ROLL-UP SUCCESS OR HORROR STORIES
I’m considering a roll-up strategy for a couple related businesses in the food space that fit strategically and will scale well when combined. But the M&A community seems to be divided on roll-ups. I’d like to hear from others where and how they’ve had meaningful success and/or losses with roll-ups.
related posts:
read more
read more
read more
^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted]
Most roll-ups fail. That is objectively true. However when they do work? they work astoundingly well in creating value.
Though it is also good to be clear, are you talking about a roll-up or growth through acquisition? The difference being that growth through acquisition would be purely strategic acquisitions as you could not transplant the operating model from one to the other for optimal financial performance.
A roll up, on the other hand, is more of a process
Successful roll-ups have high equity infusion in early stages, high unit profit margin, regulated environment, low re-investment intensity for growth, tailwind for industry growth or tech driving the changes, fragmented industry, etc.
I have also seen successful roll-ups with low equity. In these case, buyer quickly impr
"we are active in the business. "
My question - "how active" . It certainly will be difficult to find a deal and also run the business. Since you mentioned you have a good cash flow now, can you appoint an operating officer? That will free up your time and mind to better focus on analyzing deals.
Culture change and adaptation is always going to be a challenge since we will be dealing with humans unless your business can b
My recollection of that study is that roll-ups tend to fail because of 1) financial leverage + recession/operational issue, and 2) lack of "return
A variation in expected acquisition multiples vs actual market multiples.
Competitive landscape of other acquirers in the same niche.
Lack of sophistication and motivation by sellers in the market.
I'm sure these could have been flushed out with better due diligence, but hindsight is[redacted]I liked the comment about "rollup potential" not being a good enough reason to buy a company alone. My me, the primary target needs to be attractive enough on it's