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
19View entire presentation