c Benchmark International How to Navigate a Deal with Private Equity Funds and be Successful

Watching Now

How to Navigate a Deal with Private Equity Funds and be Successful

Host Dara Shareef

For many sellers, the notion of selling the business they built from the ground up to a private equity fund is unimaginable. Many have heard horror stories from their friends, perhaps read books about the pitfalls of private equity buyers, and may even have some personal experiences. While dealing with private equity funds can be problematic for sellers, they often also are the best, most logical buyer. They are well-funded, so there is little risk the deal will fall through because of the inability to fund. Also, today’s private equity funds generally will leave their portfolio companies to operate free of interference, only offering support, guidance, and growth capital. However, if unrepresented by a capable M&A advisor, sellers can run into many problems in the midst of a transaction with a private equity fund. 

What are these pitfalls? Here are a few:

  • There’s a pronounced gap between what is expected from the fund as it relates to data and what is readily accessible from the seller. How do you bridge that gap?
  • Be aware that Private Equity math is very complicated. Will they bring leverage to the transaction? Where will that debt sit? Will it appropriately dilute their equity? What is a Net Working Capital Peg? How is it calculated? How can buyers use it to erode deal value?
  • How do you know that the deal being offered is competitive with what is out there in the market? PE Funds buy companies for a living, so they are very shrewd negotiators.
  • Due diligence in PE deals is very rigorous. While diligence is a fact of life in all deals, how do you know that a buyer's request is reasonable? How do you know that the timing of each diligence item won’t interfere with your business?

Fear not. An experienced and capable advisor can help you navigate through each of these obstacles. In this webinar, we will discuss the pros and cons of partnering with a Private Equity fund and pay particular attention to how best to handle the complexity these deals inevitably introduce.

Host:

Dara Shareef
Managing Director
Benchmark International

Share:
Watch:

Related

News & Articles

WHAT WORKING CAPITAL IS NOT!

This article explores what working capital is not!

Read More
Are Headwinds Coming For Buyers Seeking An SBA 7(A) Loan For Acquisitions?

Learn about the SBA 7(a) loan guaranty program and how this can help buyers and sellers in the current M&A market.

Read More
TRADE SALE OR SALE TO EMPLOYEES (IN THE UK)?

This article explore the differences between shareholders selling to a trade buyer and selling to an Employee Ownership Trust (EOT).

Read More
The Benefits of an Effective Seller Transition Period

Learn the several benefits of structuring an effective seller transition period.

Read More
Benchmark International Successfully Facilitated the Transaction Between KeCo Limited and Sabert Corporation Europe

The European division of US-based food packaging company, Sabert, has bought British foodservice packaging manufacturer, KeCo.

Read More
Benchmark International Successfully Facilitated the Transaction Between The Colography Group, Inc. and Halstatt Legacy Partners

Benchmark International is pleased to announce the successful transaction between The Colography Group, Inc. and Halstatt Legacy Partners. The Colography Group, Inc. based in Georgia, is a research and consulting firm that specializes in providing market intelligence and ongoing quantitative research.

Read More
Benchmark International Successfully Facilitated the Acquisition of an Industrial Services Firm and Crete Mechanical Group

Benchmark International is pleased to announce the transaction between our client, a prominent industrial services firm, and Crete Mechanical Group (“CMG”). Crete Mechanical Group (“CMG”) is a multi-site owner, operator, and business partner to mechanical service businesses in the United States.

Read More
Outlook & Advantages of International Mergers and Acquisitions

Top Four Outlook and Advantages of International Mergers and Acquisitions. With the economic outlook and threats of all kinds continuing to test even the most influential organizations, companies face various challenges as they work to find growth and stay competitive. One of the most beneficial ways of growing an existing company is through mergers and acquisitions (M&A).

Read More
The Current State Of Commercial Real Estate

Here is the current state of the commercial real estate market.

Read More
Growing Business Trends For 2021-2022

Here are the growing business trends for 2021-2022 all business owners should consider.

Read More