In this episode, I’m joined by an experienced operating executive with a decade-long track record of success in the private equity world. Our discussion touched on the differences between operational and advisory roles, acclimating entrepreneurs to the PE experience, and the importance of trusted partnerships.
Mar 16, 2020 1:08:48 PM — Winning the Brand Game Can Supercharge Your M&A Results For acquirers of businesses, either Corporate or Private Equity (PE), it’s not exactly a great time to be buying businesses and placing bets on new frontiers. A recent Price Waterhouse Coopers report found that the uptick in mega-mergers and acquisitions seen in 2019 will continue into the new decade. This means high purchase prices will remain in their stratosphere for the foreseeable future. As a result of high purchase-price multiples and overly ambitious revenue growth plans, the landscape is littered with the remains of deals gone south or sour. In fact, more than half of intended acquisitions fail, and 80 percent fall short of expectations. To protect themselves against failed deals, Corporations and PE have responded to inflated purchase price multiples by doubling down on pre-acquisition and pre-merger due diligence.
Feb 17, 2020 10:59:00 AM — Solid due diligence on ALL aspects of the business and a fast start on value creation are needed to reach the end-point of a strong ROI for the investors at exit Recently, I was visiting with a colleague from my days at Waste Management Inc. (WM) reminiscing about a major industry roll-up of which we were a part. Waste Management had decided to create value for shareholders by acquiring and consolidating companies in the very fragmented pest control and lawn care business, creating new national players in the industry. We were part of the acquisition team – several of us having been owners of acquired companies, plus a long-time WM executive. In two years, our team directed the acquisition and consolidation of over 150 companies, resulting in a roll-up of about $200 million in annual home services revenue. The entire consolidation was eventually sold to ServiceMaster, owner of Terminix. Fast forward to current days, when many of the old problems with M&A are the same, but there’s a new twist. In the world of Private Equity, today’s sky-high valuations require making even smarter decisions when buying a company. Solid due diligence on ALL aspects of the business and a fast start on value creation are needed to reach the end-point of a strong ROI for the investors at exit.
Oct 28, 2019 4:50:31 PM — Several trends in the private equity landscape demand GPs focus on accelerated growth initiatives to drive returns, which requires an infusion of marketing expertise, says Karen Hayward of Chief Outsiders. Private equity’s long boom is proving to be mixed blessing. According to Prequin, deal making through the third quarter of 2019 is matching that of 2018. GPs are still raising record levels of capital, meaning the competition for deals, reflected in the high price of assets, won’t be subsiding anytime soon. More concerning is that the pace of exits has been slowing, with 2019’s exits looking to fall short of 2018’s numbers, a situation that has yet to dampen LPs enthusiasm for the asset class… yet.
Sep 5, 2018 1:41:01 PM — The difference between a marketing executive working inside the business and on the board A standard part of the private equity playbook is to find seasoned executives to fill seats on the boards of their portfolio companies. Increasingly that includes someone with a strong marketing pedigree who can provide advice, guidance and support to both the management team and the board on an ongoing basis. But this approach may not be enough for many mid-market firms, especially in an environment where acquisition prices are on the rise, exit multiples are shrinking, and the pressure mounts from LPs to deliver outsized returns.