What is described as a smaller acquisition added to an existing platform?

A bolt-on acquisition refers to a smaller acquisition that is integrated into an existing platform or business, enhancing that platform's capabilities, offerings, or market presence. This type of acquisition typically aims to complement the core business by adding new products, services, customers, or technologies, thus driving growth and increasing operational efficiency. Companies often pursue bolt-on acquisitions as a strategy to quickly scale operations, enhance market share, or enter new segments while leveraging their existing resources and management structures.

In contrast, a merger involves the combination of two companies into one entity, which can be significantly larger and often entails more complexities regarding integration. A strategic partnership typically involves an agreement between two companies to collaborate on specific projects while remaining separate. A franchise is a business model where a franchisor allows a franchisee to operate under its brand and system; this model does not inherently involve the acquisition of another business but rather focuses on brand licensing. Therefore, the distinction of bolt-on acquisitions clearly aligns with the concept of adding smaller entities to enhance an existing platform.