Private Equity as Strategic Buyers

68 Pages Posted: 12 Aug 2020 Last revised: 14 Oct 2022

See all articles by Dyaran Bansraj

Dyaran Bansraj

affiliation not provided to SSRN

Han Smit

Erasmus University Rotterdam (EUR)

Vadym Volosovych

Erasmus University Rotterdam (EUR); Tinbergen Institute

Multiple version iconThere are 2 versions of this paper

Date Written: September 30, 2022

Abstract

We provide evidence of changes in the private equity (PE) business model from the traditional PE engineering toward focus on growth using the buy-and-build strategies as a setting. In these strategies, a PE firm buys a company and builds on that ``platform” through serial ``add-on" acquisitions. Our novel decomposition methodology compares the combined entities instead of individual firms, and uses artificial replicating strategies as controls. While the traditional engineering practices remain important for growth and efficiency, we demonstrate a new channel of operational improvements, based on synergies between companies.

Keywords: Private Equity, Leveraged Buyouts, Buy-and-Build, Operating Performance, Synergies

JEL Classification: G23, G34, L25

Suggested Citation

Bansraj, Dyaran and Smit, Han and Volosovych, Vadym, Private Equity as Strategic Buyers (September 30, 2022). Available at SSRN: https://ssrn.com/abstract=3651411 or http://dx.doi.org/10.2139/ssrn.3651411

Dyaran Bansraj

affiliation not provided to SSRN

Han Smit

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Vadym Volosovych (Contact Author)

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
Room E2-31
3000 DR Rotterdam, 3062PA
Netherlands
+31 10 408 1286 (Phone)
+31 10 408 9165 (Fax)

HOME PAGE: http://https://www.eur.nl/people/vadym-volosovych/

Tinbergen Institute

PO Box 1738
Room E2-31
Rotterdam, 3000 DR
Netherlands
+31 10 408 1286 (Phone)
+31 10 408 9165 (Fax)

HOME PAGE: http://https://www.tinbergen.nl/person/1407/vadym-volosovych

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