What is bolt-on acquisition?

Bolt-on acquisition refers to the acquisition of smaller companies, usually in the same line of business, that presents strategic value. This is in contrast to primary acquisitions of other companies which are generally in different industries, require larger investments, or are of similar size to the acquiring company.

What are the risks of tuck-in and bolt-on acquisitions?

The risks for both tuck-in and bolt-on acquisitions are largely the same as those for any acquisition, albeit usually on a smaller scale. Although their names suggest that these types of acquisitions can simply be added onto a company without any form of integration, that isn’t the case.

What percentage of private equity firms expect a bolt-on buy?

According to a recent survey, 97 percent of private equity firms expect at least one in four of the companies in their portfolio to undertake a bolt-on buy prior to exit. ^ "What Is a Tuck-In Acquisition?".

What is a bolt-on takeover strategy?

The Bolt-on strategy requires less paperwork than other takeover strategies. The acquirer can easily acquire small, potentially growing companies using this method. Also, this deal structure facilitates lower acquisition costs. On the flip side, the larger firm risks its reputation and brand perception.