Mergers and Acquisitions Trends

We spent the last 3 months researching how PE firms create value 🌱 The result: “The Private Equity Value Creation Report” — one of the most in-depth studies on the topic, based on the data from over 10,000 PE entries and exits globally. 𝟳 𝗸𝗲𝘆 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀: 1️⃣ Revenue growth is the largest driver of PE value creation On average, it contributes to 54% of value creation. Recently, revenue growth has become an even more critical driver of success (as multiples have come down), contributing to ~65-70% of value creation in the last 2 years. 2️⃣ Margin expansion plays a smaller role at 15% Margin expansion is most impactful when PE firms target operationally challenged businesses rather than already-efficient businesses. 78% of deals with negative EBITDA margins achieved margin expansion (median +1250bps), while businesses with high EBITDA margins (>30%) typically saw margin contraction. 3️⃣ Multiple expansion contributes significantly at 32% For the top quartile deals, its contribution is even higher at 40%.  By sector, TMT, Science & Health, and Services see the largest multiple expansion. Consumer and Industrials see the least. By size, multiple expansion is the highest for smaller deals under $100M EV. 4️⃣ Growth amplifies all other PE value creation drivers Growing companies benefit from operating leverage and are more likely to achieve margin expansion. 58% of growing firms expand margins compared to 44% of those with negative growth. Higher-growth companies also typically command 30–50% higher multiples at exit. 5️⃣ Top and bottom-performing deals are held the longest Investors hold onto the best-performing assets for greater upside but also hold the worst, trying to fix the business. Assets held in the 3-6 year range tend to cluster around more predictable, moderate returns. 6️⃣ Buy-and-build is central to PE value creation When done right, buy-and-build bolsters all three value creation drivers: revenue growth, margin expansion, and multiple expansion. Buy-and-build works at any size, but the uplift is strongest in small platforms. The multiple arbitrage strategy still works with add-ons trading at a 20% discount to platforms. 7️⃣ Larger deals drive more margin expansion Large businesses ($1bn+ EV) and public-to-private deals, on average, deliver more margin expansion. Smaller businesses, on the other hand, rely more on growth and multiple expansion to drive returns. Given the smaller size, returns on average, are also higher for family-to-sponsor deals. _______ 𝗙𝘂𝗹𝗹 𝗥𝗲𝗽𝗼𝗿𝘁 Don’t miss out on insights: 💡 By Sector 💡 By Deal Type and Size 💡 MOICs and Loss rates + 5 case studies and 43 charts. Get it here ➡️ https://lnkd.in/d9Z3kubU (E-mail required) #ValueCreation #Growth #PrivateEquity

Everyone’s got capital. Everyone’s got deal flow. Almost no one has a real talent strategy. Capital is commoditised. So is M&A. Everyone has access to debt. Everyone’s getting banker decks. Everyone’s playing the same playbook from 2012, just with higher entry multiples. The last true edge? Talent. Not the “we’ll bring in a new CEO post-close” kind of talent. A proper, institutionalised strategy to identify, attract, deploy, and retain world-class operators across the portfolio. But most firms aren’t even close. Because it’s hard. And because they’re not built for it. PE misses this because the entire ecosystem is optimised around capital deployment and transaction speed. Talent doesn’t fit neatly into that machine. It’s slow. It’s qualitative. It requires network, judgment, and long-term thinking—none of which gets you carry faster. Here’s why it’s so hard: • Talent is nonlinear. The difference between good and great can’t be seen on a CV. • There’s no process for it in most firms. No bench. No real pipeline. Just a mad dash post-close. • PE still overvalues credentials (fancy brand names, MBAs, prior exits) instead of capability and cultural fit. • Most firms don’t have the internal experience to assess operators properly—especially in growth and commercial roles. So what happens? Same cycle every time. Close the deal. Scramble for a CEO. Hope for the best. Replace them 18 months later. Here’s what needs to change: 1. Build a bench before you buy You wouldn’t wait until you sign a term sheet to raise capital. Stop waiting until close to find leadership. Build a shadow org chart during diligence. 2. Invest in talent infrastructure This means internal talent partners who aren’t just recruiters. Operating partners who understand what great looks like. Systems for assessing and tracking execs across the funnel. 3. Stop hiring off brand alone Track record is useful. But functional depth and cultural alignment matter more. A second-tier CEO who understands your customer can outperform a McKinsey-SVP-turned-God-complex nine times out of ten. 4. Treat talent like an investment, not a transaction Pay to get it right. Onboard properly. Support your operators with coaching, data, and systems. And reward performance in a way that drives outcomes—not just optics. In a market where everything else is commoditised, execution is the only real alpha. And execution is powered by talent. If you don’t have a strategy for it, you’re not doing value creation. You’re just hoping the spreadsheet was right. #PrivateEquity #TalentStrategy #ValueCreation #ClaymorePartners #OperatingExcellence

