With more than a trillion dollars of dry powder waiting to be put to work, buyers are eager to identify and close new deals in order to put capital to work. But as valuations have risen and EBITDA multiples have flattened, it has become essential that funds adopt a structured plan for implementing operational improvements and value creation at their portfolio companies.

Under these conditions, platform roll-ups have become an important tool in building portfolio value. But a platform is more than a collection of companies in the same general business. Building a successful platform requires rigorous planning and diligence and careful selection of add-on acquisitions based on deliberate and structured diligence and post-merger integration plans.

Conversely, without careful integration planning and implementation, a platform is no more valuable that the collection of assets that was acquired.

The Investment Thesis

Planning a platform starts after formulating an investment thesis. The thesis generally determines that value can be created in some largely fragmented industry by combining one or more of its players. It’s important to remember that […]