PE Add-On Activity

Add-ons represent a larger portion of PE firm acquisitions every year, reaching 56% in 2016. Properly analyzed add-on acquisitions can bring a host of synergies to the acquiring company, such as expanding sales into new markets, growing product portfolios, and centralizing finance solutions. For the add-on company, the acquisition can bring high level management, marketing, and operational improvements that were not accessible before.

As with any acquisition, add-ons pose their own difficulties. Increased portfolio complexity, personnel integration, as well as portfolio strategy selection and execution, are common challenge areas encountered by PE firms.