Deal at close
Share of enterprise value retained in the new company.
Second exit assumptions
Positive if the next buyer pays a higher multiple (platform premium).
How to use it
Rollover equity is the share of the deal you keep in the new company. The pitch is simple: smaller first bite, bigger second bite. This tool lets you pressure-test the second bite.
- Pick the enterprise value, how much you'd roll, and today's EBITDA and multiple.
- Dial in the growth rate and multiple change you believe for the hold.
- Compare the all-cash deal to cash-plus-rollover.
What it returns
Cash at close, the implied exit value, and the proceeds on your rolled piece. Plus MOIC and IRR on the rollover alone.
How this tool works
Rollover equity is the share of the deal reinvested in the buyer's new company. The model takes an enterprise value and a rollover percentage, then projects a second exit on an EBITDA that compounds at the growth rate you set, times an exit multiple that reflects the platform premium.
For simplicity, this version assumes the rollover owns its full pro-rata at exit — no mid-hold dilution from add-on debt, management incentive plans, or preferred structures. For a richer walk-through of structure trade-offs, use the deal structure analyzer. Layer in tax with the tax estimator.
In home services, the two-bites math typically breaks even against an all-cash deal around 4–5× MOIC on the rolled piece. See rollover equity in HVAC and 70% cash at closing in roofing for worked examples.
See also on mainstreetwealth.ai
Frequently asked questions
How much rollover do buyers typically ask for?
Is rollover equity taxable at close?
What return should I expect on the rolled piece?
Can I negotiate the rollover percentage?
More on mainstreetwealth.ai
The deeper, trade-specific context on our main site.
Rollover equity when selling an HVAC business
What rollover is, how it's structured, and when it beats all-cash.
mainstreetwealth.ai/rollover-equity-when-selling-hvac-businessSell a roofing company for 70% cash at closing
The structure that lands most roofing exits in the mid-market.
mainstreetwealth.ai/how-to-sell-a-roofing-company-for-70-percent-cash-at-closingRequest a free business valuation
Get a defensible valuation from an M&A advisor who works your trade.
mainstreetwealth.ai/valuationEBITDA benchmarker
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