Add-on M&A - criteria
Hi all,
What are the 10 top criteria that you take into consideration when assessing potential add-on targets for your portfolio company?
Many thanks,
Anne!
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Hey akbh010101, what a lonely thread. I'm here since nobody responded ...so maybe one of these discussions will help:
More suggestions...
Hope that helps.
How will this deal add value to the platform (e.g., entry into a new market, acquisition of software).
Will this be accretive to IRR on a risk-adjusted basis? When decomposing returns, how much of the IRR is from multiple arb (buying at 6x when your platform is 12x), EBITDA growth, and CF generation? How much of the return is from being debt-funded?
What will I have to pay to win the deal? What's the most I can pay? Does the purchase price underwrite some synergies? If so, how much? If there are synergies, how will the management team execute against them? Are there corporate overheard I'll need to bake into the add-on?
How will I finance the deal? If it's all debt funded, can the core earnings of the platform support the interest?
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