🧐 What I Learned Last Week 4.28.23
🧐 What I Learned Last Week 4.28.23
Curating the best M&A, SMB, and EtA-related content.
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📰 Articles
Yale Releases Case Study On Franchises
The Wolf of Franchises dives into the recently released Yale study - “Exploring Franchisees as a Post-MBA Entrepreneurial Path”. I’m a big fan of this newsletter and recommend subscribing.
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Pitchbook Global M&A Report
Pitchbook released its M&A report for Q1 2023.
A persistently gloomy macroeconomic backdrop and near banking crisis drove a decline in M&A activity in Q1 2023, pushing global deal value down 32% from the peak just over a year prior.
But total M&A deal value still topped $1 trillion for the quarter. While certain sellers—think PE—stepped back in recent months, lower valuation multiples in some cases helped encourage deal flow.
Key takeaways
Multiples on PE-led buyouts collapsed by 29% in Q1 after holding firm for two years, reflecting a shift to smaller and cheaper deals.
Smaller companies—those worth $100 million or less—have seen their median enterprise value drop to a revenue multiple of 1.1x, trailing behind the overall M&A market's median of 1.6x.
Founder-owned businesses made up 85% of all businesses sold in Q1, their highest share of the market ever.
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The SMB M&A Pipeline: Q1 2023
Axial released its quarterly report highlighting top-of-the-funnel deal activity on its platform.
Quarterly volume of new deals confidentially marketed via Axial achieved a record high in Q1. California, Texas, and Florida continued to remain the top three states for deal volume.
Industrials, Food & Hospitality, and Consumer Goods ranked as the top 3 sectors for deal volume (see below data table) but ranked in the bottom 3 sectors for pursuit rates. Food & Hospitality experienced the highest annual growth in deal volume with a 74.31% increase compared to Q1 2022.
🧵 Best of Twitter
Valuation, customer concentration, and churn are deal killers…
Brokerage is a very relationship-driven industry. Will need to innovate and evolve…
An interesting case for buying a low SDE business…
How to hire a GM…
Visualizing the opportunity set…
Tips on deal sourcing…
Retaining the seller post-acquisition…
🤔 Thoughts, Events, Other
Horizon Search
There’s a new SMB M&A-focused magazine called Horizon Search.
Dive into the inaugural monthly digital magazine, showcasing exclusive interviews with Dami Lee, Martin Thibodeau, Jan Simon, Ryan D'Souza, and Keiko Funahashi. Stay inspired and informed as we uncover their strategies and unique perspectives on the world of business and innovation.
⚒️ 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.
DueDilio - #1 marketplace to hire highly vetted M&A due diligence service providers. Your source for finance, legal, tech, and other key areas of due diligence. Submit your project, review proposals, and hire.
PrivSource - PrivSource helps you source deals and connect with transaction partners without ever paying a success fee.
BizNexus - Marketplace + off-market origination in one platform. The marketplace averages about 10k active listings & pre-CIM opportunities, and the off-market origination focuses on data & multi-channel. Local Boston company and I consider the founder (Adam Ray) a friend.
X5 Deals - Proprietary deal sourcing. They do the outreach and send you relevant, actionable deals directly into your inbox.
Import Dojo - a newsletter that sends eCommerce and Amazon FBA businesses for sale to your email inbox. They send deals each Wednesday at 9:00 AM CST.
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.
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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.