How to Start Executing the Roll Up Strategy in M&A

Steven Freidkin, CEO and Founder of Ntiva, Inc. and Christopher Vollmond-Carstens, Chief M&A Officer at Ntiva, Inc.  In a highly fragmented industry, roll-ups are a great growth strategy. But integrating multiple entities can be difficult, especially if you don’t have a proven framework. Ntiva has been successful in its M&A strategy and has completed 15 acquisitions as of today.  In this episode of the M&A Science Podcast, Steven Freidkin, CEO and Founder of Ntiva, Inc. and Christopher Vollmond-Carstens, Chief M&A Officer at Ntiva, Inc., share their strategy on how to execute the roll-up strategy in the tech industry.  Things you will learn: • Creating value using a roll-up strategy • Evaluating a target company • Importance of recurring revenue • Red flags pre-LOI • Biggest advice for first-timers This episode is sponsored by the DealRoom. Ready to take your M&A to the next level with software made to manage each stage of the deal process? See how DealRoom can facilitate your next deal at https://dealroom.net ****************** Episode Bookmarks 00:00 Intro 08:04 Creating value using roll-up strategy 12:38 Pitching to private equity 18:32 Evaluating a target company 22:30 Importance of recurring revenue 23:35 Customer Concentration 26:42 Challenges of doing roll-ups 30:36 Mismanaging M&A 37:52 Deal Sourcing 43:46 Red flags pre-LOI 46:53 Deal structure on roll-ups 51:52 Biggest advice for first-timers 52:46 Craziest thing in M&A  

Kyle Price, Chief of Staff & Corporate Development at Roblox Creating a dedicated M&A function can be daunting for non-acquisitive companies. It’s a big commitment that could take away valuable time and resources from top level management. However, when done right, corporate development muscle can be built slowly, and organically.  In this episode of the M&A Science Podcast, Kyle Price, Chief of Staff & Corporate Development at Roblox, shares his experience on how to start an M&A function slowly and successfully from scratch.  Things you will learn in this episode: • When to build an M&A function • Importance of the people side in M&A • Working with business leaders • Evolution of corporate development • Handling biases in the M&A process This episode is sponsored by FirmRoom. FirmRoom provides 80% cost savings over VDRs that bill by page and delivers a far better user experience to boot. Sign up in under 2 minutes by going to https://firmroom.com ****************** Episode Bookmarks 00:00 Intro 04:10 When to build an M&A function 07:40 Challenges of a high-growth company doing M&A 08:45 Lessons learned along the way 10:39 Importance of the people side in M&A 12:57 Integration planning 14:39 Working with business leaders 16:42 Deal sourcing 17:24 Overcoming anti-M&A culture 22:04 Team alignment from functional leads 24:02 M&A surprises 25:59 Setting up new leaders for success 28:07 Evolution of corporate development 33:15 Measuring corporate development activity 34:20 Incentivizing the team 35:03 Handling biases in the M&A process 43:33 Craziest thing in M&A  

Ivan Golubic, CFO | Corporate Development M&A at FastLap Group Roll ups are a great strategy for highly fragmented industries. It allows the platform company to increase its size, capabilities, and market presence through the acquisition and integration of other businesses. However, it can be challenging without a proper framework.  In this episode of the M&A Science Podcast, Ivan Golubic, CFO, Corporate Development M&A at FastLap Group, shares his experience on how to start executing roll up strategy in M&A from scratch.  Things you will learn: • Setting up the roll up strategy • Valuation on roll up strategy • Building the operating strategy • Dealing with capital providers • Biggest lessons learned doing roll up strategy This episode is sponsored by the DealRoom. Ready to take your M&A to the next level with software made to manage each stage of the deal process? See how DealRoom can facilitate your next deal at https://dealroom.net ****************** Episode Bookmarks 00:00 Intro 03:01 Transitioning from Corporate Development to CFO  07:39 Setting up the roll up strategy 12:26 Importance of industry expertise 14:10 Proactive approach to expanding industry expertise 16:11 Valuation on roll up strategy 22:10 Building the operating strategy 24:54 Dealing with capital providers 28:37 Building your pipeline 30:45 Pitching to the PE firm 35:48 Explaining your M&A process to investors 38:46 Building your M&A team 40:42 Monitoring Cost 42:05Success metrics 49:25 Utilizing Technology 50:45 Importance of a unified platform 52:58 Biggest lessons learned doing roll up strategy 56:39 Future trends in the roll up space 57:33 Craziest thing in M&A  

