Insight into bolt-on M&A process?
Hi all,
Incoming PE associate here in the B2B SaaS space and had a question for folks who have had on-the-job experience at PE firms.
Bolt-on/add-on acquisitions are often referred to as a method of adding value to a portco. I've had a few years of experience in an M&A group so am familiar with your typical M&A process from a public company perspective, but was curious about specifics on what an actual bolt-on M&A process is like (at the associate level), given the difference in scale of the companies one is targeting. The obvious differences are clear (less focus on acc/dil at an EPS level given there are no public shares/FDSO count in a small-scale, private company), but how do firms typically actually think about bolt-on M&A? In the tech space specifically, I would imagine that more weight is placed on how much revenue/EBITDA the bolt-on company can generate for your portco, framed by how much multiple uplift the acquisition can generate.
I'd appreciate any insight from current PE associates who might be able to walk me through how they/their firm think(s) about whether a potential bolt-on target is attractive or not. Further, how involved/intensive are these smaller M&A deals typically? Given that some funds' strategies of adding value can lean toward running serial bolt-on M&A, I'm curious to see how long each process is and how these funds can sustainably run these processes... TIA!
Agree with this. Good comment
Very insightful--thank you!
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