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Buy-and-builds as sources of returns

Buy-and-build has become an increasingly important strategy for private equity firms as a means of accelerating the growth of their portfolio companies. Javier Loizaga of Mercapital presents an overview of this approach and how it can add value for private equity investors.

The buy-and-build strategy is based on the acquisition of a platform company in a growing industry. This platform company then acquires ‘add-on' businesses to formulate a leader in its field. It is the successful creation of this ‘leading' company, or rather the added value, that will provide the eventual liquidity for the private equity investor.

Copyright © 2002 Mercapital

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Mercapital is a dedicated private equity investment group, totally independent of other industrial and financial concerns, with resources of €600 million to fund the acquistion of Spanish-based industrial and services companies.