Jim Buckley, Vice President, Mergers and Acquisitions Integration at VMware Integration planning is one of the most important aspects of M&A pre-close. Planning after the fact will cause massive delays and value leaks for the entire deal. It is why the integration team must be involved during the due diligence phase.  In this episode of the M&A Science Podcast, we will talk about how to create an executable integration plan during the diligence, featuring Jim Buckley, Vice President, Mergers and Acquisitions Integration at VMware. Things you will learn in this episode: • How to work as an integration leader • Building an integration plan • Pre-LOI integration planning • Connecting diligence with integration planning • Defining 'done' in M&A integration This episode is sponsored by FirmRoom. FirmRoom provides 80% cost savings over VDRs that bill by page and delivers a far better user experience to boot. Sign up in under 2 minutes by going to https://firmroom.com ****************** Episode Bookmarks 00:00 Intro 04:41 Navigating corporate transitions 08:31 Aligning the integration leader with the north star 10:02 How to work as an integration leader 11:25 The role of an integration lead 13:31 Building an integration plan 16:25 Focus on revenue and integration 18:51 Pre-LOI integration planning 25:08 M&A due diligence 27:37 Employee integration and customer satisfaction 29:56 Connecting diligence with integration planning 36:20 Approach to team collaboration 39:06 The details of integration plan 41:11 Complexities of M&A integration planning 44:57 Aligning with the target company 46:46 Defining 'done' in M&A integration 49:12 Integration teams leading due diligence 51:38 Leveraging diligence data for effective planning 53:13 Advice for M&A practitioners 55:45 Craziest thing in M&A

Keith Levy, Operating Partner at Sonoma Brands Every company must have a strong capital allocation strategy to maximize its potential. Without it, the company may end up missing opportunities and spending money on things that won't help it grow or become more profitable.  In this episode of the M&A Science Podcast, Keith Levy, Operating Partner at Sonoma Brands, shares his experience on successful and unsuccessful capital allocation strategies.  Things you will learn in this episode: • Strategy vs IRR • Venture capital vs recapitalization strategy • Minority vs majority recapitalization • Evaluating exit strategy This episode is sponsored by the DealRoom Ready to take your M&A to the next level with software made to manage each stage of the deal process? See how DealRoom can facilitate your next deal at https://dealroom.net ****************** Episode Bookmarks 00:00 Intro 11:27 Focusing on organic growth 16:37 Post-merger integration execution 25:01 Strategy vs IRR 26:59 Handling projections 28:07 Integration with Mars 36:20 Role of an operating partner 42:07 Big company vs Small company in M&A 43:39 Venture capital vs recapitalization strategy 48:44 Cashing out from an owner’s perspective 50:42 Minority vs majority recapitalization 54:03 Impact of valuations and interest rates on investment decisions 59:07 Timing on investments 1:01:25 Evaluating exit strategy 1:03:46 Advice for practitioners 1:05:41 Craziest thing in M&A  

Gerry Williams, Partner at DLA Piper US LLP and a member of their management committee. Private equity firms are established for the sole purpose of generating substantial financial returns for its investors. And one of the most effective ways of maximizing investment returns is the roll up strategy. This involves buying small-sized businesses in a highly fragmented industry and combining them into a larger platform. The goal is to improve efficiency and be sold later for a higher price.   In this episode of the M&A Science podcast, we will discuss roll up strategy in private equity with Gerry Williams, Partner at DLA Piper US LLP. Things you will learn this episode: • Industries susceptible to roll up strategy • Challenges of executing roll up strategy • Negotiating the LOI in roll up strategy • Typical deal structure in roll up strategy • Employing Earnouts in roll up strategy This episode is sponsored by FirmRoom FirmRoom provides 80% cost savings over VDRs that bill by page and delivers a far better user experience to boot. Sign up in under 2 minutes by going to firmroom.com ****************** Episode Bookmarks 00:00 Intro 04:06 Industries susceptible to roll up strategy 06:22 The trend of roll up strategy in private equity 10:42 Complexities of Roll up strategy 15:52 Challenges of executing roll up strategy 20:32 How to mitigate risks 24:19 Managing multiple roll up businesses 26:49 Negotiating the LOI in roll up strategy 33:00 Breakup fees on private deals 35:57 Typical deal structure in roll up strategy 43:24 Employing Earnouts in roll up strategy 48:07 Unique negotiations during LOI 49:31 Do’s and Don’ts of executing roll up strategy 52:57 Craziest thing in M&A  

Tyler Rodewald, VP, M&A at EIS Holdings In a world where change is the only constant, businesses are continually seeking innovative ways to stay ahead of the curve. One such method that has gained prominence is the corporate diversification strategy, a multifaceted approach that can lead to new growth avenues and enhanced resilience.  In this episode of the M&A Science Podcast, Tyler Rodewald, VP, M&A at EIS Holdings, discusses corporate diversification through M&A. Things you will learn: • Corporate diversification strategy • Drivers of corporate diversification • People involved in corporate diversification • Projecting revenue synergies • Closing deals with competition This episode is brought to you by the M&A Science Spring Summit 2024 happening on April 10th at 10AM ET. It's your chance to join leading M&A experts as they share innovative and the latest trends from their own deals. Save your spot here. ****************** Episode Bookmarks 00:00 Intro 02:55 Corporate diversification strategy 03:32 Drivers of corporate diversification 05:22 People involved in corporate diversification 08:00 Communicating the diversification strategy - The number one step 08:51 Customer overlaps on deals 11:17 Capital Allocation 13:41 Proprietary deal vs Bank Deal 15:22 Deal Sourcing 17:57 Closing deals with competition 19:22 Cultural integration 22:03 Handling resistance 23:21 Measuring Success 24:31 Projecting revenue synergies 26:09 Earnouts 30:31 Letter on intent exclusivity 32:10 Combining diligence with integration using DealRoom 36:42 Using DealRoom with Sellers 40:02 Advice for practitioners doing corporate diversification 40:30 AI in M&A 46:34 Craziest thing in M&A      

