A bolt-on acquisition is a smaller purchase folded into an existing platform investment — financed, integrated and operated through the platform rather than standing on its own — to add scale, geography or a capability the platform did not already have.
Because a bolt-on is acquired “together with” the platform’s affiliates, Canada’s Competition Act measures notifiability against the whole group, not the bolt-on alone. The party-size test looks at assets in Canada or Canada-sourced revenue exceeding $400 million across the buyer group and its affiliates (Competition Act s.109(1)); the transaction-size test was enacted at $70 million and is adjusted annually against nominal GDP (s.110(7)–(8)); and a share acquisition only becomes notifiable once the buyer’s resulting stake would cross 20% of a publicly traded target, 35% of a private one, or 50% if already above those levels (s.110(3)(b)).
A platform running several bolt-ons should also mind the no-poach rule: agreeing with an unaffiliated employer not to solicit or hire each other’s staff is a criminal offence under Competition Act s.45(1.1), carrying up to 14 years’ imprisonment on conviction (s.45(2)). A genuine non-solicit written into a bolt-on’s own purchase agreement can rely on the ancillary restraints defence in s.45(4) — a restraint “directly related to and reasonably necessary” for a real transaction between the same parties — but an informal understanding between two still-separate employers cannot.
A platform with $220,000,000 of group assets in Canada and no other affiliate revenue considers a $6,000,000 bolt-on. Because the group’s assets sit well under the $400,000,000 party-size threshold, and the deal is far under the enacted $70,000,000 transaction-size figure, the acquisition is not notifiable under Part IX of the Act — but the sponsor still writes its non-solicit directly into the purchase agreement rather than relying on a verbal understanding, so the restraint is anchored to the transaction itself and can claim s.45(4)’s ancillary restraints defence if it is ever challenged.
See also: Platform investment · Multiple arbitrage · The 100-day plan for a new platform investment.
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