𝐉𝐮𝐬𝐭 𝐭𝐮𝐫𝐧𝐞𝐝 𝐚 𝐦𝐚𝐫𝐤𝐞𝐭 𝐡𝐢𝐜𝐜𝐮𝐩 𝐢𝐧𝐭𝐨 𝐚 $70𝐌 𝐰𝐢𝐧 𝐟𝐨𝐫 𝐚 𝐏𝐄 𝐜𝐥𝐢𝐞𝐧𝐭. 𝐇𝐞𝐫𝐞'𝐬 𝐡𝐨𝐰. Last year I got a call from a megafund I've advised before. "Market's gone nuts with these rate hikes. We think there's opportunity." Understatement of the year. Their portfolio company was rock-solid – $500M enterprise value, performing above plan despite macro chaos. But the company's fixed-rate debt was getting hammered, trading at 80 cents on the dollar. Pure market mechanics, nothing fundamental. Most firms would shrug. "Interesting, but so what?" I spotted something different. The fund owned 100% of the equity but ZERO of the debt. Classic artificial separation between capital structure components that only exists because most investors lack either imagination or control positions. Sometimes both. 𝐌𝐲 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲: Buy up a chunk of the debt at the depressed price while maintaining complete equity control. Not just a trade, but a fundamentally transformative move that: [1] Instantly transferred value from selling debt holders to our equity position (market dislocation arbitrage) [2] Reduced change-of-control repayment risk on exit (structural enhancement) [3] Created multiple new strategic exit paths (optionality creation) The math was compelling: $6M direct gain from buying $30M debt at $24M, plus another $42M from enhanced exit value due to simplified structure and reduced transaction risk. They executed immediately. Initial 10% debt repurchase, followed by another 15% over six months. Total position up $70M in value. Here's the kicker – most advisors would've calculated the discount to par and stopped there. Basic arithmetic. I showed how this maneuver fundamentally altered their strategic position in ways potential buyers would pay real money for. When you control both sides of the table, you dictate the rules of engagement. Why share this? Because our industry spends too much time on financial engineering and not enough on strategic repositioning. Capital structure isn't static – it's a dynamic tool for value creation. The best GPs don't just squeeze more EBITDA from their companies; they reshape the financial architecture itself. The line between "market opportunity" and "strategic transformation" is where the real money gets made. That's the playground I operate in. Who else has executed similar strategic plays recently? Would love to hear your stories. #PrivateEquity #M&A #ValueCreation #CapitalStructure #StrategicFinance

Can you buy your way to AI-distribution? Top VCs think so. Here’s how: AI provides the largest opportunity for building new companies since the inception of the internet. Selling your shiny new AI-solution remains a challenge, though: - Incumbents are slow. Selling to them can take forever.  - Your success hinges on their willingness to innovate.  - Not under your control - you might run out of money before. What if flipping this logic around could be the answer? Instead of selling your solution you would be buying your customers? 💡 Enter: AI Rollups. First popularized by influential AI-investor Elad Gil, a list of heavyweight backers like Andreessen Horowitz, Thrive Capital, Khosla Ventures and General Catalyst have thrown money at the following investment hypothesis: To fast-track AI adoption and thus the distribution of your solutions, you buy mature, people-intensive companies like law firms and other professional services firms, help them scale through AI, then use the improved margins to acquire other such enterprises and repeat the process. 👍 The advantages: Faster AI adoption: No need to wait for incumbents to modernize — you control the transformation. Immediate distribution: Access to existing customer base, workflows, and cash flows. Massive cost savings: AI can cut up to 80% of labor and operational costs. Margin expansion: Turning low-margin, service-heavy businesses into high-margin, scalable operations. Acquisition flywheel: Increased cash flow allows you to outbid others and roll up more firms quickly. Defensible advantage: Creates a compounding edge through tech + operational leverage. Clear monetization path: Improved efficiency drives immediate bottom-line results. ☝ But there are some challenges: High execution risk: Integration, automation, and culture shifts can fail if poorly managed. Regulatory hurdles: Legal, compliance, and labor challenges in traditional industries. Capital-intensive: Requires upfront capital for M&A before value creation kicks in. Operational complexity: Scaling across multiple services, geographies, and AI use cases gets messy. Talent mismatch: Traditional firms may lack the mindset or skills to embrace AI-led operations. Also: Limited disruption AI rollups optimize existing models, don't invent new categories. No "zero-to-one" innovation or category-defining breakthroughs. While rethinking everything from the ground up is a much riskier zero-to-one move, it’s where the Googles, Facebooks and Ubers of the AI-age are going to get built. More on the 3 stages of platform shifts in my previous post: https://lnkd.in/dt2veZeb What these alternatives to AI rollups (Stage 3 innovation) could look like in my next post. 👉 Follow to stay in the loop.