Andrey Galiuk, Vice President of Corporate Development and Investor Relations Before doing M&A, it is crucial for acquirers to target the right business, in the right market. Otherwise, it could potentially be a costly mistake that would waste the company’s time and money.  In this episode of the M&A Science Podcast, Andrey Galiuk, Vice President of Corporate Development and Investor Relations, shares his expertise on how to perform strategic due diligence in M&A.  Things you will learn: • What is strategic due diligence • How to perform strategic due diligence in M&A • Entering the right market • Finding the right target company • Biggest challenge when performing strategic diligence This episode is brought to you by the M&A Science Spring Summit 2024 happening on April 10th at 10AM ET. It's your chance to join leading M&A experts as they share innovative and the latest trends from their own deals. Save your spot here. ****************** Episode Bookmarks 00:00 Intro 11:17 What is strategic due diligence 16:25 How to perform strategic due diligence in M&A 25:00 Entering the right market 38:05 Finding the right target company 41:25 When to perform strategic due diligence 42:38 Proactive vs. Reactive deal sourcing 44:33 Importance of culture 47:05 When to start integration planning 49:11 Red flags during strategic diligence 50:33 Assessing incoming people 51:20 Biggest challenge when performing strategic diligence  

George Kellerman, VP, Head of Investments & Acquisitions at Woven by Toyota and Alexander Baum, Corporate Development Lead at Woven by Toyota In the ever-evolving world of business, staying ahead isn't just about what a company does today, but how it prepares for tomorrow. This is where a venture capital arm comes into play. It is a specialized division within a larger company that focuses on investing in emerging startups and innovative projects.  In this episode of the M&A Science Podcast, George Kellerman, VP, Head of Investments & Acquisitions at Woven by Toyota, and Alexander Baum, Corporate Development Lead at Woven by Toyota, share their experience on how to stand up a venture capital arm.  Things you will learn: • How did Woven by Toyota got started • Successfully start a venture capital arm • Leadership in managing people • Biggest Lessons Learned • Dealing with cultural difference This episode is brought to you by the M&A Science Spring Summit 2024 happening on April 10th at 10AM ET. It's your chance to join leading M&A experts as they share innovative and the latest trends from their own deals. Save your spot here. ****************** Episode Bookmarks *George Kellerman 00:00 Intro 06:15 From firefighter to M&A 09:49 How did Woven by Toyota got started 11:19 Project Kate 12:58 Pitching the shift in strategy 14:31 Woven Capital’s strategy 16:48 How to successfully start a venture capital arm 19:45 Leadership in managing people 22:03 Biggest lessons learned 26:00 A change in strategy 27:04 The Woven City Project 31:11 Dealing with cultural difference 35:40 Craziest thing in M&A *Alex Baum 39:34 Noticing cultural differences in Japan 42:11 Relocating to Tokyo 44:07 New York vs Japan culture 45:28 Work culture in Japan 48:32 Rubber stamp approval in Japan 49:51 Balancing American and Japanese culture 51:27 Maintaining alignment 52:09 Craziest thing in M&A  

Camilo Franco, Director, M&A Integration and Operations at Jamf There is an intimate tie between M&A strategy and corporate strategy. To be truly effective, acquisitions must directly support the overarching goal of the company. But beyond that, there needs to be a strategic alignment with everyone involved.  In this episode of the M&A Science Podcast, Camilo Franco, Director, M&A Integration and Operations at Jamf, shares their secrets on how to achieve strategic alignment from top to bottom.  Things you will learn: • How to achieve strategic alignment • Strategies for effectively communicating M&A plans • Tools used to maintain alignment • Connecting diligence and Integration • Advice for integration practitioners ****************** This episode is brought to you by the M&A Science Spring Summit 2024 happening on April 10th at 10AM ET. It's your chance to join leading M&A experts as they share innovative and the latest trends from their own deals. Save your spot here. ****************** Episode Bookmarks 00:00 Intro 08:45 Definition of strategic alignment 10:31 How to achieve strategic alignment 12:51 Relaying M&A strategy against corporate strategy 13:54 Getting buy-in from team members 15:37 Overcoming anti-M&A culture 18:44 Strategies for effectively communicating M&A plans 21:21 Alignment with the integration team 23:51 Formulating the integration thesis 26:37 Role of steering committee 28:04 Communicating decisions with the broader organization 29:30 Managing integration without IMO 32:09 Ensuring company readiness for integration 34:11 Gauging M&A readiness 36:06 Side effects of burnout people 37:25 Defining the end of integration 39:30 Tools used to maintain alignment 43:32 Agile M&A 44:46 Connecting diligence and integration 48:13 Using integration templates 50:36 Advice for integration p