How One Executive Recruitment Firm Is Using M&A to Turn Earnings Into Bitcoin
Bitcoin Magazine How One Executive Recruitment Firm Is Using M&A to Turn Earnings Into Bitcoin XCE’s latest deal offers a case study in building the operating business and Bitcoin balance sheet s...
XCE’s latest deal offers a case study in building the operating business and Bitcoin balance sheet side by side.
Connecting Excellence Group (XCE) has signed binding Heads of Terms for its first proposed recruitment acquisition, targeting a specialist UK and U.S. recruitment business that generated £1.79 million in revenue and £431,000 in EBITDA over the last 12 months. The target also holds 8.216 Bitcoin.
The deal has not yet closed and remains subject to further due diligence, funding and a definitive purchase agreement. [Read XCE’s full announcement.]
Beyond the headline, the structure of the deal offers an interesting look at how an operating company can use M&A as part of a broader Bitcoin strategy.
XCE (AQSE: XCE | OTCQB: XCELF) wants to acquire profitable recruitment businesses, retain much of the earnings they generate, and expand the pool of internally generated capital available for growth and Bitcoin.
There is also a notable symmetry between buyer and target. XCE’s existing operating business, Spencer Riley, grew revenue 20.6% over its latest 12-month period. The acquisition target grew revenue 21.5% over the same period.
XCE is not simply looking to add scale. It is attempting to acquire growing, profitable businesses and bring them into a listed group with Bitcoin on its balance sheet.
XCE expects to pay £575,000 in initial cash consideration at completion. Approximately £425,000 would settle amounts owed to the target companies by the vendors and return to the group, resulting in an estimated net cash outflow of roughly £150,000 before transaction costs.
Another £60,000 cash payment is due in 2028, while much of the remaining consideration is deferred and tied to EBITDA performance through fiscal 2029. XCE expects to retain approximately 75% to 85% of the acquired business’s cumulative EBITDA during the earn-out period.
Compare that with the business being acquired: £1.79 million in trailing revenue, £1.27 million in gross profit and £431,000 in EBITDA, with revenue growing 21.5% year over year.
The objective isn’t simply to buy more revenue. XCE is attempting to acquire additional earnings power while preserving as much capital as possible.
If the business continues performing after completion, those earnings become another source of capital available for reinvestment, additional acquisitions and Bitcoin.
When an acquisition target holds cash reserves, XCE can structure a transaction to acquire that reserve from the seller and then change how that capital is held once it sits inside the group. In practice, that could mean raising capital to acquire £1 million of existing cash reserves and subsequently converting that reserve to Bitcoin.
The result is different from simply raising £1 million and spending it on Bitcoin. XCE is acquiring the operating business around the reserve as well: its revenue, earnings and future cash-generating capacity.
This proposed deal provides a direct example of the same principle, except the target has already made the conversion.
Under the proposed terms, XCE would purchase that Bitcoin at market value with no premium. The cash paid would be matched by Bitcoin of equivalent value moving onto XCE’s balance sheet.
So the Bitcoin isn’t being acquired for free with the operating business. XCE is effectively exchanging cash for an equivalent amount of Bitcoin while separately acquiring the underlying earnings stream.
If completed, however, the transaction would expand both sides of XCE at once: another growing, profitable operating business and another 8.216 BTC on its balance sheet.
That combination is central to the model. An acquisition can potentially add revenue, EBITDA and balance-sheet assets at the same time.
How XCE intends to operate the businesses after acquisition is another important part of the strategy.
The company is targeting profitable, owner-managed specialist recruitment businesses, but it does not intend to absorb them into a single centralized operating brand.
Acquired companies retain their existing brands, management teams and operating independence while joining a publicly listed group backed by a Bitcoin balance sheet. That makes XCE’s model closer to a decentralized acquisition compounder.
Rather than attempting to create value primarily through integration and cost cutting, the strategy is designed to let individual businesses continue operating with autonomy while XCE provides permanent ownership, access to the listed group and centralized capital allocation.
XCE’s existing business gives some context for the type of growth it is looking to add. Spencer Riley generated approximately £1.84 million in revenue during the 12 months ended June 30, up 20.6% from the prior year. The proposed acquisition target grew at a similar rate, with revenue rising 21.5%.
Asanat Analysis — Why it matters
XCE's acquisition strategy represents a structured approach to building a Bitcoin balance sheet through operating business cash flows rather than pure capital raises. By acquiring profitable, growing recruitment firms while preserving their autonomy and earnings (retaining 75-85% of EBITDA through earn-out structures), the company creates a compounding mechanism: each acquisition adds both operating cash generation and potential balance-sheet Bitcoin simultaneously. This differs materially from companies that acquire Bitcoin through one-off capital raises or debt issuance—XCE is constructing recurring earnings power to fund future allocations.
The model signals a broader shift in how operating companies might approach Bitcoin treasury strategies. Rather than viewing M&A and Bitcoin accumulation as separate corporate functions, XCE treats them as integrated: acquisition targets' cash reserves can be converted to Bitcoin at market rates, and the underlying business earnings provide the sustainable capital source. This approach sidesteps the volatility criticism of pure speculative Bitcoin purchases by anchoring allocations to operating cash flow. However, execution risk remains high—the success depends on XCE's ability to consistently identify and integrate high-quality, capital-efficient recruitment businesses without destroying their earnings through over-integration or management friction.
The strategy also reflects the maturation of Bitcoin as a corporate asset class. Unlike early adopters (MicroStrategy, Tesla) that used balance-sheet leverage or external fundraising, XCE is embedding Bitcoin accumulation into organic business operations. The involvement of Adam Back (Blockstream CEO) as a major shareholder adds credibility within Bitcoin circles, though the model's viability ultimately hinges on whether small, autonomous acquisition targets can sustain high growth rates within a listed group structure—a structural challenge that traditional conglomerates have struggled to solve.