Most PE CFO mandates right now aren’t about finance. They’re about value creation under pressure. Across our current searches, three clear patterns are emerging. First, platform CFOs for buy-and-build strategies. International consolidation. Integration. Repeatable M&A playbooks. Technical depth still matters, but only if it translates into execution. Second, exit-ready CFO upgrades. Strong assets, performing well… but not yet “exit-grade” from a finance perspective. The brief is increasingly commercial: improve reporting quality, sharpen MI, partner with the CEO, and drive enterprise value ahead of process. Third, day-one CFOs for new platforms. Working alongside CEOs and M&A leads to build from scratch. Not just running finance, but designing how the business scales through acquisition. Below that, the pattern continues. Office of the CFO roles are being pulled closer to investors. FP&A leaders plugged directly into funds. Divisional FDs operating as hands-on operators inside complex group structures. Reporting isn’t a hygiene factor anymore. It’s a value lever. And on the interim side. Integration specialists. PE-backed SaaS operators who understand churn, CAC and data. Finance leaders who can step in 12 months pre-exit and move the dial quickly. The common thread is clear. Funds are hiring finance leaders who can change outcomes under pressure.

Here’s the truth: Deals win or die by what happens after close. M&A isn’t just about numbers. It’s about envisioning the end state. I’ve seen too many deals get done for the wrong reasons—chasing revenue, ego, or momentum—without ever asking: What do we want this to look like after the dust settles? That’s why Buyer-Led M&A flips the script. We lead with clarity, not chaos. 🔹 Start by mapping the end state. Not just the financials—think operating model, customer experience, and decision-making structure. What does “success” actually look like? 🔹 Then dig into culture. Forget the surface-level values page. You need to understand how decisions get made, how people work, and how priorities shift under pressure. That’s the real culture. 🔹 Now you can start building a joint go-to-market plan. This is your integration thesis. What does the customer experience look like as a combined company? 🔹 Integration planning should run parallel to diligence. Same team. Shared information. Continuous learning. That’s how you get to Day 1 readiness—and avoid repeating diligence after you’ve already bought the company. 🔹 Finally: reverse diligence. Let the target get to know you. This is a two-way street. The more transparency, the more alignment, the more likely you’ll retain the people who actually make the deal work. M&A isn’t a race to term sheets. It’s a race to value creation—and that starts by leading the process, not just following it. This is how I define the Buyer-Led M&A™ mindset. What am I missing? Let me know in the comments. #MergersAndAcquisitions #BuyerLedMA #DealRoom

Value creation in a private equity environment revolves around systematically enhancing a portfolio company’s performance to achieve strong returns at exit. In my recent role as Go-to-Market Advisor for a cutting-edge AI-led health tech startup in the UK at Series B, I developed a comprehensive commercial strategy that rapidly boosted recurring revenue by 30% within 12 months. A key breakthrough emerged when we discovered extended integration timelines were deterring smaller clinics and hospital networks from adopting our solution. By designing a flexible onboarding framework, we reduced implementation time by 40% and reinvested these savings into predictive analytics features—enabling clinicians to forecast patient needs and administrators to allocate resources more effectively. Here’s a concise six-step roadmap for delivering tangible results: 1. Due Diligence: Pinpoint growth levers and operational bottlenecks pre-acquisition. 2. 100-Day Plan: Establish quick wins—revamp pricing structures, refine workflows, and optimise early partnerships. 3. Organisational Excellence: Assess leadership, align incentives with performance outcomes, and foster a culture of continuous improvement. 4. Accelerated Growth: Perfect go-to-market strategies, drive product innovation, and explore targeted acquisitions or strategic alliances. 5. Ongoing Optimisation: Monitor KPIs rigorously, remain agile, and leverage real-time data insights to pivot swiftly. 6. Exit Preparation: Ensure robust financial reporting, demonstrate sustained operational gains, and plan a smooth transition for new owners. Throughout each phase, transparency and collaboration are vital. Regular, data-driven updates to board members, management teams, and front-line staff help secure buy-in and maintain accountability. Ultimately, true value creation goes beyond financial engineering. It’s about generating sustainable growth, driving innovation, strengthening the organisation’s culture, and positioning the business for long-term success. By following a deliberate plan and staying laser-focused on top-line expansion and bottom-line efficiency, we set the stage for a transformative exit that benefits stakeholders and the broader healthcare ecosystem alike.

