Hello all,
I currently work for the M&A team of a fast growing F500 company (growth largely result of acquisitions). I love where I work. However, recently a PE group reached out to me about an opportunity to manage the corporate development of one of their recent platform acquisitions. The PE group seems great and the portfolio company looks scaled for growth. All told, I believe it could be an excellent opportunity for me to grow my career. However, I am uncertain if the PE firm's expectations are realistic.
The PE group is looking to grow the platform's net revenues by 50%-100% per year, via 10+ add-on acquisitions per year. Furthermore, based on discussions with PE group, I would be the only employee 100% dedicated to M&A at the platform. Though they would provide me with support from their associates/deal team as I need (ex. sourcing, modeling, board proposals, etc). I am excited about the opportunity, but don't want to set myself up for failure.
Any advice, suggestions, thoughts would be much appreciated!
This largely depends on a couple of things: 1) What is the addressable market of potential targets in the size range the company is looking for? If there are only 20 or 30 companies that would make sense, doing 10+ acquisitions per year is going to prove difficult. If there are hundreds of potential targets, then it makes more sense.
2) What is the company's existing pipeline like? The question here is really whether or not you're essentially coming in to help manage and execute on an existing pipeline. If they aren't in active conversations, don't have any LOIs out etc, you're going to have to shake the trees for deals. Depending on the industry and the level of sophistication of sellers, it can take months and even years for those things to pan out.
I think it's smart to under promise and over deliver. It sounds like you need more information on that market and the company's prospects to make an informed decision on whether or not what they're asking is reasonable.
Thanks for the feedback! The particular market is very fragmented with no real strategic or PE firms with significant progess in aggregating. As for number of potential targets - there are hundreds. So it seems the opportunity is there to be a first mover.
Regarding the existing pipeline - do not have specifics but they are currently in active discussions with around 20 targets. Approximately 90 % of my time would be focused on deal management and execution.
Interview scheduled with portfolio management later this week. Will keep the questions in mind as I prepare. Thanks and any ogher thoughts appreciated!
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