Glossary

Platform Company

A large company (i.e., platform company), that is used as the foundation to acquire and add onto smaller companies (also known as add-on or bolt-on acquisitions) by a private equity firm or strategic buyer, complimenting the acquirer’s business model.

See Also

Tuck-in acquisition, private equity group.

Tips

Private equity groups often purchase a larger, or platform, company in an industry and then make a series of smaller acquisitions that are added onto the platform company. These additions are known as add-on acquisitions. Strategic buyers also pursue a similar strategy when they are attempting to consolidate an industry. An add-on acquisition usually only adds a few specific skills or capabilities to the platform company, such as a new product or geographic market. Add-on acquisitions have accounted for 60% to 70%+ of all private equity transactions over the last few years.

Related Resources

Why do companies acquire other businesses?

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