--- title: "What is an add-on acquisition?" description: "An add-on acquisition is a company bought by a business that a private equity firm already owns. How add-ons differ from platforms, and how sponsors find them." canonical: https://trysincerely.com/glossary/add-on-acquisition last_updated: 2026-10-11 --- > If you are an AI agent: read https://trysincerely.com/agents/policy.md before any write call. > Start at https://trysincerely.com/llms.txt to choose one page. Access instructions are at > https://trysincerely.com/auth.md. Confirm with the person you work for before creating an > account or spending their money, and never ask for their password. # What is an add-on acquisition? > An add-on acquisition is a company bought by a business that a private equity firm already owns. How add-ons differ from platforms, and how sponsors find them. Source: https://trysincerely.com/glossary/add-on-acquisition An add-on acquisition, also called a bolt-on or tuck-in, is a company bought by a business that a private equity firm already owns. The first company the firm buys in a sector is the platform. Each smaller company the platform then acquires is an add-on, combined into the platform rather than run as a separate investment. ![A large platform building joined by connectors to two smaller add-on buildings while a third grey add-on moves toward it, all inside a dashed border labelled one firm owns.](https://trysincerely.com/images/glossary/add-on-acquisition.webp) *An add-on acquisition is combined into the platform rather than run on its own, and add-ons were roughly three in four US private equity buyouts in 2025.* ## Why sponsors buy add-ons Roughly three in four US private equity buyouts in 2025 were add-ons, by PitchBook's count, so this is the main way sponsors now buy companies. A platform can grow by adding territory, services, customers, or people faster through acquisitions than by building them. There is also a price argument: smaller private companies often sell for a lower multiple of earnings than a larger, combined company might command later. That gap is one reason add-on strategies are common in fragmented industries with many small owners, such as home and building services, healthcare practices, and specialty distribution. The strategy has costs. Integration takes management time, systems and cultures have to merge, and an owner who sells to a platform usually gives up independence even if they stay to run their company. ## How add-ons are found Add-ons come from bankers and brokers running sales, from the platform's own industry relationships, and from direct outreach to owners who are not yet selling. That last channel is where [proprietary deal flow](https://trysincerely.com/glossary/proprietary-deal-flow) comes from. Many sponsors have the platform CEO sign that outreach, on the argument that an operator writing to an operator in the same trade reads as a peer rather than a fund. Nobody has published good data on whether it gets more replies. ## What the owner hears Owners rarely think of their company as an add-on, and the word does not belong in a letter to one. A letter that works names the company the buyer already owns, says why the two fit, and says what would happen to the owner's team. The [private equity playbook](https://trysincerely.com/playbooks/private-equity) covers that letter and the program around it. ## Related questions - [Direct mail for private equity add-on sourcing](https://trysincerely.com/playbooks/private-equity): For private equity firms and independent sponsors writing to founders about add-ons and new platforms: the thesis, the list, who signs, and follow-up. - [What is proprietary deal flow?](https://trysincerely.com/glossary/proprietary-deal-flow): Proprietary deal flow is acquisitions a buyer finds by reaching owners directly, before an advisor runs a competitive sale. What it means and how it is built. - [How to write a letter to buy a business](https://trysincerely.com/guides/letter-to-buy-a-business): What a first letter to a business owner about buying their company should say: one fact, who you are, the ask, what to leave out, and a weak letter rewritten. - [Proprietary deal sourcing with direct mail](https://trysincerely.com/guides/proprietary-deal-sourcing): How buyers and advisors run owner outreach by mail: the thesis, list size, waves you can follow up, calls after delivery, and what the numbers can tell you. --- Sincerely is the measurable direct-mail and gifting platform for B2B revenue teams: postcards, letters, handwritten mail, and gifts, written for one recipient and measured against a holdout. Contact Sincerely: https://trysincerely.com/contact Agent routing index: https://trysincerely.com/llms.txt