Connaughton: Winning top-price bids requires operational repositioning beyond seller forecasts
John Connaughton · Training Grounds: Bain Capital, John Connaughton (EP.395) · Jul 8, 2024 · at 36:45
John Connaughton, Co-Managing Partner of Bain Capital, explains how the firm justifies paying top prices in competitive private equity auctions by creating operational inflection points.
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“The only reason you can do that is to create some form of inflection, some form of strategic repositioning, some form of asymmetric upside in the operating outcomes, some M&A. And so everything we do is to say, okay, we're going to buy a business based on what was presented by the seller, but If we decide that what they presented is what we underwrote, we're probably not going to win the bid. It has to be some other impact or repositioning that gets us to that outcome. And then the only way it makes it work is if we actually deliver on that through the muscle of our own team.”
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