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Beyond Borders in Private Equity A quantitative study unveiling the drivers of return in cross-border buy-and-build strategies

Nordén, Anton LU ; Nordström, Bror LU and Borg, Elias LU (2024) IBUH19 20241
Department of Business Administration
Abstract
The aim of this thesis is to determine what drives the return in cross-border buy-and-build (B&B) strategies, and if the drivers and the return generated in cross-border B&B strategies differ from those in domestic strategies. Drawing upon prior research of B&B strategies and cross-border M&A, the thesis provides an overview of the current studies on value drivers in private equity, and B&B strategies, with an additional focus on implications of cross-border M&As. To test the hypotheses, a quantitative study with a deductive approach was employed. Variables were constructed using secondary data from Orbis M&A, together with supplementary data from additional sources. The conducted analysis indicates that cross-border B&Bs generate higher... (More)
The aim of this thesis is to determine what drives the return in cross-border buy-and-build (B&B) strategies, and if the drivers and the return generated in cross-border B&B strategies differ from those in domestic strategies. Drawing upon prior research of B&B strategies and cross-border M&A, the thesis provides an overview of the current studies on value drivers in private equity, and B&B strategies, with an additional focus on implications of cross-border M&As. To test the hypotheses, a quantitative study with a deductive approach was employed. Variables were constructed using secondary data from Orbis M&A, together with supplementary data from additional sources. The conducted analysis indicates that cross-border B&Bs generate higher returns than their domestic counterparts. Cross-border B&B results in greater multiple expansion, which could be attributed to the associated complexity premium. For operating improvements, no notable differences were found between domestic and cross-border B&Bs. However, operating improvements were found to be the primary drivers of return in cross-border B&Bs, indicating the importance of synergistic effects between add-ons. By replicating this thesis using proprietary data, the generalisability of these findings could be increased, thus contributing to a deeper understanding of cross-border B&B strategies. (Less)
Popular Abstract
The aim of this thesis is to determine what drives the return in cross-border buy-and-build (B&B) strategies, and if the drivers and the return generated in cross-border B&B strategies differ from those in domestic strategies. Drawing upon prior research of B&B strategies and cross-border M&A, the thesis provides an overview of the current studies on value drivers in private equity, and B&B strategies, with an additional focus on implications of cross-border M&As. To test the hypotheses, a quantitative study with a deductive approach was employed. Variables were constructed using secondary data from Orbis M&A, together with supplementary data from additional sources. The conducted analysis indicates that cross-border B&Bs generate higher... (More)
The aim of this thesis is to determine what drives the return in cross-border buy-and-build (B&B) strategies, and if the drivers and the return generated in cross-border B&B strategies differ from those in domestic strategies. Drawing upon prior research of B&B strategies and cross-border M&A, the thesis provides an overview of the current studies on value drivers in private equity, and B&B strategies, with an additional focus on implications of cross-border M&As. To test the hypotheses, a quantitative study with a deductive approach was employed. Variables were constructed using secondary data from Orbis M&A, together with supplementary data from additional sources. The conducted analysis indicates that cross-border B&Bs generate higher returns than their domestic counterparts. Cross-border B&B results in greater multiple expansion, which could be attributed to the associated complexity premium. For operating improvements, no notable differences were found between domestic and cross-border B&Bs. However, operating improvements were found to be the primary drivers of return in cross-border B&Bs, indicating the importance of synergistic effects between add-ons. By replicating this thesis using proprietary data, the generalisability of these findings could be increased, thus contributing to a deeper understanding of cross-border B&B strategies. (Less)
Please use this url to cite or link to this publication:
author
Nordén, Anton LU ; Nordström, Bror LU and Borg, Elias LU
supervisor
organization
course
IBUH19 20241
year
type
M2 - Bachelor Degree
subject
keywords
private equity, buy-and-build, cross-border, multiple expansion, operating improvements, value creation
language
English
id
9160264
date added to LUP
2024-08-07 17:48:21
date last changed
2024-08-07 17:48:21
@misc{9160264,
  abstract     = {{The aim of this thesis is to determine what drives the return in cross-border buy-and-build (B&B) strategies, and if the drivers and the return generated in cross-border B&B strategies differ from those in domestic strategies. Drawing upon prior research of B&B strategies and cross-border M&A, the thesis provides an overview of the current studies on value drivers in private equity, and B&B strategies, with an additional focus on implications of cross-border M&As. To test the hypotheses, a quantitative study with a deductive approach was employed. Variables were constructed using secondary data from Orbis M&A, together with supplementary data from additional sources. The conducted analysis indicates that cross-border B&Bs generate higher returns than their domestic counterparts. Cross-border B&B results in greater multiple expansion, which could be attributed to the associated complexity premium. For operating improvements, no notable differences were found between domestic and cross-border B&Bs. However, operating improvements were found to be the primary drivers of return in cross-border B&Bs, indicating the importance of synergistic effects between add-ons. By replicating this thesis using proprietary data, the generalisability of these findings could be increased, thus contributing to a deeper understanding of cross-border B&B strategies.}},
  author       = {{Nordén, Anton and Nordström, Bror and Borg, Elias}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Beyond Borders in Private Equity A quantitative study unveiling the drivers of return in cross-border buy-and-build strategies}},
  year         = {{2024}},
}