Leveraged Build Ups (LBUs)

An effective strategy for creating significantly increased value for companies is the consolidation of businesses within the same industry or related industries. Such strategies are often referred to as 'Roll Ups' or 'Leveraged Build Ups' and involve the leveraging of a company's financial and business performance by acquiring and integrating other companies in related sectors.

Our Tactics

Businesses that operate in fragmented industries and may lack management depth and strong capital capacity can be attractive candidates for consolidation through a LBU. Combining such companies can create operational efficiencies, market penetration, buying power and access to more cost effective expansion capital. These factors can make the combined entity far more valuable than the individual parts of the sum.

At State Equity, we work with responsible entrepreneurs who have the vision and ability to execute and effectively integrate a LBU strategy. We structure the LBU so that the initial Sponsor of the strategy is properly rewarded at the appropriate time, whilst ensuring subsequent investors/participants also have the opportunity to realise a suitable return on their investment.

Client Benefits

We coordinate the entire consolidation process from the conceptualisation stage to the exit strategy, while helping to fund the acquisition of relevant target companies and advising on the integration and development of the consolidated entity. This enables management to remain focused on the performance of the expanding business thereby ensuring the optimum value for the enterprise upon exit.

 

View our guide to
Leveraged Build Ups