The Add-On Advantage: How Smaller Bolt-On Deals Can Dramatically Increase Your Enterprise Value

Hi ,

When most business owners think about acquisitions, their minds go straight to the big, transformative deal—the one that doubles revenue or catapults them into a new market. But some of the most powerful value creation doesn’t come from the headline-grabbing acquisition. It comes from the smaller, often overlooked bolt-on deals.

What’s a Bolt-On Acquisition?

A bolt-on acquisition is when you buy a smaller company and integrate it into your existing platform. These deals may not look flashy on paper, but they can unlock significant strategic and financial value when executed well.

Why Add-Ons Punch Above Their Weight

1. Immediate Revenue and Margin Expansion
Even a modest acquisition can provide a meaningful revenue boost—and because you’re leveraging your existing infrastructure, those new revenues often carry higher margins.

2. Synergies at Scale
Bolt-ons create opportunities for cross-selling, operational efficiencies, and shared overhead. The cost savings and revenue growth from multiple small acquisitions compound quickly.

3. Higher Exit Multiples
Private equity and strategic buyers pay premiums for larger, more diversified businesses. By rolling up smaller companies into your platform, you not only grow earnings—you expand your valuation multiple at exit.

4. Lower Competition
Smaller deals often fly under the radar of private equity firms and large acquirers, making them less competitive and more accessible for owner-operators.

5. Easier to Finance and Integrate
Compared to larger deals, bolt-ons typically require less capital and carry lower execution risk. With a disciplined integration process, you can stack multiple add-ons without overwhelming your business.

Real-World Example

A regional IT services company generating $2M in EBITDA executed three bolt-on acquisitions over 24 months. None of the deals individually moved the needle dramatically—but together, they:

• Expanded service offerings

• Added $1.2M EBITDA

• Increased enterprise value at exit by over $10M, thanks to multiple expansion

The “small” deals proved to be the biggest value creators.

The Takeaway

Don’t underestimate the power of bolt-ons. While they may not dominate headlines, these smaller acquisitions are often the fastest, most effective way to build scale, expand margins, and dramatically increase enterprise value.

If you’re planning acquisitions in 2025, consider not just the big transformative deals—but also the bolt-ons that quietly compound your success.

Reply to this email if you’d like to explore how bolt-on acquisitions could fit into your growth strategy—I’d love to connect.

Matt Bodnar

Deal Boardroom