medium · Private Equity value-creation
A healthcare platform is acquired for $200M (10x EBITDA). The GP executes a 'Buy-and-Build' strategy, acquiring three smaller practices for a total of $60M (6x EBITDA).
If the combined entity is sold at the original 10x multiple, how much value was created solely through multiple arbitrage?
- $40M
- $60M
- $24M
- $100M
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