A good roll-up can be long and enjoyable. No no, I’m not talking about the lolly. The type of roll-up I’m going to be talking about can be much sweeter or sourer depending on your timing and how it was put together.

If you had your ears open, you would have been privy to the worst kind of roll-ups. The type that blew up. ABC learning’s collapse of child-care roll-up, from what was then the world’s largest operator of child care operator. In more recent times, there were Slater and Gordon (law firms roll-up) and Retail Food Group (restaurant franchises roll-up).

The road is indeed littered with disasters.

The difficulty in sustaining a successful roll-ups is structural. As the holding company becomes larger, it requires even larger acquisitions to keep boosting its revenue and profits. The integration then becomes harder and more error-prone. Add debt into the equation and the mix can be even more explosive. Continue reading →