Roll Up Strategy in Private Equity
Gerry Williams, Partner at DLA Piper US LLP and a member of their management committee.
Private equity firms are established for the sole purpose of generating substantial financial returns for its investors. And one of the most effective ways of maximizing investment returns is the roll up strategy. This involves buying small-sized businesses in a highly fragmented industry and combining them into a larger platform. The goal is to improve efficiency and be sold later for a higher price.\xa0\xa0
In this episode of the M&A Science podcast, we will discuss roll up strategy in private equity with Gerry Williams, Partner at DLA Piper US LLP.
Things you will learn this episode:
\u2022 Industries susceptible to roll up strategy
\u2022 Challenges of executing roll up strategy
\u2022 Negotiating the LOI in roll up strategy
\u2022 Typical deal structure in roll up strategy
\u2022 Employing Earnouts in roll up strategy
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Episode Bookmarks
00:00 Intro
04:06 Industries susceptible to roll up strategy
06:22 The trend of roll up strategy in private equity
10:42 Complexities of Roll up strategy
15:52 Challenges of executing roll up strategy
20:32 How to mitigate risks
24:19 Managing multiple roll up businesses
26:49 Negotiating the LOI in roll up strategy
33:00 Breakup fees on private deals
35:57 Typical deal structure in roll up strategy
43:24 Employing Earnouts in roll up strategy
48:07 Unique negotiations during LOI
49:31 Do\u2019s and Don\u2019ts of executing roll up strategy
52:57 Craziest thing in M&A
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