M&A Markets Turn to Roll-Ups
Small, mostly privately held entities in fragmented industries. The strategy is for the acquirer to merge with other industry players to create a larger, more sophisticated company. Key influences include:
Competitive cost pressures.
The ability to offer a broader product or service mix.
The ability to go public.
Ability to enhance technology and systems.
Diversification of customer and market risks.
Is the industry segment appropriate for this strategy?
Is the strategy more than aggregation of companies?
Are the target companies easily identified?
Dot targeted companies have a compelling reason to sell or merge?
Is the valuation process of the partner companies fair?
Are the capital structure and sources of financing appropriate?
Does consideration (cash, notes, stock) balance the personal and business needs of all parties?