The Leadership Dilemma in Manufacturing Roll-Ups: Why PE Firms Can’t Afford to Get It Wrong

Private equity's interest in utilities and industrial manufacturing is at an all-time high, and for good reason. Infrastructure investment is no longer a back-office category. It sits at the heart of national priorities, from grid modernization and electrification to data center power infrastructure and energy resilience.

But as capital flows into the industry and roll-up strategies accelerate, many firms find themselves faced with an inconvenient truth: integrating multiple industrial companies is a leadership problem as much as it is a financial one.

If your executive team doesn’t evolve as fast as your portfolio does, not only will growth stall, but you’ll find yourself quietly eroding your enterprise value.

The Industrial Roll-Up: High Potential, Higher Risk

Consolidation is the strategy du jour. Platforms like Power Grid Components and Voltaris (Mill Point Capital’s latest move) are being formed via the acquisition of multiple specialized manufacturers—insulators, switchgear, transformers—under one unified structure. The logic is sound: shared services, procurement leverage, cross-selling synergies, and expanded geographic footprints.

But stitching together these businesses requires more than a P&L roll-up. It demands operational, cultural, and strategic integration, usually under serious time pressure. That means the leadership team must be capable of scaling operations, aligning systems, and driving accountability across newly acquired divisions, often with conflicting internal cultures and legacy processes.

Too often, the assumption is that the existing leadership team can simply “grow into the role.” Unfortunately, this isn’t always the case.

Legacy Leaders Aren’t Always Built for Scale

Most founder-led or family-owned industrial businesses are built for stability, as opposed to velocity. Their leaders are deeply experienced and incredibly valuable. But that doesn’t necessarily translate to leading a multi-entity enterprise through private equity-backed growth. That’s not a knock on their talent; it’s a recognition of scope.

Running a 50-person switchgear company in the Midwest is a different game from integrating four companies across three states with shared IT, compliance, and procurement systems, especially when you also have to meet an aggressive EBITDA target in 18 months.

And yet, this is exactly what many roll-up CEOs are expected to do, often without clear support, coaching, or the necessary upgrades to their teams. Often, this results in frustrating delays, catastrophic disintegration, and overall disillusionment. Despite its frequency, this leadership mismatch is one of the most under-discussed drivers of roll-up underperformance.

What the Right Leaders Do Differently

Kersten Talent Capital has seen this firsthand across dozens of transactions. The roll-ups that create outsized value all have one thing in common: a leadership team that evolves in lockstep with the business strategy.

That starts with a CEO who:

Understands integration playbooks and can coordinate across functions and geographies;
Attends to PE demands and shop-floor realities with equal efficiency, aligning investment theses with day-to-day execution;
Builds scale-ready teams who can run new divisions, not just maintain legacy operations
Drives transparency and accountability, especially during post-close turbulence;

In essence, these leaders are manufacturing growth, rather than simply managing it.

Case Studies: Voltaris, Quanta Services, and Beyond

In order to get a better sense of what we mean by this, let’s look at a few roll-up examples that illustrate how leadership choices directly influence outcomes.

Mill Point Capital’s Voltaris resulted from acquiring businesses from Pioneer Power and ERMCO, each with distinct cultures, products, and customer bases. Integrating them required leaders who could go beyond product knowledge to drive operational synergy across inventory management, compliance, and go-to-market strategy. That kind of unification can only happen when leadership is deliberately upgraded.

Quanta Services, a major energy infrastructure player, also made strategic M&A moves in 2024, including its acquisition of Niagara Power Transformer. What set Quanta apart wasn’t just the acquisition. It was the systematized integration process and leadership bench that allowed new companies to plug into a growth engine, not just a balance sheet.

In both cases, the success of the transaction depended as much on who was leading as it did on what was acquired.

The Real Risk Isn’t Financial. It’s Operational Drift

Private equity firms often build risk models around regulatory exposure, supply chain volatility, and inflation. But far fewer bake executive capacity into their diligence. That’s a mistake.

Here’s what happens when leadership doesn’t keep pace with platform complexity:

Integration milestones are missed
Culture fractures between legacy and new teams
Technology implementations are delayed
Reporting and KPIs become inconsistent
Institutional knowledge is lost in transition

None of these things show up on a deal sheet. All of them show up in your quarterly performance.

Solving the Dilemma: Build for Scale from Day One

At Kersten Talent Capital, we believe PE firms must stop treating executive hiring as a reactionary fix and start treating it as a strategic asset class. That means:

Assessing leadership fit during diligence, not after close
Coaching legacy leaders where appropriate, and replacing them when necessary
Hiring integrator COOs and scale-savvy CFOs who can bring structure, discipline, and performance metrics to multi-entity environments
Creating 90-day onboarding plans for key executives aligned with integration and value creation milestones

In other words, treat leadership as you would any other critical infrastructure.

You Can’t Scale Chaos

The roll-up model has real potential. The industrial economy needs consolidation, and private equity is positioned to lead that charge. But if you underestimate the leadership complexity involved, you’ll find yourself scaling chaos rather than value. The executive team is not a rounding error. They are the architecture.

So, if you’re preparing to launch or expand a manufacturing platform, ask yourself: Do you have the right leadership not just to grow, but to scale? Because getting it wrong won’t just slow you down.

It’ll cost you everything you came to build.

Need help evaluating or upgrading your executive team in an industrial roll-up?

Kersten Talent Capital works directly with private equity firms and their portfolio companies to align leadership with strategy—before, during, and after the deal.

The Leadership Dilemma in Manufacturing Roll-Ups: Why PE Firms Can’t Afford to Get It Wrong