Assisting Acquirers

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September 24, 2022

by a searcher from Dartmouth College in Los Angeles, CA, USA

Is the preferred play to go after a single target or bundle several similar businesses and roll them up into a series of acquisitions?

I've been working with a PE firm to position their bootstrapped assets for acquisitions and was curious if people are going after the whale or also have an appetite for rounding up smaller fish.

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Reply by a searcher
from University of Texas at Austin in Dallas, TX, USA
One of the challenges of a roll up is you have to have the same equity in each tuck in acquisition. If your LPs are different, then you have a valuation issue you have to solve. If you can solve this piece, then I think a roll up could be a viable option.
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Reply by an intermediary
from Vanderbilt University in Glen Mills, PA, USA
So many variables in this scenario - Scale, geography, market size/type. Most HC deals I see prefer single targets with established reach - avoids integration headaches from many smaller practices
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