Challenges in buy and build transactions

Buy and build stra­te­gies (lever­a­ged build-up, stra­te­gic roll-up) are part of the active port­fo­lio manage­ment of private equity (PE) compa­nies. In this context, PE houses specia­lize in speci­fic, usually highly frag­men­ted indus­tries. Often a buyout tran­sac­tion is carried out with a larger company (plat­form invest­ment). Subse­quently, one or more smal­ler compa­nies (add-ons) from the same indus­try are acqui­red and merged into one corpo­rate entity.