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Investor Presentaiton

"Roll Up" This is similar to the strategic multiple acquisitions type above, but is pursued on a bigger scale and in accordance with a particular strategy to grow quickly by a series of acquisitions. In this type, Investor picks a trusted manager or management team with expertise in the transportation and logistics industry to identify specific targets. Investor provides financing to allow the manager to make acquisitions and integrate the acquired companies into one or two larger companies. The roll up can begin with the acquisition of one established company that will be the "platform company" for the roll up, or Investor can use a holding company to manage the multiple operating companies that it acquires and combines. Pros Buying many established compa- nies in a series of acquisitions in accordance with a specific plan would allow Investor to grow and gain a market share quickly. Investor can gain value by reduc- ing costs, yet expanding business, if Investor's management team is expert at combining the multiple operations, finding more efficient ways to operate, and cut costs. Cons A roll up can be very expensive and can be hurt by bad acquisitions with an unskilled management team. Investor will not be in control of the acquisitions and operations, if Investor uses a local management team. â– Combining the companies can be difficult. If the targeted industry sectors are not growing, then the rolled up company may not have enough business to justify the acquisition costs. With each acquisition, the potential for local operational problems and risks increases. Each acquisition increases the cost of the joint venture. Guide to Investing in the Freight Transportation and Logistics Industry in the United States 19
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