Does anyone have experience in wholesale distribution rollup?

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September 20, 2023

by a searcher from Duquesne University in Pittsburgh, PA, USA

Hi All, I am an entrepreneur and self-funded searcher, while simultaneously running a small wholesale distribution business with a robust cash flow. I would like to receive some ideas and suggestions for scaling the existing business.

We're interested in executing a rollup strategy to consolidate small independent wholesale distributors in the segment. Our thesis is to acquires multiple small wholesale businesses to create a larger, more efficient, and more competitive platform entity. The thesis is already validated. Recently, two of our competitors have successfully done consolidations to achieve economies of scale. Our goal is very similar in achieving economies of scale, streamline operations, reducing costs, and increasing market share. The industry segment is currently very fragmented and there are many small players interested in finding a group to partner with. The plan is to have 4 or 5 additional independent distributors under LOIs all together for a bolt-on acquisition. The estimated revenue for all these combined would be around $10 million with an EBITDA of $2.5 million. I'm looking for an investment partner to help in bolting this initial group to our one location to start a platform base.

Any ideas on how to find a suitable investment partner and structure the deal? Please feel free to comment with your thoughts on this matter. If you have an interest in discussing further, please leave your email address. Thank you for the input!

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Reply by a searcher
from Duquesne University in Pittsburgh, PA, USA
Hi ^redacted‌ - Are you still open to offering some strategy help for finding an investment partner?
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Reply by a searcher
from Southern Methodist University in Dallas, TX, USA
Pete - I have executed this strategy in wholesale distribution just at a larger scale - I can't help you on investment partners but open to talking strategy
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