This paper iestigates inorganic growth strategies in PE buyouts where the portfolio firm, which has been acquired in the initial buyout, serves as a platform for subsequent add-on acquisitions. We analyze a comprehensive sample of 9,548 buyouts and 4,937 add-on acquisitions spanning 16 years of buyout activity in 86 countries. We find that probability for add-on acquisitions is high if the PE sponsor is experienced and has reputational capital, if the portfolio firm is large, has M&A experience at entry and operates in an industry with moderate degree of fragmentation, as well as in case of favorable financing conditions. Similar factors also explain higher add-on productivity and faster add-on execution. On average, cross border/industry diversifying inorganic growth strategies are most likely if the portfolio company already draws upon international/inter-industrial M&A experience at entry and if the PE sponsor frequently iests across border/industries. Furthermore, our results indicate that add-on acquisitions increase the probability for exiting through IPO and secondary buyout. The effect on secondary buyouts is driven by deals where the subsequent PE owner continues the inorganic growth strategy of the previous buyout. Keywords: Leveraged buyout, mergers and acquisitions, buy and build, add-on, bolt-on

In dieser Ausgabe finden Sie Daten aus Thomson Reuters Datastream für den deutschen Kapitalmarkt zum Stichtag 14.07.2017. Die Zusammensetzung der Branchen orientiert sich an der offiziellen Brancheneinteilung des Prime Standard der Deutschen Börse AG. Die Daten sind sorgfältig erhoben und ausgewertet, dennoch kann eine Haftung für die Richtigkeit nicht übernommen werden.

In dieser Ausgabe finden Sie Daten aus Thomson Reuters Datastream für den deutschen Kapitalmarkt zum Stichtag 14.04.2017. Die Zusammensetzung der Branchen orientiert sich an der offiziellen Brancheneinteilung des Prime Standard der Deutschen Börse AG. Die Daten sind sorgfältig erhoben und ausgewertet, dennoch kann eine Haftung für die Richtigkeit nicht übernommen werden.

This dissertation presents three essays on buy and build strategies (also called inorganic growth strategies), in which a portfolio company serves as a platform for add-on acquisitions, and default probabilities of PE portfolio companies. All three studies have in common that they shed light on positive and negative implications of the maturing of the PE industry. That is, the strong growth of the PE market in the second buyout wave of the 2000's has led to increasing competition and a "commoditization" of many traditional value creation levers. The 2008-2009 Global Financial Crisis has furthermore put the use of leverage for acquisition financing under pressure. As a result, PE firms have been forced to find new ways to generate return for iestors and adapt to a changing market eironment. The presented papers iestigate the implications of the changing PE business model empirically using a global database of 16 years of PE activity. ---------------------_x000D_ A copy of this doctoral thesis can be obtained on account from the HHL Library. Please send your request indicating the delivery address to: library(at)hhl.de._x000D_ For packaging and postage we request an advance payment of EUR 5.00 for deliveries within Germany or EUR 20.00 for international orders.

Der Lehrstuhl Finanzmanagement und Banken an der HHL Leipzig Graduate School of Management ermittelt vierteljährlich Multiplikatoren, Beta-Faktoren und Eigenkapitalkosten für den deutschen Kapitalmarkt und stellt diese auf der Internetseite http://www.finexpert.info/ und in CORPORATE FINANCE zur Verfügung. Die Daten zeichnen sich durch Transparenz und Nachvollziehbarkeit aus. Im Folgenden finden Sie die entsprechenden Daten zum Stichtag 14.04.2017._x000D_ The Chair of Financial Management at HHL Leipzig Graduate School of Management publishes on a quarterly basis multiples, beta factors, and cost of capital for German industries. The information is available on the website http://www.finexpert.info/ and in the professional journal CORPORATE FINANCE. The data is characterized by transparency and traceability; the details of the used calculation methods can be reviewed in „Multiples und Beta-Faktoren für deutsche Branchen – Erläuterungen zu den Kapitalmarktdaten von http://www.finexpert.info/ und CORPORATE FINANCE“ in CFB 7/2011 p. 430 (434).

