How to benefit from Roll-Ups
The garage door industry isn’t the most obvious place for a business empire. Yet in just a few years, Guild has emerged as a dominant force, consolidating a fragmented market into a scalable platform worth millions. If you’re a business owner in a fragmented industry, Guild’s story raises two pressing questions: Could my industry be next for a roll-up, and if it is, should I lead the charge or sell to someone else??
The roll-up model—acquiring and integrating small businesses in a fragmented market to create economies of scale—isn’t new, but its reach has expanded. From veterinary clinics to plumbing companies, private equity firms are creating billion-dollar platforms from businesses once considered too small to attract institutional capital.?
Roll-ups are like waves. Catch one early, and you can ride it to a lucrative exit. Private equity firms often pay a premium to consolidate a market, and the scarcity of scaled businesses drives multiples higher. Wait too long, however, and the wave dissipates. You’re left competing with a PE-backed giant with better pricing, marketing budgets, and scale. Timing is everything.?
How to Know if Your Industry Is Ripe for a Roll-Up?
When Guild co-founders Jordan Dubin, Joe Delaney, and Sean Slavzic set out to create a roll-up platform, they didn’t stumble into garage doors—they chose it methodically. Their approach offers a roadmap for owners wondering if their market is next.?
Fragmentation?
The more small, independent businesses in your market, the easier it is to consolidate. In the garage door industry, 92% of operators were small, local businesses—an ideal setup for Guild.?
Market Size?
A fragmented market needs to be large enough to justify consolidation. Guild found a $14 billion residential garage door market with plenty of room to scale.?
Growth Potential?
Growing markets attract investors. Garage doors were growing at 7–8% annually, compared to 3–4% for more saturated sectors like HVAC.?
Precedent Transactions?
A notable sale in your industry can validate its attractiveness. The sale of A1 Garage Doors to CoreTech at 21 times EBITDA signaled strong demand for scaled players.?
领英推荐
Scalability?
Industries with standardized, repeatable processes are easier to integrate and scale. Garage door companies focus on repairs and installations, making them well suited for roll-ups.?
Timing?
By the time Guild entered, private equity had already saturated HVAC and plumbing, leaving fewer opportunities. Garage doors offered Guild the chance to be a first mover and capture value early.?
Should You Sell or Lead the Roll-Up??
If your industry meets these criteria, you’re likely at a crossroads. Do you sell to a roll-up or lead one yourself? Both options have merit, but the best choice depends on your goals and appetite for growth.?
Selling to a Roll-Up?
Selling offers liquidity and the chance to step back. To maximize your exit:?
“Private equity doesn’t want to buy a job; they want to buy an asset,” says Dubin. Failing to position your business as turnkey could mean leaving money on the table.?
Leading the Roll-Up?
If you’re not ready to sell, consider consolidating your industry. By acquiring competitors, you can scale your business, increase its value, and become the dominant player in your market.?
Dubin and his partners raised $35 million to launch Guild. “There’s too much money in the world and not enough good opportunities,” he says. Starting a roll-up requires capital, operational expertise, and a clear vision, but it lets you control your industry’s future instead of waiting for someone else to define it.?
The Wave Won’t Wait
Markets ripe for roll-ups don’t stay that way forever. Once private equity enters, competition drives valuations higher and makes acquisitions less attractive. Early movers capture the lion’s share of value, whether they’re selling or leading the charge.??