The study “Buy-and-Build Strategy: Evidence from a Survey of Private Equity General Partners” conducted by Michele Lertora and Anna Gervasoni (a postdoc and a full professor as well as the university’s rector, respectively), analyses inorganic growth strategies implemented by private equity firms through mergers and acquisitions (M&A). The analysis is based on a survey of 77 Private Equity professionals.
The buy-and-build strategy involves a Private Equity fund acquiring a company that serves as a “platform” for subsequent acquisitions, known as add-on acquisitions. This approach aims to create larger corporate entities and generate operational synergies. One key objective is to acquire smaller companies at a lower EBITDA multiple than what the group achieves upon exit.
The sectoral consolidation activities undertaken by Private Equity operators contribute to the development of more structured and resilient companies, enabling small and medium-sized enterprises (SMEs) to enhance their efficiency and attract skilled talent.
