Scaling M&A: 5 keys to an integration-ready platform

Platform businesses have always been a key investment focus for private equity and a proven strategy to grow a business, but as the cost of capital and economic headwinds have increased over the years, so has the importance of this strategy. Over the past 10 years, add-on acquisitions have gone from about half of PE deal volume to over two-thirds in 2024.

Platforms provide a base for scaling quickly, purchasing complementary businesses, via tuck-ins or bolt-ons, and integrating them into an existing platform business. These acquisitions are usually aligned with the platform’s strategy, enhancing its capabilities, market presence, or operational efficiency.

By building a robust platform business with ability to seamlessly bring acquisitions on board, PEs and platform businesses can significantly increase their valuation over time through strategic positioning, revenue synergies, and operational improvements.

And there is every reason to expect this focus on platforms to continue, especially if M&A activity recovers as many predict. However, PE firms, portfolio companies, and corporations looking to scale through multiple M&A transactions sometimes underestimate the difficulty of building a platform business. To succeed, they must address five specific challenges:

1. Developing a clear integration strategy. Many companies were not designed or operated with the goal of absorbing other businesses. Leadership teams often lack a clear integration strategy and may underestimate the complexities involved to align operational systems, harmonize cultures, and capture anticipated synergies.

To address this challenge, companies should develop a detailed playbook that outlines clear goals, timelines, and functional responsibilities, ensuring that every team member understands their role in integrating multiple acquisitions. Adopting a phased approach can further enhance success—companies can prioritize high-impact areas first, such as key revenue drivers or operational systems, and then expand to second-order projects. This structured and adaptable approach not only minimizes disruptions but also accelerates the realization of value from the integration.

2. Managing revenue. Customer retention can be a central concern during a merger, as customers may be uncertain about how it might impact service quality, product offerings, pricing, brand alignment, and other factors. Maintaining a consistent and positive customer experience throughout the integration process is vital to prevent customer churn. Organizations should prioritize customer engagement, clear communication, and a focus on delivering value.

Beyond mitigating potential customer losses, companies should leverage the combined customer base to identify cross-selling and upselling opportunities that can boost revenue synergies, along with training sales teams to effectively promote the full range of products and services. Thorough customer segmentation allows businesses to tailor marketing and sales initiatives to high-value segments, optimizing revenue. Launching integrated marketing campaigns that highlight the expanded offerings can attract new customers while reinforcing loyalty among existing ones. Investing in technology platforms, such as customer relationship management (CRM) systems, provides better visibility into customer data and streamlines communication.

3. Integrating technology and data. A common challenge in platform business integrations is failing to merge or integrate IT systems effectively, leading to data silos, inaccurate performance metrics, slow decision-making, and redundant systems. Without a deliberate plan to harmonize technology platforms and data infrastructure, businesses may find themselves struggling to unlock the full potential of their acquisitions, undermining the very value they set out to create.

Addressing the challenge of disconnected systems requires a deliberate and strategic approach to IT integration. A critical first step is conducting a comprehensive assessment of existing technology stacks across the platform and acquired businesses to identify gaps, redundancies, and opportunities for optimization. Cloud-based integration tools and platforms can enable seamless data sharing and process alignment in a scalable way, and a phased IT integration roadmap can prioritize the most critical systems—such as ERP, CRM, or supply chain platforms—while ensuring business continuity.

For example, our proprietary Digital Hub serves as a powerful bridge during mergers, seamlessly aggregating data from multiple systems across both companies. By harmonizing disparate datasets, it eliminates silos and ensures a unified, accurate view of operations, customers, and performance metrics. The platform enables advanced analytics and algorithm-driven insights, allowing businesses to identify revenue opportunities, streamline costs, and track synergies in real time.

4. Identifying and realizing deep cost synergies. Many deals fail to hit their cost-reduction synergies, particularly when the target company has operated independently with its own systems, processes, spending policies, and culture. Optimizing the structure of the combined organization requires a broad view of potential redundancies, addressing both labor and non-labor elements. 

Companies may struggle with identifying synergies due to a lack of detailed baseline data, misalignment on synergy targets across functions and organizations, or inheriting a complex legacy organizational structure. Differences in procurement strategies, technology stacks, operational processes, and vendor contracts can further complicate integration efforts, making it difficult to fully realize cost-saving opportunities. Optimizing the structure of the combined organization requires a broad view of potential redundancies, addressing both labor and non-labor elements.

On the labor side, a detailed evaluation of roles, reporting lines, and spans of control can highlight areas of overlap in functions such as sales, finance, and HR. By consolidating or realigning these roles and clarifying responsibilities, businesses can reduce inefficiencies while maintaining the expertise and capacity needed for seamless operations.

Non-labor redundancies, such as duplicative facilities, supply chain networks, or technology platforms, must also be addressed. Rationalizing physical assets, such as office spaces, warehouses, or manufacturing facilities, can generate significant cost savings while ensuring geographic coverage and operational continuity.

AlixPartners used this approach to support a global digital media and ad tech company that had completed several acquisitions with mixed success in terms of profit margins. The company closed a major deal to acquire an established competitor that would double its revenue and give access to more than 1 billion active monthly users. Our QuickStrike® approach and integration effort delivered nearly $2 billion in savings—$1 billion in workforce synergies and approximately $800 million in non-labor synergies—through a workforce reduction of over 20%, the consolidation of global sales operations, and the integration of technology and financial systems.

5. Capturing value on an accelerated timeline. Acquiring companies often underestimate the time and resources required to fully integrate operations, resulting in missed opportunities for cost savings and delayed revenue benefits. As a result, many organizations find themselves unable to capitalize on synergies in a timely manner, which can limit the overall value of the acquisition and undermine long-term success.

In response, organizations should set realistic timelines and establish clear accountability for capturing synergies. Regular monitoring through structured governance mechanisms—such as scorecards, real-time dashboards, and executive steering committees—ensures alignment and quick course-correction when needed.

Focusing on "quick win" initiatives, such as consolidating vendor contracts, optimizing pricing strategies, and integrating sales efforts, can generate early momentum and build confidence among stakeholders. Prioritizing high-impact initiatives within the first 100 days helps accelerate synergy capture and reinforces the business case for the deal.

Last year, a major U.S. technology company acquired a leading European competitor in a fast-evolving, highly disruptive market. We were engaged to lead a global integration, driving a comprehensive organizational redesign to enhance collaboration across product development, engineering, and other key functions. By streamlining operations and aligning teams effectively, we helped the company achieve twice the targeted synergies in half the expected time.

Building an integration-ready platform

By addressing these five challenges head-on, PE firms, portfolio companies and corporations can integrate deals more effectively and ensure that its platform businesses capture their full share of value though synergies. More important, buyers will build their M&A integration muscle—the processes, tools, and governance structures necessary to make future integrations more efficient and value-driven over the long term.