Acquisition Entrepreneur Blueprint
The search for, valuation, financing and due diligence of a private company acquisition, and the management of the business in the first year of ownership.
The acquisition of a small private company differs substantially from investment in a listed security. Information is less complete and less reliable, the counterparty is an individual owner rather than a market, the price is negotiated rather than quoted, and on completion the acquirer assumes operational responsibility for the business.
This Blueprint covers the full acquisition process: the definition of a search thesis; the origination of proprietary deal flow; the valuation of owner-operated businesses whose financial statements have been prepared to minimise taxation; the structuring and financing of the transaction; due diligence; and the first twelve months of ownership, during which a substantial proportion of the value of the acquisition is either realised or lost.
By the end you will be able to
- Define a search thesis sufficiently specific to generate qualified deal flow
- Originate proprietary acquisition opportunities outside brokered auction processes
- Normalise the financial statements of an owner-operated business and value it on a defensible basis
- Structure a transaction using seller financing, earn-outs and an appropriate level of senior debt
- Conduct due diligence that identifies owner dependence, customer concentration and working capital risk
- Negotiate and complete a transaction, and plan the first hundred days of ownership
Curriculum
The definition of acquisition criteria and the origination of proprietary deal flow.
The normalisation of owner-operated financial statements and the valuation of a business without a market price.
The construction of a capital structure the business can service, and the identification through due diligence of matters that affect price, structure or the decision to proceed.
The first year of ownership, during which a substantial proportion of the value of the acquisition is realised or lost.