TY  - JOUR
U1  - Wissenschaftlicher Artikel
A1  - Hammer, Benjamin
A1  - Marcotty-Dehm, Nikolaus
A1  - Schweizer, Denis
A1  - Schwetzler, Bernhard
T1  - Pricing and value creation in private equity-backed buy-and-build strategies
JF  - Journal of Corporate Finance
N2  - We investigate the pricing and value creation in private equity-backed buy-and-build (B&B) strategies using a sample of 3399 buyouts between 1997 and 2020 as well as proprietary performance data. We find that private equity firms pay sizable premiums for B&B platforms. The transaction multiples are similar to those paid by strategic acquirers for matched targets. Despite paying high premiums, private equity firms generate above-average equity returns in B&B strategies. This is because of both higher top-line growth and multiple expansion. To back up our empirical results and shed light on decision-making in B&B strategies, we present evidence from the field. Survey results from 32 interviews with private equity managers provide novel insights into B&B rationale, valuation practices, pricing, value creation, acquisition processes and execution.
KW  - Leveraged buyout
KW  - M&A
KW  - Add-on
KW  - Tuck-in
KW  - Multiple expansion
Y1  - 2022
SN  - 1872-6313
SS  - 1872-6313
U6  - https://doi.org/10.1016/j.jcorpfin.2022.102285
DO  - https://doi.org/10.1016/j.jcorpfin.2022.102285
VL  - 77
IS  - December 2022
SP  - 28
S1  - 28
ER  -