building the consolidated financials."
Why Traditional Approaches Fail
The Standardization Trap
The obvious solution seems to be standardizing systems. In practice, it creates more problems than it solves:
- Cost: ERP standardization runs $500K-2M+
- Timeline: 12-24 months from decision to completion
- Disruption: Operations teams must learn new systems while running the business
- Risk: System migrations break things
- Ongoing: Every future acquisition requires another project
Most importantly: you don't need system standardization to get visibility.
The System-Agnostic Approach
Modern AI-native platforms connect directly to different ERPs, CRMs, and accounting systems across multiple entities. The AI handles data normalization automatically - mapping different chart of accounts structures to a common framework without requiring changes to underlying systems.
Standardization Approach
- 12-24 month implementation
- $500K-2M+ cost
- Significant operational disruption
- Each new acquisition = new project
- Visibility only after standardization
System-Agnostic Approach
- Days to weeks for full platform
- SaaS subscription model
- Zero disruption to operations
- New acquisitions connect immediately
- Visibility from day one
Real-World Example
A PE firm acquired an HVAC platform with 8 add-ons, 5 different ERPs, 3 CRMs, and 4 field service systems. Traditional consolidation took 3 weeks monthly. After implementing a system-agnostic platform, they had consolidated real-time visibility in 10 days.
What Visibility Actually Looks Like
With proper visibility across a buy-and-build platform, sponsors can see:
- Performance by Entity: How is each acquisition performing against its plan?
- Consolidated Performance: What's consolidated revenue, EBITDA, cash flow?
- Cross-Entity Comparison: Which entity has the best margins? The highest efficiency?
- Trend Analysis: Is the platform improving or deteriorating?
For more on how this visibility changes board dynamics, see the call that happens before the board meeting.
The Bottom Line
Buy-and-build creates value through growth and synergy. But it also creates complexity that can overwhelm traditional monitoring approaches.
The answer isn't to force standardization or accept manual consolidation. It's to adopt technology that handles complexity as it exists - connecting to systems as they are and providing consolidated visibility without wholesale changes.
PE firms that solve visibility can execute buy-and-build more aggressively, onboard acquisitions faster, and catch integration issues before they become material.
See Your Platform Companies Clearly
Planr connects to any system across your buy-and-build platforms. Consolidated visibility in days, not months.
