So I'm trying to learn more about M& A + Roll Up Strategy

[Devampre]

What do you think about people attempting a roll up strategy when they have to use other people's money, defer the fees with accountants/lawyers and buy businesses in an industry they may not have all the best experience in?

I'm aware of what can happen if things go right. But, what really happens if things don't go so well?

Can you be sued? Can the debt be bad enough to ruin one's chances of trying another roll up strategy?

Thanks

 

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[Maka702]

This sounds exactly like what Dan Pena is/was pushing on YouTube and his seminars. Now I am absolutely no expert in this.. But from what I could gather all the liabilities and obligations will fall onto the owners/partners of the merged company.

Now I've always heard that once your playing and paying with big money. Same as in real estate they look more at can the property and or business then the individual. That doesn't necessarily mean you can have float being apart of every failed Merger in this decade.

Mainly they want to know can it produce the needed income after expenses to payoff the debts. Now I would imagine something similar being deployed in the same set of circumstances regarding M&A you wouldn't go into the deal without and contingency plan.