# How One Company Is Using M&A to Build a Bitcoin-Backed Operating Group
A publicly listed company is pursuing a strategy that blends traditional acquisitions with digital asset accumulation, creating a blueprint for how corporate Bitcoin strategies can be built from the ground up through operating businesses.
## The First Deal in a New Model
The company, known as Connecting Excellence Group (ticker: XCE), has reached a binding agreement to acquire its first specialist recruitment firm operating in the UK and United States. The target business generated £1.79 million in revenue and £431,000 in earnings before interest, taxes, depreciation, and amortization over the last twelve months. Notably, the target also holds 8.216 Bitcoin on its balance sheet.
The transaction has not yet closed. It remains conditional on further due diligence, secured funding, and the execution of a definitive purchase agreement.
What makes the deal structurally interesting is how it weaves together three separate value streams: a profitable operating business, retained earnings, and digital assets on the balance sheet.
## A Deal Built Around Earnings Retention
The financial terms reveal a carefully designed structure that prioritizes capital preservation.
XCE plans to pay £575,000 in initial cash consideration upon closing. Of that amount, roughly £425,000 would settle outstanding debts owed by the target to its former owners, redirecting those funds back into the group. The estimated net cash outflow before transaction costs sits at approximately £150,000.
Beyond the initial payment, an additional £60,000 cash installment is scheduled for 2028. The majority of the remaining purchase price is deferred and linked to EBITDA performance through fiscal year 2029. Under the proposed terms, XCE expects to retain between 75% and 85% of the acquired business’s cumulative EBITDA during the earn-out window.
The target’s financials paint a picture of a healthy, growing enterprise. Trailing revenue stands at £1.79 million, supported by £1.27 million in gross profit and £431,000 in EBITDA, all with year-over-year growth exceeding 21%.
The core objective is not simply to add top-line revenue. It is to acquire durable earnings power while preserving as much capital as possible for future deployment.
## Capturing Balance Sheet Assets Through M&A
The acquisition model extends well beyond revenue and profitability.
When a target company holds cash reserves, the acquiring group can structure the deal to take ownership of those reserves and then determine how that capital is deployed within the group. In practical terms, this could mean raising capital equivalent to a target’s cash holdings, acquiring those reserves as part of the transaction, and then converting them into a different asset class.
In this particular case, the target has already completed that conversion. It holds 8.216 BTC.
Under the proposed terms, XCE would purchase the Bitcoin at prevailing market value with no premium applied. The cash outflow would be offset by an equivalent amount of Bitcoin moving onto XCE’s balance sheet.
The Bitcoin is not being acquired for free alongside the operating business. XCE is effectively swapping cash for an equal value of Bitcoin while independently acquiring the underlying revenue and earnings stream. If completed, the transaction would simultaneously grow the group’s operating footprint and increase its digital asset holdings.
This dual expansion—operating business plus balance sheet asset—is the central mechanic of the strategy.
## A Decentralized Acquisition Compounder
How the company manages its acquisitions after closing is just as important as the deals themselves.
XCE is targeting profitable, owner-managed specialist recruitment firms. It does not intend to absorb them into a single centralized brand. Instead, acquired companies keep their existing names, management teams, and operational independence while becoming parts of a publicly listed group that holds Bitcoin on its consolidated balance sheet.
This approach positions XCE as a decentralized acquisition compounder. Rather than driving value primarily through integration and cost reductions, the model allows each business to continue operating independently while XCE provides permanent ownership, access to a public listing, and centralized capital allocation across the group.
The existing business offers a template. Spencer Riley, XCE’s operating arm, generated approximately £1.84 million in revenue over the twelve months ending June 30, representing 20.6% growth from the prior year. The proposed acquisition target grew at a comparable pace, with revenue rising 21.5% over the same period.
If the company can continue adding businesses with similar economic profiles, the group stands to compound by layering in new earnings streams without disrupting the operations producing them. Those earnings then flow into a unified capital allocation framework where Bitcoin is one potential allocation.
## Developing Multiple Sources of Capital
The Bitcoin position has grown significantly over a relatively short period. As of early September, the company held 72.94 BTC, up dramatically from 9.27 BTC at the time of its December 2025 IPO.
Recent capital markets activity has contributed directly to that growth. A long-standing investor committed new capital by subscribing for XCE shares in exchange for the transfer of 10 BTC, increasing the company’s Bitcoin holdings by approximately 15.9%.
