CEO4ADAY Presents: A Journey To Acquire

I am going to begin writing about a journey, that I am beginning, as I attempt  to acquire a platform company in partnership with a private equity firm.  A  journey that is likely to be more difficult given the current performance of the global economy. However, economic trials can provide numerous opportunities if you are prepared to put the effort forth to identify and execute. In the Age of Austerity we have to create opportunities.

I will be targeting middle market companies with revenues from $100 to $500 million and will not expect any TARP funds or bail outs from Congress or the White House to finance the acquisition. The intent will be to identify a platform that will provide organic growth as well as serve as a vehicle for a potential roll up within a category.

 I  will provide some background on my experience to establish my credentials for this particular pursuit. I will not use actual names as the confidentiality of the process is critical and I will at times in this journey be targeting a company or companies that may be publicly traded.

I have enjoyed a  successful career in an industry that continues to provide challenges,  opportunities for innovation and provides essential products to the public. I have worked with fortune 50 corporations as well as a smaller family business. I have experience in both domestic and international markets  and I was a CEO of a middle market company for nearly 10 years. During my stint as the CEO,  the company was divested by its’ parent company and I was able to partner with a private equity firm to acquire the company and remain as CEO until the company was divested from their portfolio in 2004. 

 In 2005,  I joined another private equity firm to become CEO for a group of five companies that the firm had acquired over a period of about three years,  prior to my joining the firm.  After nearly three years at the helm of this group of companies I am now in a position to seek new opportunities and have selected another private equity firm to partner with.

What I will be writing about in the coming weeks is the process from creating a  target wish list, to acquisition should we be fortunate enough to complete a transaction. The journey ahead will be  filled with numerous roadblocks as we identify a target, create true believers in our partners, secure meetings with target management, engage in due diligence, arrive at an acceptable valuation, present an offer to shareholders and secure financing to close the transaction in a timely manner.

The first step for me in this process was identifying a firm that I could partner with. As an operating executive I bring a set of skills and experience that private equity firms are in need of.  That experience includes knowledge of an industry or  a category that the firm may desire to invest in, along with the ” in the trenches ” experience garnered from years as a CEO charged with enhancing stakeholder value.

In this particular instance,  I am working with a firm in which there are two team members at the firm  that I have partnered with in a past transaction within the same industry and category. Since we  had a successful experience in our prior business relationship it shortened the courting process and we were able to agree to work together after a phone call and a meeting. Selecting the right partners or firm to work with may be the most critical decision that I make in the entire process.

The benefits to be gained from this relationship are numerous.  For me,  they include working with a well respected and well funded firm that understands the category that I want them to invest in and they are familiar with me and respect my counsel and experience.

 For the firm,  I provide insight into a category they are interested in participating in and at no cost to them,  they now have access to a knowledgeable participant in the industry that can potentially generate new opportunities for the firm.

In my next Blog I will write about creating the target acquisition wish list.