This paper presents a first examination of how private equity (PE) fund managers actively develop their portfolio companies through so-called “buy-and-build” strategies (B&B), in which a portfolio company serves as a platform for add-on acquisitions. We argue that, because of holding period constraints, PE fund managers face a trade-off between the quantity and complexity of add-on acquisitions. Thus, in comparison to their peers, portfolio companies could do more, but similar, acquisitions (the “boost hypothesis”) or as many, but different, acquisitions (the “transformation hypothesis”). Using a control group of non-PE-owned companies, we find strong support for the “boost hypothesis.” Difference-in-differences estimates show that the probability of an acquisition is almost doubled after PE entry. However, we find no statistically significant differences in the complexity of acquisitions between PE- and non-PE-owned firms. This holds true for several complexity measures of domestic and cross-border acquisitions. Finally, we iestigate whether buyers pay a premium for this acquisition boost. We find that deals with B&B yield significantly higher multiples at exit, with this effect being driven largely by cross-border B&B strategies._x000D_ Keywords: Buy and build, cross border acquisition, internationalization, private equity_x000D_ JEL Classification: G24, G3

Increasing holding periods are a notable trend in private equity and a concern to limited partners because they tie up committed capital. I iestigate whether the frequent use of Buy and Build (B&B) strategies can explain this trend. I find that B&B increases holding periods by up to 29%, which is robust to different identification strategies including the application of a survival-time treatment effect estimator. Further iestigating channels through which B&B increases holding periods, I identify factors that can mitigate but not avoid prolongation. Thus, my findings point at increasing illiquidity risk as an unintended "dark side" of B&B strategies._x000D_ Keywords: Private equity, buyout, M&A, buy and build, holding period, duration_x000D_ JEL Classification: G11, G23, G24, G34

Der Lehrstuhl Finanzmanagement und Banken an der HHL Leipzig Graduate School of Management ermittelt vierteljährlich Multiplikatoren, Beta-Faktoren und Eigenkapitalkosten für den deutschen Kapitalmarkt und stellt diese auf der Internetseite www.finexpert.info und in CORPORATE FINANCE zur Verfügung. Die Daten zeichnen sich durch Transparenz und Nachvollziehbarkeit aus. Im Folgenden finden Sie die entsprechenden Daten zum Stichtag 14.10.2016._x000D_ The Chair of Financial Management at HHL Leipzig Graduate School of Management publishes on a quarterly basis multiples, beta factors, and cost of capital for German industries. The information is available on the website www.finexpert.info and in the professional journal CORPORATE FINANCE. The data is characterized by transparency and traceability; the details of the used calculation methods can be reviewed in „Multiples und Beta-Faktoren für deutsche Branchen – Erläuterungen zu den Kapitalmarktdaten von www.finexpert.info und CORPORATE FINANCE“ in CFB 7/2011 p. 430 (434).

Der Lehrstuhl Finanzmanagement und Banken an der HHL Leipzig Graduate School of Management ermittelt vierteljährlich Multiplikatoren, Beta-Faktoren und Eigenkapitalkosten für den deutschen Kapitalmarkt und stellt diese auf der Internetseite www.finexpert.info und in CORPORATE FINANCE zur Verfügung. Die Daten zeichnen sich durch Transparenz und Nachvollziehbarkeit aus. Im Folgenden finden Sie die entsprechenden Daten zum Stichtag 15.07.2016. Die Details der Berechnung sind im Artikel „Multiples und Beta-Faktoren für deutsche Branchen – Erläuterungen zu den Kapitalmarktdaten von www.finexpert.info und CORPORATE FINANCE“ in CFB 2011 S. 430 nachzulesen._x000D_ The Chair of Financial Management at HHL Leipzig Graduate School of Management publishes on a quarterly basis multiples, beta factors, and cost of capital for German industries. The information is available on the website www.finexpert.info and in the professional journal CORPORATE FINANCE. The data is characterized by transparency and traceability; the details of the used calculation methods can be reviewed in „Multiples und Beta-Faktoren für deutsche Branchen – Erläuterungen zu den Kapitalmarktdaten von www.finexpert.info und CORPORATE FINANCE“ in CFB 7/2011 p. 430 (434).