In recent months, conversations with stakeholders across New Zealand’s private markets have revealed growing interest in roll-up strategies, a method by which a well-capitalised buyer acquires and integrates multiple smaller businesses in the same industry. Long used offshore to build competitive platforms, the approach now appears increasingly viable here.

This article examines how roll-up strategies work, why New Zealand’s market conditions may support their adoption, which sectors are likely to see activity, and the commercial and legal considerations essential for successful execution.

Where the opportunities lie

Roll-up opportunities tend to be strongest in sectors characterised by high fragmentation and operational similarity. Several New Zealand industries currently fit the bill:

• Agriculture: Strong commodity prices and reduced farm debt have created breathing room for operators to consider succession or exit. New Forests’ A$600 million ANZLAFF fund has flagged interest in trans-Tasman agricultural assets.
  However, the Government’s move to exclude farmland from the fast-track Overseas Investment Office regime may temper activity in this space, insofar as overseas buyers go.
• Trades and Renewable Energy: The electrification of the economy presents an opportunity to aggregate trades-based businesses, such as electricians, solar installers and EV infrastructure providers, into national platforms delivering standardised service at scale.  
• Healthcare, Accounting and Veterinary Services: Healthcare, accounting and veterinary services remain fertile ground. These sectors combine steady revenue, compliance complexity and fragmented provider landscapes. 

Getting it right: The upside and the risks

Done well, roll-ups can generate significant value. Done poorly, they can unravel fast. Integration is the key to success. 

What success looks like

There are several factors that can add to the success of a roll-up.

• Economies of scale: Shared back-office functions (finance, HR, IT) reduce operating costs and improve efficiency. 
• Improved market power: Larger players are better positioned to negotiate supplier terms and achieve pricing advantages.
• Diversified risk: A broader client base and wider geographic spread can buffer downturns in any one segment.
• Knowledge transfer: Best practices shared across the group can raise operating standards, encourage professionalism in management, and attract top calibre talent.
• Effective integration: Success depends on careful integration planning, from aligning systems and processes to retaining key people and ensuring cultural fit. Strong communication and a clear execution roadmap are essential.

We’ve supported a number of clients to execute on this strategy. Common examples exist in the healthcare and aged care sectors, where we’ve assisted significant growth, and the delivery of standardised systems and consistent clinical outcomes - it demonstrates the value of a well-executed roll-up strategy.   

Where things go wrong

There are also areas that require careful consideration and planning to avoid common pitfalls.

• Integration challenges: Combining teams, systems and cultures is rarely straightforward - missteps here often delay or diminish anticipated benefits.
• Inadequate due diligence: In the rush to build scale, acquirers may cut corners on due diligence. This can result in overlooked liabilities, poor financial hygiene, or cultural incompatibility that later undermines integration.
• Funding risk: Roll-ups are often debt-fuelled. If earnings underperform or rates rise, interest coverage may become stretched.
• Overvaluation: Competitive processes can drive up prices, particularly for quality assets, eroding investor returns.
• Regulatory scrutiny: Depending on sector and market share, acquisitions may require clearance from the Commerce Commission - or risk being unwound post-transaction.

A case study in overreach

Slater and Gordon’s rise and fall is a warning. The Australian law firm, the first to list on the ASX, pursued aggressive offshore expansion, culminating in its 2015 acquisition of Quindell’s UK legal business for over A$1 billion. The target’s earnings later proved unsustainable. Most of the acquisition was written down, debt ballooned, and the firm was forced into a recapitalisation that wiped out shareholders. It remains a textbook example of acquisition without adequate diligence and the perils of stretching beyond home ground.

What about Competition Law?

An acquisition only requires the acquirer to seek Commerce Commission clearance when it has the potent effect of substantially lessening competition in a market. Given that many roll-ups involve multiple target companies with low market shares, at least viewed on a national market basis, at first sight each individual acquisition may not appear to require clearance. Be aware though that low market shares on a national market basis does not guarantee obtaining clearance. In a national roll-up strategy, it’s important to consider competition at both a local and national level, as acquisitions of small players may still have significant effects when viewed on a local market basis. 

As part of its ongoing review of the Commerce Act, the Government is also considering whether to give the Commerce Commission more power to assess roll-up strategies. The proposed powers would allow the Commerce Commission, when assessing the effect of a proposed acquisition, to combine the effect of similar acquisitions by the same buyer in the last three years. If introduced, acquirers would have to be careful around the extent of any roll-ups taking place, particularly within a three-year window. 

A similar standard takes effect in Australia at the start of 2026. We consider that there is a good chance this power will be introduced in New Zealand, given the Government’s apparent interest in maintaining consistency between the standards in New Zealand and Australia, so those contemplating roll-ups need to keep an eye on the big picture, not just the latest acquisition.

Conclusion: A timely strategy, but not without risk

Roll-up strategies offer a compelling route to scale, resilience and operating leverage but they’re no shortcut to value. Integration, capital structuring and regulatory engagement all require serious attention.

Private equity funds remain well-capitalised and are actively seeking platforms for growth. Smaller operators recognising roll-up opportunities in their sector may benefit from aligning with institutional investors to realise these strategies before others beat them to it.

Get in touch

Please reach out to one of our experts below if you would like to discuss anything about the roll-ups strategies.

Special thanks to Thomas Rowland and Henry King for their assistance in writing this article.