Built to Sell, Priced to Perfection? Buy-and-Build Private Equity IPOs and Post-Listing Performance in the Nordic Region

Abstract

The buy-and-build strategy of acquiring a platform company and expanding it through programmatic add-on acquisitions has become a substantial share of European PE activity, accounting for over a third of transactions in recent samples, and sponsors pay sizable premiums for established platforms. How public markets price these platforms at IPO is less well understood. On a hand-collected sample of 140 Nordic PE-backed IPOs over 2000–2025, we test whether buy-and-build IPOs earn abnormal returns relative to operationally-focused ones in the days post-listing, in the months that follow, and in the operational trajectory after listing. Buy-and-build IPOs earn a 2.10 percentage-point cumulative abnormal return premium in the first three trading days post-listing, robust across nine of eleven pre specified specifications. The premium disappears at 6, 12, and 24-month horizons, and two-year operational growth does not differ between groups. The pattern is more consistent with a categorical than a linear-intensity response, since a continuous add-on count does not predict returns at any horizon, though limited statistical power and measurement error in add-on counts prevent a definitive rejection of gradient pricing. The effect is concentrated in the post-2015 era, with the pre-2015 cell underpowered. Nordic public markets appear to identify buy-and-build as a distinct strategy in the days after listing, while offering no evidence of exploitable long-run alpha. We read this as evidence on post listing price-discovery dynamics rather than on the offer-price level, which our empirical design does not directly model.