Is bigger better? Helping borrowers evaluate the pros and cons of a roll-up

Description

Abstract: Management is constantly maneuvering and shifting to stabilize their business and find the best position in the market. One maneuver potentially available to a company is to purchase, or merge with, one or more similar businesses in the same industry — thus decreasing operating inefficiencies and increasing economies of scale. These roll-ups can be beneficial to everyone involved — including lenders. But they’re not without drawbacks. This article looks at the benefits and drawbacks of roll-ups, showing how lenders can help companies determine whether they’ll gain advantages from a roll-up, or take on further problems.