M&A Science Live - Why PE Rollups Fail the People Who Built the Business
In this live session, we'll get into how to read a seller's real motivation, how to diligence the owner and not just the financials, what the 3-5-7 flip model actually does to the businesses inside it, and what happens when the rollup music stops. Live Q&A at the end, bring your deal questions.
About
The rollup playbook looks unstoppable from the outside. Buy agencies, stack them on preferred equity, grind margins, flip the platform in three to seven years. In insurance brokerage alone, dozens of platforms are running this exact model right now.
The part that doesn't show up in the pitch deck is what happens to the people who built the businesses being bought. The owners who sell into structures they don't fully understand. The teams who watch culture get traded for margin. And the common holders who find out what a preferred equity waterfall means only when the platform sells.
Bill Johnson has seen this market from a seat almost nobody else has. He founded Liberty in 1987, stepped away to produce more than 30 Hollywood films, and came back in 2018 to grow the firm to nearly 900 people across all 50 states, without PE money. He grew through acquisitions in the early years, developed a sharp filter for seller motivation and owner character, and then made the call most buyers never consider: he stopped acquiring and bet the growth strategy on hiring and culture instead.
In this live session, we'll get into how to read a seller's real motivation, how to diligence the owner and not just the financials, what the 3-5-7 flip model actually does to the businesses inside it, and what happens when the rollup music stops. Live Q&A at the end, bring your deal questions.
What You'll Learn
- How to read seller motivation and separate a motivated owner looking for a platform from one just testing the market
- Why an end-of-career cash-out is a different deal than a growth-minded seller, and how the valuation and integration risk change with it
- How to diligence owner character before close, and what it costs you when you skip it
- What the PE rollup playbook actually looks like from the inside: the 3-5-7 year flip, preferred equity structures, and the margin grind
- What preferred equity waterfalls mean for common holders when a platform finally sells
- When walking away from M&A is the stronger move, and how Bill made the call to grow through hiring instead of acquiring
- How to build culture at scale without PE pressure: core values, highest and best use, and a servant leadership model that holds at nearly 900 people
Agenda
