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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How big does your company need to be to list on the ASX?

Last updated 21 May 2016

For many organisations, achieving an exit for its members via a listing of its securities on the stock exchange may be highly desirable, but for the uninitiated, it can be a complex and somewhat daunting process.   A consultation paper released by the ASX on 12 May 2016 proposes changes to these criteria.  Read our summary of the proposed changes to the eligibility requirements. [Read more…]

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