Davis Polk partner Jesse Solomon was quoted in Mergermarket on roll-ups and add-on strategies used by private equity sponsors and how these transactions may be scrutinized by regulators.

Jesse noted that the draft merger guidelines published by the FTC and DOJ this summer do not put forward a specific theory of harm about private equity, even though the agencies have been very vocal about their concerns.

“Sponsors want to know whether there is ‘hyper scrutiny’ from the agencies or whether these enforcement actions are about especially egregious cases,” Jesse explained.

When asked if the FTC’s suit against private equity firm Welsh Carson for alleged medical price-fixing is a bellwether for strict enforcement against roll-ups in general, Jesse said, “The case seems extreme. The allegations donʼt address a garden variety PE roll-up and the case is based on traditional antitrust concerns rather than new theories of harm.”

“Dealspeak North America – Sponsors beware: Roll-up and add-on strategies are on regulatorsʼ radars,” Mergermarket (December 18, 2023) (subscription required) 

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