Ultimate Survival: Private Equity Buy & Build Strategies

This thesis aims to examinethe impact of the complexity of the buy-and-build strategy on the duration and the type of exit. The thesis differentiates in the way complexity is determined by the nature of the B&B strategy, making a distinctionbetween cross-border and domestic strategies, industry penetrating and diversifying strategies, the number off add-ons and the distance between the platform firm and the add-ons. Furthermore, country specific factors are included. These factors relate to the GDP per capita, country investment attractiveness, institutional quality, and differences in cultural values. Additionally, exit market conditions, such as the number of IPO and M&A transactionsare taken into account. The sample comprises worldwide B&B strategy acquisitions made by platform firmslocated in Europebetween 1997 and 2019. In order to examine the effect of the complexity of the B&B strategy on the duration and the corresponding exit type, a parametric accelerated failure time analysis is used. The results indicate that the proposed measures of complexity areveryrelevant for the duration of the B&B strategy and the subsequent exit.