For the so-called “roll-up” acquisitions, it’s easy for companies to only think about the horizontal acquisition model, i.e. merging with or acquiring competitors within the same industry. The goal is often to expand market share/top line revenue and reduce cost by consolidating resources and eliminating redundancies.
But keep in mind that’s only one way of doing the roll up model; the other acquisition model is vertical acquisitions.
For example, if you’re a mobile ad network, you could buy other mobile ad network companies (horizontal acquisitions), or you could buy mobile games or other online properties where you can put the ads on (vertical acquisitions). This way you can be both the provider and the consumer of the mobile ads. Over time, both sides feed off each other and can help grow your overall business. Or Pepsi buying food companies is another example of a vertical acquisition.
Each approach offers unique benefits; just note there’s more than one dimension when it comes to M&A.