RT Journal Article
SR Electronic
T1 Do Rollups Yield Higher Returns?
JF The Journal of Investing
FD Institutional Investor Journals
SP 57
OP 65
DO 10.3905/joi.2002.319507
VO 11
IS 2
A1 Theresa Henry
A1 Joshua Livnat
YR 2002
UL https://pm-research.com/content/11/2/57.abstract
AB Rollups are consolidators of small, independent, businesses within an industry into larger publicly listed companies. This study finds that rollups enjoy higher returns than a matched sample of companies within the same four-digit SIC industry and size, but not significantly higher. While rollup companies can achieve higher growth in revenues after their IPO than the matched sample, they are unable to significantly reduce operating expenses below those of the matched companies. A subsample of rollup companies that were able to both increase revenues and reduce operating expenses after the rollup do produce significantly higher returns than their matched companies, consistent with the objective of the rollup.