What Does Tuck-In Acquisition Mean?
A tuck-in acquisition refers to a company that is acquired by a platform company that is usually backed by private equity. The term, tuck-in, refers to the idea that the acquisition is being "tucked in" under the infrastructure of the platform company.
When private equity enters a market, it may do so by acquiring a larger company with management and infrastructure capable of absorbing other smaller players. This larger company serves as the platform, and then tuck-in acquisitions are completed to add to the geographic footprint or add complementary services or technology. Tuck-in acquisitions usually have a strong owner, but limited management depth or administrative resources to continue growing, which makes them ideal for larger platform companies to absorb.