In a market with soaring multiples, private equity buyers are increasingly on the hunt to mitigate high valuations by acquiring platform companies from which they can pursue add-ons at materially lower multiples and with the potential for synergies. And given the current seller-friendly market, sellers are increasingly seeking to receive premiums for platform companies with add-on potential. In this article, we summarize the complexities that often arise in addressing the potential or pending acquisition of an add-on target (the “Add-On”) in a definitive acquisition agreement for a target platform company (the “Target”) and the principal methods used by buyers and sellers in recent transactions to address such complexities. 

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