Rollup insights

by a searcher from Miami University of Ohio

Oct 21,2020

I am looking of someone with roll up experience to help me out with deal structure, valuation, and some insights.   Here is our situation:

We have 7 home automation installation companies based in Spain interested in merging to create a company with about 14€ million in sales.  Our pitch is that we will allow them to continue working as subsidiaries, and push the business out with a franchising model, along with acquiring more businesses to expand the geography.  

) How would you value them (each does about###-###-#### million EBITDA).  Do we give a better valuation to whoever jumps first.

) How would you structure the new board, and still give each owner a feeling of decision making power?

) Would you structure an earn out early on to let them take chips off the table. 

) Would you elevate one of the owners to CEO, or hire outside?

) What would be your main selling point to any owner who is on the fence?

8 likes
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21 comments

investor from University of Rochester - William E. Simon Graduate School of Business

That does sound like quite a bit of execution risk to handle at once. I would try to focus on acquiring the strongest player you can first. Much easier to add to a solid platform vs, trying to build on a questionable foundation.

05/08/2022 | like reply | 0 likes

searcher from Embry-Riddle Aeronautical University

I agree with Ben. You often have to interview a few "Seed" Rollup organizations at a time, Then consider the non-seeds as part of rollup. This can be a lot of fun, Once you find the seed, things seem to go quickly from there. Stay away from the BAD seeds, they can sink the ship.;

01/04/2021 | like reply | 5 likes

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