Value Creation Levers in Primary and Secondary Buyouts: An Empirical Study of Performance Differences and Strategic Mechanisms in the Nordic and UK Private Equity Market

Abstract

This thesis investigates whether, and how, performance differs between primary buyouts (PBOs) and secondary buyouts (SBOs), and which value creation mechanisms underlie these differences. In the context of private equity’s growing reliance on SBOs (where one PE firm acquires a company from another) the study explores whether secondary owners can create incremental value or merely extend prior strategies. Using a mixed-methods approach, the analysis tests ten hypothesis through t-tests and OLS regression models by combining quantitative data from 130 UK and Nordic transactions involving 65 companies that experienced both a PBO and a subsequent SBO in the timeframe 2006-2022. With qualitative insights from six interviews with PE professionals, this design enables a direct comparison of performance outcomes across ownership cycles, as the analysis focuses on matched PBO-SBO pairs for the same companies, while also contextualising strategic behaviour through practitioner perspectives. The results offer a nuanced answer. Quantitatively, two hypotheses were supported: PBOs achieved significantly higher revenue growth, while SBOs exhibited stronger net working capital efficiency in the early years of ownership. These findings persist after control variables are accounted for suggesting that ownership phase influences how and where value is created. However, no systematic differences were found in broader the remaining eight hypothesis, possibly due to the difficulty of capturing short-term profitability, moreover the limited time horizon (Y-1 to Y2), sector and size related complexity, changing PE practices over time, and value creation not being observable through probability metrics. Qualitatively, the study finds that PBOs and SBOs are not fixed stages in a linear value journey but reflect context-specific strategies shaped by asset maturity, fund capabilities, and deal timing. SBOs often represent refined platforms rather than strategic reinventions, and value creation depends on how well the investor’s strategy aligns with the company’s development stage. Ultimately, the thesis concludes that performance differences between PBOs and SBOs are limited, context-dependent, and driven more by strategic fit than by buyout category alone.