Middle Market

Summary: A roll-up acquisition strategy involves consolidating smaller companies into a larger company to achieve a higher valuation. The buyer’s objective is to eventually exit the transaction through a liquidity event. Roll-up acquisitions are typically financed with a Delayed Draw Term Loan (DDTL). These loans allow multiple draws as acquisitions are made and rolled up. […]

Summary: A roll-up acquisition strategy involves acquiring and merging several businesses into a single parent company. This strategy can work well in fragmented industries since consolidating can streamline operations and introduce economies of scale. This article discusses how roll-up acquisitions work, their financing structure, and their advantages and disadvantages. We cover the following: 1. What […]

Summary: An equity rollover happens when the seller of a company reinvests a portion of the proceeds into the newly formed acquiring entity. Typically referred to as “rollover equity,” it is common in middle-market leveraged buyouts and serves multiple purposes. This article explains how rollover equity works, its benefits, and potential areas of caution. We […]

Summary: Smaller middle-market business acquisitions are typically financed using a combination of senior debt, seller financing, and the buyer’s equity injection. Some transactions may include seller rollover equity and a 2nd lien receivables financing line to improve cash flow. Transaction size plays an important role in determining the available financing options. The number of financing […]

Summary: Roll-up acquisitions are a popular strategy for private equity companies, large corporations, and entrepreneurs. These acquisitions offer several advantages, such as the potential to profit by selling the company at a higher multiple. However, it is a high-risk strategy that requires detailed planning, careful execution, and foresight. This article discusses the pros and cons […]