bolt-on acquisition

Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions

by Joshua Rosenbaum, Joshua Pearl and Joseph R. Perella  · 18 May 2009  · 444pp  · 86,565 words

capital structure. At the same time, the sponsor aims to improve the financial performance of the target and grow the existing business (including through future “bolt-on” acquisitions), thereby increasing enterprise value and further enhancing potential returns. An appropriate LBO financing structure must balance the target’s ability to service and repay debt

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to perform independent studies analyzing market share and barriers to entry. Growth Opportunities Sponsors seek companies with growth potential, both organically and through potential future bolt-on acquisitions. Profitable top line growth at above-market rates helps drive outsized returns, generating greater cash available for debt repayment while also increasing EBITDA and enterprise

Valuation: Measuring and Managing the Value of Companies

by Tim Koller, McKinsey, Company Inc., Marc Goedhart, David Wessels, Barbara Schwimmer and Franziska Manoury  · 16 Aug 2015  · 892pp  · 91,000 words

• Attract new customers to the market • Gain market share in fast-growing market • Competitors can still grow despite losing share; moderate risk of retaliation • Make bolt-on acquisitions to accelerate product growth • Modest acquisition premium relative to upside potential • Gain share from rivals through incremental innovation • Gain share from rivals through product promotion

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able to do the same thing since. There are two main approaches to growing through acquisitions. Growth through bolt-on acquisitions can create value if the premium paid for the target is not too high. Bolt-on acquisitions make incremental changes to a business model—for example, by completing or extending a company’s product offering

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primarily from cost cutting, not from growth. Furthermore, integrating the two companies requires significant investments and involves far more complexity and risk than integrating small, bolt-on acquisitions. The logic explaining why growth from product market growth creates greater and more sustainable value than taking share is compelling. Nevertheless, the dividing line between

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customers to buy more of it also can create substantial value, because direct competitors in the same market tend to benefit as well. Growth through bolt-on acquisitions can add value, because such acquisitions can boost revenue growth at little additional cost and complexity. Typically, much less attractive is revenue growth from market

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a mature market or a low-ROIC company in a fastgrowing market? Give reasons for your answer. 3. Why could growth through a series of bolt-on acquisitions create more value than growth through a single large acquisition? (Consider premium paid and synergies created for each individual transaction.) 4. Identify and discuss an

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, 387–388 industry beta, 300–301 levered, 838–839 market portfolio, 293–297 smoothing, 299 unlevered, 301–303 Black, Fischer, 165 Black-Scholes value, 330 Bolt-on acquisitions, 123 Bond ratings, 304–306 Bonds, government, 304–307 Bottom-up forecasting, 235–236 Bubbles, 68–69. See also Financial crises C Cadbury, 640 Capital

Winning Now, Winning Later

by David M. Cote  · 17 Apr 2020  · 297pp  · 93,882 words

of investments we were seeking to make to grow our portfolio. To find the best opportunities, our business units at Honeywell sought to identify desirable bolt-on acquisitions for existing businesses of ours (companies that made the kinds of products that our businesses did), and to identify good industries that were closely adjacent

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on your door with potential deals. Instead, scour the market proactively. •Seek out businesses that have great positions in good, high-growth industries. •Look for bolt-on acquisitions as well as companies in good industries adjacent to yours. •Not all perceived adjacencies are the same. If the adjacency is too far removed from

Corporate Finance: Theory and Practice

by Pierre Vernimmen, Pascal Quiry, Maurizio Dallocchio, Yann le Fur and Antonio Salvi  · 16 Oct 2017  · 1,544pp  · 391,691 words

may take the form of an internal growth strategy by geographical or product extension, a successful redundancy or cost-cutting plan or a series of bolt-on acquisitions in the sector. Size is important if flotation is the goal, because small companies are often undervalued on the stock market, if they manage to

Lessons from the Titans: What Companies in the New Economy Can Learn from the Great Industrial Giants to Drive Sustainable Success

by Scott Davis, Carter Copeland and Rob Wertheimer  · 13 Jul 2020  · 372pp  · 101,678 words

to Thomson, in return for its medical diagnostic business and $800 million in cash. Welch then invested the excess cash in both internal research and bolt-on acquisitions, specifically focused on diagnostics, which became the mainstay of GE Healthcare. That division grew from $1 billion in revenues in 1987 to more than $8

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and simple but required a level of change the board struggled with. Many board members flat-out rejected the notion that anything other than smaller bolt-on acquisitions were needed. Several other board members wanted Roper to stick to its core and roll up other pump assets. Beyond the unconventional M&A strategy

Dual Transformation: How to Reposition Today's Business While Creating the Future

by Scott D. Anthony and Mark W. Johnson  · 27 Mar 2017  · 293pp  · 78,439 words

have approval to make ten more hires? Or that we’re about to launch a venture capital fund to get an early look at other bolt-on acquisitions?” “How would he know any of those things?” Bernadette says, her voice rising a notch. “This is the first I’m hearing about them!” “That

Two and Twenty: How the Masters of Private Equity Always Win

by Sachin Khajuria  · 13 Jun 2022  · 229pp  · 75,606 words

attributes of the investment. The company has a strong franchise, with high and stable market share and leading chemical products. Opportunities to grow include executing bolt-on acquisitions and investing in compelling new niches with high-growth potential, such as recycled and biodegradable products. Despite the reductions in headcount, deeper layers of fat

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. It requires partnering with management teams and independent non-executive directors. It involves transforming and improving the operations of target companies, which may involve making bolt-on acquisitions and executing organic growth initiatives. It involves financing and refinancing investments opportunistically when interest rates and other terms are compelling. It involves exiting well and

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during the agreement? When is it renewed and on what terms? Where can we improve costs? Are there other tower assets we can buy as bolt-on acquisitions after this deal closes? Debates raged over assigning a different cost of capital to contracted versus optional revenue, over secure versus potential cash flow. And

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated

by Gautam Baid  · 1 Jun 2020  · 1,239pp  · 163,625 words

of the catch [emphasis added].”18 Big-ticket (often touted as “transformational”) M&As have low base rates of success, whereas smaller, tuck-in, or bolt-on acquisitions that share similar areas of activity have higher base rates of success. In general, M&As have a higher chance of creating value when they

Quality Investing: Owning the Best Companies for the Long Term

by Torkell T. Eide, Lawrence A. Cunningham and Patrick Hargreaves  · 5 Jan 2016  · 178pp  · 52,637 words

but there are several notable examples of successes. For example, Essilor, a global leader in making lenses for eyeglasses, has a long history of small bolt-on acquisitions. Individually insignificant, these have become material in aggregate, adding more than 3% in annual sales per year for the last decade. These purchases are most

Concentrated Investing

by Allen C. Benello  · 7 Dec 2016

build Berkshire’s per‐share intrinsic value by (1) constantly improving the basic earning power of our many subsidiaries; (2) further increasing their earnings through bolt‐on acquisitions; (3) benefiting from the growth of our investees; (4) repurchasing Berkshire shares when they are available at a meaningful discount from intrinsic value; and (5

The Wisdom of Finance: Discovering Humanity in the World of Risk and Return

by Mihir Desai  · 22 May 2017  · 239pp  · 69,496 words