Roll-up strategy
November 05, 2022
by a searcher from Rutgers-The State University of New Jersey-Newark/New Brunswick - Rutgers Business School in St Paul, MN, USA
In a roll-up strategy, do you keep each acquired entity separately with its own EIN, etc... or do you totally absorb it into the acquirer (parent) entity?
I have an opportunity to acquire 3 small companies in my space but not sure how to effectively execute the strategy. Any advice is highly valued and appreciated.
from Brigham Young University in Dallas, TX, USA
- you feel better when you look at the structure chart
Consolidating Con
- it could trigger a bunch of customer payment or contract moves that are administratively burdensome or may cause business disruption
You won’t really be able to get an answer to this question answered except by your lawyers. Generally the answer is that the complexity of retaining EINs doesn’t typically cause any problems on a day to day basis OR even when selling the business. That said, there may be better or worse ways to do it based on tax and business implications. I was a part of a massive roll up and retaining the EINs was crucial so we didn’t trigger a bunch of client consents and administrative work to change where client receipts were sent.
from University of Waterloo in Toronto, ON, Canada
A pro is that you can give yourself a bit more time with integration, bank accounts, employment agreements, etc. If you do an asset deal, a lot of that needs to be done Day 1