easy · Private Equity value-creation
A sponsor acquires a platform company for 10.0x EBITDA and then acquires an add-on company for 6.0x EBITDA.
What is this strategy called, and what is the primary objective?
- Vertical Integration; to acquire a supplier or customer in the value chain.
- Organic Growth; to increase the company's market share through internal expansion.
- Multiple Arbitrage; to lower the blended entry multiple and increase the exit MOIC.
- Leveraged Recap; to return capital to investors without selling the platform.
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