When a private equity firm builds around a primary company, what is this primary company called?

The term "Platform Company" is used to describe the primary company around which a private equity firm builds its investments and operations. This designation reflects the company's central role in the firm’s investment strategy, serving as the foundational entity for scaling the business and generating additional revenue.

A platform company typically has a robust operational structure, a well-established market presence, and the potential for growth. Private equity firms leverage such companies to facilitate add-on acquisitions, which are smaller firms that complement or enhance the platform's offerings. This strategy allows for synergies in operations, marketing, and distribution, ultimately aiming to increase the overall value of the platform company.

While the other terms like "Core Business," "Anchor Company," and "Foundation Company" may convey the importance of a principal entity within a business context, they do not specifically align with the terminology commonly used in private equity to describe this model. The term "platform company" distinctly signifies the strategic role it plays in the private equity firm's portfolio for expansion and enhancement through complementary acquisitions.