‘Do Private Equity Firms Pay for Synergies?’

BVWireIssue #193-1
October 3, 2018

M&A valuations
mergers and acquisitions (M&A), private equity

That’s the title of a recent paper that analyzed the pricing of 1,155 global PE buyouts and found “strong support” for a valuation effect from buy-and-build strategies. “Our results indicate that PE sponsors pay a premium of up to 47% at entry when the portfolio company acquires add-ons in the same industry within a two-year time window after the buyout,” say the authors.
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