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Buy-and-Build in Construction: Integrating Leadership Teams Across Add-On Acquisitions

How private equity platforms in construction should integrate leadership after add-on acquisitions, retain key field talent, and build a shared talent acquisition function across operating companies.

Shawn DesgrosellierOct 19, 20267-minute read

A construction buy and build strategy succeeds or fails on people more than systems. Each add on brings its own leaders, culture, client relationships and ways of running projects.

  • Decide early what will be shared across the platform and what will stay local.
  • Keep the project leaders clients depend on.
  • Build a talent function that can recruit for every company under the platform.

Platforms that integrate well do all three.

01 · Integration riskWhy Integration Is Harder in Construction

Add on acquisitions in construction are often regional or trade specific businesses, many still led by their founders. Their value depends on local relationships and field leaders who know the market.

Hypothetical
Figure 1. Six companies, six markets, three founders still in charge
Loading map…
Platform companyAdd-on operating companyFounder still leading
A made-up platform across Texas, Oklahoma and Louisiana. Each add-on is regional or trade specific, and its value sits in local relationships and field leaders.

That leaves two ways to get it wrong:

Too aggressive

Destroys what you bought

Integrating them too aggressively can destroy what made them worth buying.

Field leaders and clients leave
Too loose

A holding company

Integrating them too loosely leaves separate businesses that never capture the expected benefits.

The thesis never shows up

02 · Draw the lineDecide What Is Shared and What Stays Local

Most successful construction platforms share back office functions and keep customer facing and field leadership local.

Illustrative
Figure 2. Where each function usually sits
SHARED ACROSS THE PLATFORM KEPT LOCAL Finance, accounting, reporting Safety program standards HR, benefits and payroll Talent acquisition Purchasing and insurance Operations and project teams Clients and business dev. Estimating, local market and trade Field culture, day to day mgmt. Brand during the transition One platform standardRecruits for every company Run by the local leaderTied to key people
Owners, architects and field crews deal with everything on the right. Very few of them notice who runs payroll.
Before close

Make these decisions before close where possible, and communicate them clearly. Uncertainty about what will change is one of the main reasons good people leave.

03 · Field talent retentionProtect the People Clients Depend On

In every acquired company, identify the project executives, project managers and superintendents whom clients specifically request. Usually it is a short list, and it is rarely the same as the org chart.

Hypothetical
Figure 3. Map who clients ask for, by name
REPEAT CLIENTS WHO THEY ASK FOR Hospital systemSchool districtUniversityDeveloper A Developer BCityIndustrial ownerMedical office developer Project executive A Project executive BPM · healthcarePM · K-12PM · industrial Supt. · hospitalsSupt. · schools 4 1 0 2 1 2 2 One project executive holds four of the eight client relationships.
Numbers show how many repeat clients ask for each person by name. A made-up company; the pattern is common in founder-led contractors.

Then act on that list:

1
First weeks after closeShow up in person
  • Meet with them personally
  • Explain what will and will not change for them
2
Most critical peopleGive a reason to stay
  • Consider retention bonuses
  • Or equity participation
3
Often overlookedShow the path
  • A career path inside the larger platform that did not exist before

The last point is often overlooked. A larger platform can offer project variety, regional leadership roles and mobility that a single company could not. That is a strong retention message if leaders deliver on it.

Field crew on an active jobsite, the people clients ask for by name

04 · Platform structureAlign the Leadership Team

As the platform grows, the sponsor will need to define a structure: a platform CEO and CFO, operating company presidents, and shared functional leaders.

Illustrative
Figure 4. A typical platform structure
Sponsor and board Platform CEO Platform CFOHR and talentSafetyPurchasing Finance and reportingRecruits for every OpCoOne program standardInsurance and buying SHARED FUNCTIONAL LEADERS OpCo A presidentOpCo B presidentOpCo C president Former ownerFormer ownerFormer owner Decision rights in writingDecision rights in writingDecision rights in writing
The functional leaders sit at the platform. Customer facing and field leadership sits with each operating company president.

Common challenges include:

Challenge
What to do
Former owners now reporting to someone else
Clarify decision rights and the role each former owner will play.
Inconsistent titles and pay
A "Vice President" at one company may be a senior project manager at another. Harmonize over time, carefully.
Culture clashes
A union subcontractor and an open shop general contractor operate differently. Respect those differences rather than forcing one model.

05 · Recruiting across operating companiesBuild a Shared Talent Acquisition Function

Most add on companies recruit informally, often through the owner's network, a few job board postings and occasional agency help. Across five or six companies, that becomes expensive and inconsistent.

1function
Instead of six habits

One recruiting team, with common tools and standards, recruiting for every company under the platform.

A shared talent acquisition function can:

  • Recruit for all operating companies using common tools and standards
  • Share candidates across companies when one is not the right fit for a specific role
  • Track time to fill, cost per hire and retention across the platform
  • Build employer branding that highlights the career paths of the larger group
  • Reduce dependence on outside agency fees for roles that can be filled internally
Illustrative
Figure 5. Three ways to stand up the function
Build in houseOutsourceStart outside,move in house Internal recruiting team Outside partner runs recruiting for every company Outside support builds it Internal team takes over Handoff Start Over time
No fixed timing. The third path lets the platform recruit well on day one while it builds its own team.

06 · ClosingWhat This Means for Your Firm

Buy and build creates value when the combined company can attract, keep and grow talent better than any of its parts could alone.

Sponsors who plan the people side of integration as carefully as the financial side protect the relationships they paid for and build a platform that is more valuable at exit.

Vitality Group supports construction platforms with executive search for platform leadership, and Vitality Talent Acquisition helps design and build shared recruiting functions across operating companies. Talk with us about your platform.

About the author
Shawn Desgrosellier is Founder, President and CEO of Vitality Group, an executive search firm specializing in construction and real estate, and founder of Vitality Talent Acquisition, which helps employers improve talent acquisition performance.

FAQCommon Questions

What should be shared across a construction buy-and-build platform?

Most successful platforms share back office functions: finance, accounting and reporting; safety program standards; HR, benefits and payroll; talent acquisition; and purchasing and insurance. Operations leadership, client relationships, local estimating, field culture and, at least during the transition, the brand usually stay local.

How do you retain key field talent after a construction add-on acquisition?

Identify the project executives, project managers and superintendents whom clients specifically request. Meet with them personally in the first weeks after close, explain what will and will not change, consider retention bonuses or equity for the most critical people, and show them a career path inside the larger platform.

How should a PE-backed construction platform structure its leadership team?

Typically a platform CEO and CFO, operating company presidents and shared functional leaders. Clarify decision rights for former owners, harmonize titles and pay over time, and respect cultural differences such as union versus open shop rather than forcing one model.

Should a construction platform build its own talent acquisition function?

It can be built in house, outsourced, or started with outside support and transitioned to an internal team over time. Either way, a shared function recruits for every company with common tools, shares candidates, tracks time to fill, cost per hire and retention, and reduces agency fees.

Building a construction platform?

Protect the relationships you paid for.

Executive search for platform leadership, and shared recruiting functions built across your operating companies through Vitality Talent Acquisition.

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