M&A introduces yet another potential source of capital alongside equity raises and direct acquisitions. Earnings generated by acquired businesses and balance sheet assets taken on as part of deals can both contribute to the group’s overall capital base.
When viewed together, the framework operates as follows:
– **Acquire profitable businesses**
– **Preserve their autonomy and earnings capacity**
– **Grow group-level cash generation**
– **Allocate capital across further acquisitions and Bitcoin**
– **Repeat the cycle**
External capital provides immediate purchasing power, as demonstrated by the investor Bitcoin subscription. Acquired reserves can add balance sheet liquidity. Profitable operating businesses continue generating capital as long as they perform. XCE is attempting to harness all three pathways simultaneously.
## The Fundamentals Still Matter Most
Owning Bitcoin does not compensate for acquiring a weak business at an inflated price. XCE still needs to identify quality targets, pay sensible valuations, preserve the earnings power of each acquisition, and allocate the resulting capital with discipline.
What the strategy does illustrate is a way for Bitcoin to sit within a traditional operating company without becoming disconnected from the business driving its value.
The decentralized structure reinforces this separation. Not every company in the group needs to be a “Bitcoin company.” The recruitment firms can continue serving their clients, operating under established brands, and generating consistent earnings. Bitcoin remains at the group level as one element of a broader capital allocation strategy.
This reframes the question of corporate Bitcoin ownership. The company can raise external capital. It can acquire existing reserves and change how they are held. It can purchase profitable businesses and keep the cash flows they produce. Management then distributes capital across operations, further acquisitions, corporate needs, and digital assets. That is how XCE is using M&A to transform earnings into Bitcoin.
Not by converting every pound of profit into BTC automatically, but by constructing a decentralized group of profitable businesses capable of producing more capital and treating Bitcoin as one destination for that capital.
For business operators, the more compelling question may not be how to find additional capital to purchase Bitcoin, but rather how to build a business capable of generating more capital on its own.
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## Frequently Asked Questions
**What type of businesses is XCE looking to acquire?**
XCE is targeting profitable, owner-managed specialist recruitment firms operating in the UK and United States. The focus is on businesses with demonstrated revenue growth and healthy margins.
**How does XCE plan to manage acquired companies?**
Acquired businesses retain their existing brands, management teams, and operational independence. They are not folded into a single centralized operating entity.
**Why does the target’s Bitcoin matter if XCE is paying cash for it?**
The Bitcoin is not acquired at a discount. XCE pays market value in cash and receives Bitcoin of equivalent value. The strategic benefit is adding digital assets to the group’s balance sheet alongside the earnings stream of the acquired business.
**How is the deal financed?**
The initial cash consideration is £575,000, with a portion offset by settling vendor receivables. Additional cash is due in 2028, and the remainder is deferred and contingent on EBITDA performance through fiscal 2029.
**What percentage of acquired EBITDA does XCE retain?**
During the earn-out period, XCE expects to retain approximately 75% to 85% of the target’s cumulative EBITDA.
**How has XCE’s Bitcoin position grown since its IPO?**
XCE held 9.27 BTC at the time of its December 2025 IPO and grew that position to 72.94 BTC by early September, driven by capital markets activity and planned acquisitions.
**Is XCE converting all of its operating profits into Bitcoin?**
No. The strategy does not involve automatically converting every pound of profit into BTC. Instead, it builds a capital-generating group and treats Bitcoin as one of several potential destinations for the capital produced.
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## Conclusion
The strategy being executed by XCE represents a distinct approach to corporate Bitcoin adoption. Rather than treating digital assets as a speculative side bet, the company is integrating them into a repeatable acquisition framework where profitable businesses, retained earnings, and balance sheet assets all feed into a unified capital allocation model.
The decentralized operating structure allows each acquired business to thrive independently while contributing to a group-level strategy that includes Bitcoin as a long-term store of value. The financial architecture of the first deal—combining deferred consideration, performance-linked earn-outs, and balanced cash and asset transfers—demonstrates that it is possible to design transactions that preserve capital while expanding both the operating portfolio and the digital asset position.
Whether this model scales depends on execution, deal sourcing, and the continued performance of acquired businesses. But the underlying thesis is clear: building a group of profit-generating businesses and directing some of that capital toward Bitcoin offers a fundamentally different path than simply raising capital to buy digital assets on the open market.
Thank you for reading.
