Navigating the private equity deal process like a pro

After pouring countless hours and dollars into your company, you have built a strong business supported by a solid team and product offering. Your EBITDA looks good, and you are now considering what’s next.

In today’s dynamic environment, private equity offers a strategic pathway for business owners seeking growth, transformation or a lucrative exit. I have been in this position numerous times. It is one of the stages of business I find most invigorating — where you transform your business into a whole new future of growth and impact.

My portfolio of businesses is built upon a repeatable process of investing in fragmented industries, understanding customer needs, solving pain points through technology investment and developing teams that create a frictionless experience for small operators and their customers. By creating pathways for increased value, we are well-positioned for merger and acquisition transactions through private equity and other investor types. Our most recent series of work led to a triple transaction that transformed my pallet management business (Prime Woodcraft) into one of the largest total pallet management services businesses in the U.S. when it became Prime 360 and then Forty48.

Our extensive deal flow track record across industries (for example, cell phone, real estate, supply chain, etc.) gives us a unique perspective on what is needed to successfully run, buy and sell companies. This knowledge is often leveraged within my work as a part owner of Morningside Group, a financial, IT and operational consulting group that partners with middle-market companies and private equity on M&A transactions, and performance support and improvement.

Deal flow can be complex and time-consuming, but the process can move smoothly and with significant results through careful preparation, the support of a well-vetted advisory team and attention to your team. Here’s how to ensure you maximize your deal.

  1. Know your worth. Obtain a third-party valuation before engaging with private equity with an independent firm to set realistic expectations and provide a solid benchmark for negotiation.
  2. Engage experts. Surround yourself with knowledgeable financial and legal advisers familiar with private equity deal flow. Their guidance will be invaluable to ensure you are well-informed and proactive throughout all process steps.
  3. Build your data room. Your financial, legal and operational documents must be in order. They should be up-to-date and easily accessible. Through strong organization, your business appears well-ordered and competent, and you will accelerate deal flow when you are accurate, consistent and efficient.
  4. Envision your future. Private equity partners are investing in your vision. Clearly outline where your business going and illustrate the roadmap that will support this growth. This includes recognizing and managing outstanding issues, including legal disputes, regulatory matters, undeclared debts and other potential negotiation roadblocks.
  5. Take care of your team. Your team is your greatest asset. Keep them in the loop and address their concerns and expectations throughout the process. A united front factors favorably with potential investors.

While private equity offers incredible opportunities, its success is predicated on preparation. Lay the groundwork, be informed and engage the right partners. With this network in place, your business will be boundless, and private equity may be the right fuel to take it to the next level. ●

Ansir Junaid is Chairman and CEO of SupplySide Group

Ansir Junaid

Chairman and CEO
Connect On Social Media