Private Equity Add-ons
Private equity groups are in the acquisition business. They earn their profit by buying and growing privately held companies. Many use the platform/add-on model. That is, they will acquire a large company in a particular industry and then grow it by acquiring smaller companies in the same or a related industry. By buying appropriate related companies they can:
- gain market share
- gain economies of scale, such as
- quantity discounts
- consolidated management
- other efficiencies
- gain competitive strength through cost advantage and plain old elimination of one or a few competitors
We specialize in putting together deals between private equity groups and privately held businesses in the 2 to 15 million dollar range. We know which groups are looking for which types of add-ons. We also know how to effectively package our selling companies to show each PEG prospect how that business will fit in with their platform company. And.. we know how to show the target PEG buyer the full value of the selling companies that we represent.
We are known to private equity groups as an add-on specialist. When we call with a deal, they know it is a deal worth looking at. Many PEGs rely on us to bring them add-on deals. Few smaller PEGs have the resources to do deal sourcing in-house. In a very real sense, we do their finding and screening for them. Many larger PEGs concentrate their internal searches on finding new platform companies, leaving add-on searches to us.
We constantly monitor PEG acquisition activity so we are always current on their add-on needs. We talk to our contacts at the PEGs regularly and visit with them at conventions, conferences, and seminars.
If you are considering the sale of your company now or in the near future, give us a call. We'll be happy to discuss this possibility with you without cost or obligation.
