Does anyone know a search fund that did a consolidation play?

searcher profile

July 16, 2022

by a searcher from University of California, Berkeley - Haas School of Business in Mexico City, CDMX, Mexico

Instead of buying a single business, buying multiple small companies to consolidate them - this is common in the healthcare space for example where you purchase numerous clinics to consolidate them into a single company.

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Reply by a searcher
from MCI in Linz, Österreich
Roll-ups have been around since the age of time. There is a reason, why not all markets have been consolidated within the last 50 years. If you look into academic literature, the reason mostly is failed value creation (not achieving synergies, overpaying for targets, market swings and operational difficulties including HR). But still, consolidating a part of an industry is an interesting growth trajectory. I highly recommend this lecture: https://www.youtube.com/watch?v=thyxopgzG4k
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Reply by an investor
from University of Pennsylvania in Washington, DC, USA
There's mixed feelings around roll-ups from traditional search investors (some like them, some don't). There's definitely been some especially in the healthcare space. At my new firm Brydon Group which focuses on mid-career thesis-driven searchers we are big fans of the approach assuming the searcher has a "right to win" in the space and has an angle on the roll-up. Always happy to chat. redacted
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