Roll ups in M&A transactions

A roll up (Roll Up) is generally thought of in the context of mergers and acquisitions is where a group of businesses are combined for the purpose of building an asset base capable of being listed on a stock exchange.  The reason for this is that the larger asset base is more likely to create an exit event in the form of an Initial Public Offer (IPO) more quickly than a business can grow organically.  Putting my MBA hat on the other benefit is the economies of scale that can be achieved because of having a centralised infrastructure and common branding (for example) usually in a common vertical market.  Whilst on the road to the goal, there exists the opportunity to leverage systems and infrastructure to extract synergies for the newly merged business.  The economic rationale for a Roll Up & List (Roll Up & List) is simple, all things being equal, shares which are readily tradeable on a stock exchange are generally more valuable than those that are illiquid.

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