REVERSE ROLL UP?

I recall speaking to an individual with a very unique strategy. He sources a well funded buyer who is willing to pay a premium on a multiple of EBITA for the right deal. He then targets local and regional companies with an EBITA of under $300k and consolidates them to achieve the buyer's target EBITA. All acquisitions are made at a multiple of 2.5-3x EBITA and once consolidated the group is sold at 5-7x EBITA.

The strategy as explained sounded great, maybe even something worth pursuing. Has anyone heard of/executed something similar?



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