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A buy-and-build strategy allows a GP to justify the initial acquisition of a relatively expensive platform company by offering the opportunity to tuck in smaller add-ons that can be acquired for lower multiples later on.
What is Buy and Build? The buy and build strategy is when a company expands its operations by acquiring a platform company with developed expertise that it can then build out. When a business requires growth and expansion, there are several possibilities to consider.
The buy and build strategy is one of the most common ways to add value to an organization. It can be a fast, effective way to take a company with single-digit growth to a high rate of...
The buy and build strategy involves an organization that is aiming to expand operations in a specific direction, purchasing a well-established organization within that sector, and then growing the business via the acquisition of additional organizations in the same industry.
The buy-and-build strategy is a popular M&A strategy to accelerate the growth of a company and significantly enhance its value. Through targeted acquisition and integration of multiple companies in highly fragmented markets, investors can achieve a higher value and return.
There’s one simple reason for the surge in buy-and-build deals: they outperform standalone PE deals, generating an average IRR of 31.6% from entry to exit, com-pared with an IRR of 23.1% for standalone deals. The study also sheds light on how buy-and-build deals create value.
The buy and build strategy is a method companies use to expand and add value to their current organization. This specific strategy is when a company buys a platform company and then proceeds to build upon it.
A buy and build strategy can achieve many things, including expanding your range of products and services; entry into new markets, including expanding internationally; the acquisition of new patents, skills, equipment or technology; or the opportunity to benefit from industry consolidation.
Discover the strategy behind successful buy-and-build approaches in private equity. Learn how businesses are reshaped through acquisitions for exceptional results.
Buy-and-build strategies take advantage of this valuation differential by combining many smaller firms, acquired at lower multiples, in order to create a larger, more diversified...