Buy-and-Build

Buy-and-build refers to a growth strategy in which a platform company is expanded in a targeted manner through the acquisition of further companies (so-called ‘add-ons’). The aim is to realise synergies, to gain market share and economies of scale, and to achieve a so-called multiple arbitrage: acquiring smaller add-ons at lower multiples while the consolidated platform is valued at a higher multiple.

The strategy is pursued above all by private equity investors in fragmented sectors and places high demands on buyers’ post-merger integration (PMI) capabilities.