M&A Talk (Mergers & Acquisitions), by Morgan & Westfield cover image

M&A Talk (Mergers & Acquisitions), by Morgan & Westfield

The Basics of Selling Your Company to a PE Firm

May 17, 2024
Matt Coyne offers expert advice on selling middle-market companies to PE firms. Topics include what PE firms look for, benefits and concerns of selling to a PE firm, tips on working with them, typical financial structures, and expectations post-sale. The podcast covers nuances between platform and add-on acquisitions, dynamics between strategic and financial buyers, debunking misconceptions about PE firms, role of professional management in PE investments, and the importance of transparency in post-sale communication.
01:00:35

Episode guests

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Quick takeaways

  • Private equity firms offer growth opportunities and prefer active ownership participation.
  • Deal structures involve equity investments from both buyer and seller, with post-acquisition involvement impacting returns.

Deep dives

Basics of Selling to a Private Equity Firm

Selling to a private equity firm is crucial for business owners making over half a million dollars a year, with two types of acquisitions: platform and add-on. Selling to a platform requires earnings of over 3 million, while add-ons involve businesses making down to half a million. Private equity groups aim to grow bought businesses and look for strategic fits or add-on acquisitions. Around 75% of deals are sold to PE firms due to their active buying nature and focus on growth.

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