3 Ways to Play an Industry Roll-Up

3 Ways to Play an Industry Roll-Up

“Jon Claydon founded Streamline Marketing and within seven years sold his business,” shares Sam Thompson a Minneapolis business broker and the president of M&A firm Transitions In Business. “He talks in detail about selling to a private equity group with a roll up strategy. He also shares why it’s important to have an intermediary negotiate for you, especially if you are staying on with the buyer.”

In 2013, Jon Claydon started Streamline Marketing to help brands manage their affiliate programs. Claydon bootstrapped his business to around 30 employees but avoided hiring for some senior roles in favor of doing much of the work himself.

Thanks to Claydon’s lean approach, the business enjoyed 50% EBITDA margins, but the pace took its toll. In 2019, Claydon kept working through a shingles diagnosis only to end up in the hospital as the rash caused by the virus spread to his throat, which began to close. Claydon ended up in hospital with time to reflect on the stress his business was causing and decided it was time to sell.

In this episode, you’ll discover:

  • 3 routes to consider when your industry goes through a consolidation wave.
  • The downside of staying independent.
  • How to use “add-backs” to juice your EBITDA.
  • A typical formula acquirers use to buy service businesses.
  • How to drive a sense of urgency to complete an acquisition.

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