Disclaimer: Unless noted otherwise, views and analysis expressed here are the author's own and based on public sources. The article is intended for informational and entertainment purposes only. This is not financial advice. Please consult a professional for investment decisions.

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Admit it: was there a time you passed on a deal because it was…Italy? If the answer is “yes”, now is the time to reconsider. For we’ve just come back from Milan, which yesterday hosted our first-ever Serial Acquirer Summit in the country. Over 100 RollUpEurope subscribers from all four corners of the world showed up: investors, operators, advisors. Everyone came looking for a piece of the booming Italian lower mid-market. 

Pictured above next to Alex are Matthias Vandepitte and Abril Domingo from Strada Partners, who bankrolled the event. Strada are a longtime supporter of RollUpEurope and Europe’s most active investor in Buy & Builds. Out of Strada’s 10 live platforms, 3 are in Italy: more than in any other country outside of Belgium, its home base.   

There are reasons to believe the Italian LMM boom has a long way to go.  

First of all, Italy is a country of superlatives. Its $2.6 trillion economy is the EU’s 3rd largest (+/- Texas). Italy is the EU’s 2nd largest goods exporter. 

On a less positive note, Italy is the EU’s oldest country with a median age of 49. For context, Germany is at 45.5 and the US is at 39. The average age of the Italian SMB owner is higher still, at 56 years old. 

Not trying to minimise the societal impact of plunging birth rates, but to us these figures scream buying opportunity. We saw this in Japan with NGTG. We saw this in Germany with Chapters Group and with Forum Family Office. All 3 are billion-dollar companies built from scratch, with limited equity, and in “low-growth economies”.    

Now, how come we haven’t heard about the “NGTG of Italy”? 

Because for years, domestic PE have hoarded succession-driven deal flow. But, with so much supply coming in (deal volumes were up 19% last year), they can no longer keep it to themselves. Previously, we’ve covered new players going after the opportunity - search funds, Independent Sponsors, and listed HoldCos:

What follows are our notes from the Summit’s two panels: 

The transcripts have been edited for clarity. Before we dive in, big thanks to our longtime supporters Reef Pass Investors (backers of serial acquirers / HoldCos); Pavleta from PPHF (your Fractional CFO par excellence); and TechCredit (don't DIY debt - call Linus!). Next month, we will be announcing our 5th partner: an AI consultancy. Stay tuned! 

If you need proof of the incredible talent flowing into the space, consider our panelists Fabio Nalucci and Thomas Melkebeke. 3 years ago, it would’ve been hard to imagine either of them pursuing €1M EBITDA “traditional” businesses. Thomas spent 12 years at McKinsey, followed by leadership roles at a Japanese tech company and a Belgian Used Cooking Oil rollup. Fabio is a twice-exited tech founder. 

Today, Thomas is rolling up Managed Service Providers (Cofactor), whereas Fabio’s rollup collection is more esoteric, encompassing bakeries, chauffeur services, and HVAC, and forming part of his merchant-bank like vehicle FNDX.  Matthias Vandepitte from Strada moderated the panel:  

Matthias: Buying is one thing. Integrating business afterwards is something else. What do you do the day after closing?

Thomas: We start planning 9 weeks before closing. After the LOI has been signed, we get in touch with the key people at the firm. That way, there are no surprises on Day One. As new owners, we help the management be more decisive. We bring a CFO on board to make sure that every decision translates into numbers.

Fabio: I need to understand the operation from the bottom. With the chauffeur service business, I spent a week in a car with drivers to understand client dynamics, followed by a week in the operating room watching people answer phones. After that, I onboarded the COO responsible for operations. We agreed on the KPIs and let him achieve those. 

Matthias: Thomas, you've just closed your first acquisition. What is your setup? 

Thomas: As I mentioned, my first hire was the CFO, to cover financial transparency, integration models, and HR in the early stages. My second hire was Head of M&A who knew the sector and didn't need things explained from scratch.

Fabio: For me, a key hire is Chief Data Officer - someone who comes from a science background, thinks in root cause and effect, and can reason why a KPI is underperforming and implement a strategy to fix it. I had a controller who left; before replacing him I audited what he did and found most of it could be done with Python routines and ETL procedures. 

Matthias: In your organisations, what traits do you test for? Some profiles look great on a CV but don’t work out in real life. 

Fabio: Curiosity first. If you’re not a domain expert, you must have attention for detail. The type of people who look for typos in chart titles. Secondly, they must be very smart. I test that by creating anxiety and challenges during the conversation. After a few minutes the conclusion becomes obvious.

Thomas: I look for people who want to roll up their sleeves. We don’t want to build an army at the holding level. Red flag: you hire a CFO and within 3 months they’re asking for a controller; 2 months later another hire. I’m an Individual Contributor as well, and I tell the team to be flexible. 

Audience question: Fabio, Thomas, can you expand on due diligence processes in your respective platforms?

Thomas: It depends heavily on the sector. In my previous company, a Used Cooking Oil recycling rollup, decent bookkeeping was rare. Often, just boxes of handwritten slips. Our mitigants were: doing asset deals, paying based on declared volumes, and 3-6 month earn-outs. Very different in IT services, where we do financial, legal, and commercial DD. Core insight: work with an advisor who doesn’t delegate to juniors. Since accounting standards are open to interpretation, a junior looking at an Excel sheet can miss the real EBITDA picture entirely.

Fabio: Can I stir up some controversy? “Black economy” is a feature of many traditional Italian businesses. You see two similar companies, one is at 25% EBITDA margin, the other at 5%, and the difference is the cash that disappeared from the balance sheet. Once, I found fuel consumption in a company’s accounts that turned out to be a boat trip from Boston to Miami. You can find sofas, TV sets, even kitchens on corporate balance sheets. My practical advice is to include a) W&I insurance for standard matters and b) a large escrow specifically for tax liabilities. These liabilities can surface years later. Don't DIY DD: get opinions from respected legal and financial advisors. But be pragmatic: most deals I’ve done in the last 5 years, my lawyer and accountant would have said don’t do it. 

And on that note, Alex took over the stage to moderate the second panel: 

The second panel featured Carlo Pajusco and Michele Fontana Sabatini from Sunrise Capital and Andrea Allegrini from Lindbergh. 

Some context:

Alex: We have two acquirers with very different backgrounds. One a listed company, the other was born as a search fund. Both have been very successful, but it didn’t come easy. Andrea, can you introduce yourself and Lindbergh?

Andrea: Lindbergh was founded in Cremona, Italy, 20 years ago. Our roots lie in waste management and MRO logistics - serving material handling companies across Italy. In 2014 we added logistics services, and from 2020 to 2024 we had a business in France. In 2023, we became Italy’s first HVAC roll-up. Fast forward 3.5 years, that division (called Smit) has completed 14 acquisitions, representing c.60% of group turnover. I’ve been with the company since 2008, covering all roles, most recently business development.

Carlo: I have a background in finance (Morgan Stanley, RBC), followed by stints in my family business staging a turnaround, and later in technology. 3 years ago, I raised a search fund. For the acquisition, I partnered up with Michele, who I've known for 20+ years.

Michele: Similarly to Carlo, I started my career in investment banking in London, then moved into private equity and worked on several roll-ups. Next, I decided to bring that experience to the lower mid-market market. Italy’s SME sector is the largest in Europe, and it’s rapidly ageing: one-third of entrepreneurs are aged 60-plus. Most of them don’t have a succession plan. 

Alex: This panel is called “Rollup War Stories” for a reason. Andrea, you once told me that the HVAC division was born out of a failure. Can you elaborate on that?