đ§What I Learned Last Week
Friday December 2, 2022
What I Learned Last Week curates the most interesting content relating to business acquisitions, operations, entrepreneurship, finance, and more. WILLW is a publication of The Business Inquirer.
Letâs connect: LinkedIn, Twitter
Hello Friends!
This issue of What I Learned Last Week is brought to you by DueDilio.
DueDilio is a leading online marketplace focused on M&A due diligence.
We connect business buyers, sellers, intermediaries, and private investors with pre-vetted due diligence service providers.
Our large and growing network of verified independent professionals, boutique and mid-size firms, and subject-matter experts specialize in finance, technology, legal, commercial, and other key areas of business diligence.
Submit your project. Review qualified proposals. Hire service provider.
đ° Articles
BDO talks about how private equity firms are shifting their focus from buying to exiting. Given their size, BDO is clearly talking about public markets and large deals but I think there are some good insights here for SMBs as well.
After soaring throughout the previous decade, valuations for public market technology companies have retreated to lower levels in recent months due to a marked deterioration in macroeconomic conditions. Tech M&A, which set records for value and volume in 2021, reversed course this year as companies in the sector adjust to the perilous financial climate and rethink their growth plans. Even when sellers (target companies) are willing to meet buyer (private equity fund) prices, private equity funds investing in tech no longer have certainty of financing, with rising interest rates increasing the cost of the debt that typically fuels their deals.
Still, gaps in valuation expectations between target companies and private equity buyers remain a crucial roadblock for M&A activity in the sector. In this shifting landscape, private equity investors should focus on readying existing companies in their tech portfolios to capitalize on exit opportunities once market conditions improve.
PRIVATE EQUITY PULLS BACK ON TECH M&A, FOCUSES ON EXIT READINESS
â â â â â â
VMG Health gives a good framework for thinking about acquisitions in the healthcare services space.
The physician medical group sector remains a hot transaction space that outperforms expectations each quarter. This sectorâs strong prospects are driven by interest from private equity groups, health systems, and value-based care organizations. However, before buyers operate in this robust sector, they must consider the unique transaction intricacies of such deals, including physician alignment, compensation structure, and due diligence considerations.Â
Three Key Considerations in Physician Medical Group Transactions
𧾠Twitter
Some really interesting business examples in this threadâŚ
You want to be buying profits and free cash flowâŚ
Good discussion on asset vs. stock saleâŚ
Good thread on NWC and why itâs importantâŚ
This is not talked about enoughâŚ
The pros and cons of a full standby seller noteâŚ
Key things to keep in mind when searching for an acquisitionâŚ
Great explanation of roll-ups and how they add valueâŚ
This is spot on and needs to be talked about moreâŚ
đ¤ Thoughts, Events, Other
đ Tools & Resources
I want to share some tools & resources that I have found helpful. Please note that some of these may contain affiliate links. This means that I may receive compensation if you sign-up and use them.
Cerebro Capital - Cerebro has a network of 1,500+ lenders who can provide debt financing for your acquisition, refi, etc. $500k minimum.
X5 Deals - Proprietary deal sourcing. They do the outreach and send you relevant, actionable deals directly into your inbox.
Curators - Proprietary deal sourcing. You need targets that fit your investment criteria, and Curators delivers week after week - we even update your personalized database on a daily basis with new information on best-fit targets.
BizNexus - Proprietary deal flow, deal aggregator, and exit prep. Local Boston company and I consider the founder (Adam Ray) a friend.
PrivSource - Deal aggregator for lower and middle-market listings.
The Website Flip - a newsletter that sends content sites for sale to your email inbox. They send deals each Wednesday and Friday.Â
Kumo - Find every deal in one complete platform. Spend less time sourcing deals and more time closing them. Kumo aggregates 180K+ business listings into one easy-to-use platform.
Deal Flow Scout - Peer-to-peer deal flow exchange. Free, open, transparent.
Deal Sourcing Guide - A directory I put together of online marketplaces, brokers, DFY deal flow, and more.
Thatâs all for this issue of What I Learned Last Week!
Help us improve with anonymous feedback. How did you like this issue of the newsletter?
If you enjoyed reading this newsletter, why not share it?
Letâs connect: LinkedIn, Twitter
Important Disclaimer: This newsletter is provided for informational & educational purposes only, and should not be relied upon as legal, business, investment, or tax advice. This newsletter may link to other websites and certain information contained herein has been obtained from third-party sources. While taken from sources believed to be reliable, it has not been independently verified. The Business Inquirer makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. References to any companies, securities, listings, investments, or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any business, tax, or investment decisions. Content in this newsletter speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.