Something interesting is happening in the lower middle market right now. The big PE firms are showing up. Funds that historically would not look at a deal under $50M in enterprise value are now actively sourcing in the $10M to $30M range. Not because they have lowered their standards. Because the math has changed. Here is what is driving it. Competition for quality platform deals at the upper middle market has gotten brutal. The same 15 firms are bidding on the same assets, and purchase multiples have been pushed to levels where the return math barely works. Meanwhile, the lower middle market is sitting on thousands of businesses owned by founders who are aging, tired, or simply ready to move on. A recent KeyBank survey found that two thirds of middle market companies expect to engage in M&A activity within the next three years. That is not a hypothetical pipeline. That is real deal flow. So what are these larger funds doing? They are buying platforms at the lower middle market and then running aggressive add on strategies to build scale. They acquire a $15M EBITDA business at 7x, tuck in four or five smaller companies at 4x to 5x, and exit the combined platform at 9x to 10x. The math is simple. The execution is where most firms differentiate. For sellers, this means two things. First, your buyer pool is bigger than you think. You are not just competing for attention from local independent sponsors and small PE firms. Institutional capital is looking at businesses your size. Second, these buyers are sophisticated. They will find every weakness in your business during diligence. They will structure deals aggressively. And they will move fast. The sellers who benefit from this wave are the ones who are prepared. Clean financials. A management team that can operate without the founder. A growth story that gives the buyer a clear thesis to take to their investment committee. If you are running a profitable business in a fragmented industry doing $3M to $10M in EBITDA, the spotlight is moving in your direction. Make sure you are ready for it. #PrivateEquity #MergersAndAcquisitions #LowerMiddleMarket #PlatformAcquisition #MAAdvisory #DealFlow

In M&A, culture isn’t the soft stuff. It’s the compounding engine. "People are the secret sauce." Every PE partner says it. Then they show me spreadsheets. Not people. Jeff Picard does it differently. 30 years building The Vertex Companies - a global professional services firm delivering forensic consulting, construction advisory, and compliance solutions. 700+ people. Multiple acquisitions. But here’s what stands out: Jeff still thinks like the founder he was on day one - but with the self-awareness some founders never develop. "Founders have baby bias," Jeff told me. "They built these businesses. They know every client, every process, every person who made it work." Most acquirers dismiss this as emotional baggage. Jeff treats it as intel. And he looks for this intel from founders and their employees. That’s why he and rockstar Chief People Officer Shae Crawford run monthly roundtables. Not town halls. Not presentations. Roundtables. 10 people - at all levels (junior and mid-levels in particular). Real conversations. Actual changes implemented. And employees see the changes stick - because leadership listens and acts. And founders' care for their employees is take forward. When Vertex acquired ADAMS Management Services Corporation (healthcare program management), they didn’t just model synergies. They listened to people who knew things Vertex didn’t. Result? Millions in new healthcare project synergies within months -the kind of post-merger integration most PMI teams can only dream of. Not because of “integration playbooks.” Because people understood each other, trusted each other, and collaborated fast. Here’s the truth: The math only works if the people work. You can buy assets. Merge systems. Standardise processes. But value walks out the door at 5pm. Unless they want to stay. That’s why Jeff and the Vertex team turned employees into shareholders. Not just management - everyone. When you acquire a founder’s life work, you’re not buying a P&L. You’re inheriting relationships, trust, and knowledge that took decades to build. Destroy that? You’ve just overpaid for contracts and a logo. Preserve it? You’ve bought a platform for growth. 👉 For those of you who’ve been through deals: what’s the smartest people-first move you’ve seen that actually created value?

We aren't seeing a ton of M&A right now, but we are certainly seeing the results of poor integration planning. Far too few buyers come to the table with a clear post-acquisition integration plan, especially on the human resources side. This isn’t just a missed opportunity — it’s a strategic risk. Why integration planning matters: * Culture clashes can kill performance... especially in highly regulated, compliance-driven environments. * Disjointed SOPs and workforce policies lead to operational drag, especially across multi-state operators. * Without a people strategy, you risk losing top talent and morale. Buyers should be asking: * What’s the state of the HR tech stack (payroll, scheduling, onboarding)? Is it scalable? * Are there employee classification or labor risks — especially around hourly roles or contractors? * What’s the leadership bench strength? Who are the culture carriers worth retaining? * Are benefits and compensation aligned and competitive, or will harmonization cause churn? * Is there a clear plan to align org structure and compliance training across entities? M&A without integration is like planting without watering — you might own the asset, but it won’t grow. Let’s stop thinking of HR as a post-close detail. It’s your retention strategy, culture play, and risk buffer — all in one. I would love to hear from folks in cannabis M&A, HR, or ops: What’s working — and what still needs fixing — when it comes to integration? #CannabisIndustry #MergersAndAcquisitions #HRStrategy #OrganizationalIntegration #CannabisBusiness