Dealology – Top 10 Issues in Private Equity Add-On Deals

To help navigate the video, see issues and timestamps below

In September 2019, we introduced Dealology with a video on Three Key Issues in Private Equity Add-On Deals. This installment of Dealology posted here goes more in depth on those three and another seven. To complement both videos, we’ve prepared a downloadable written description covering all 10 issues. Download PDF

Private equity add-on acquisitions – the deals where a PE firm has already purchased a portfolio company in an industry or market segment and uses that investment as a platform to acquire other companies – have increased every year since 2013 and in 2018 accounted for two-thirds of all private equity deals and more than $300 billion of deal value. These deals introduce unique issues for buyers, sellers and their advisers. 

The Top 10 issues (and their timestamps) are:

  1. Where’s the money coming from (the purchase price)?  (0:57)
  2. How deep into the holding period is the add-on taking place?  (2:27)
  3. Is seller rolling over equity?  (4:09)
  4. Are the seller and key management team staying and what does retention look like?  (5:30)
  5. What does integration look like?  (7:07)
  6. Are there any special tax considerations?  (7:48)
  7. Are there any antitrust considerations?  (9:06)
  8. How did buyer and seller come together?  (9:50)
  9. Who is negotiating on each side?  (10:56)
  10. What advisors are being used?  (12:42)
Related Contacts
Eric Schwartzman Partner, San Francisco
Related Practices & Industries

Private Equity Mergers & Acquisitions