Insight
Lundberg: Search Fund Buyers Care More Than Traditional Private Equity
“This is one of the benefits of search, investing in search over investing in kind of traditional private equity is that the searcher really cares, right? Because it's their career. They've only got one shot. If you've got a fund that's going to buy 15, 20 busi…”
Insight
Lundberg: Business brokers often set unrealistic seller valuation expectations
“It's much, much nicer on the buy side to be doing a deal with a client who's got a proper M&A sell side advisor than it is With just a broker, because the brokers, and again, not to be disparaging here, but sometimes you will find that some of the brokers set …”
Insight
Lundberg: Corporate Business Deadlines Are Usually Arbitrary Nonsense
“I think that I've seen actually, as I've kind of gained experience and worked in professional services for longer and worked with lots of different businesses over the years, the deadlines often are nonsense, right? And it's a, you know, best endeavors type si…”
Insight
Lundberg: Smaller M&A Deals Require More Advisory Work Than Large Ones
“Normally working on kind of smaller transactions they are, you know, you need a little bit more input. The buyers and the sellers actually need a bit more support to get the deal done. And often, you know, things tend to come up because the businesses aren't q…”
Assertion Not checkable as stated
Lundberg: The UK Has Roughly 200 Active Search Fund Buyers
“Optimistically there's maybe. 5000 buyers out there and probably in the UK searches, maybe 200. So there's loads to pick from.”
Insight
Lundberg: Approaching off-market targets usually causes owners to shop around
“Normally if you find a company that's not on the market and you approach them, you know, you can expect that they're going to shop around before they say yes or no to you.”
Assertion Not checkable as stated
Lundberg: SME Acquisitions Currently Trade At 4.5x To 5.5x Earnings
“At the moment we're seeing deals in, in, you know, the SME space of between four and a half and five and a half generally.”
Assertion Not checkable as stated
Lundberg: UK lower mid-market deals range from £5M to £40M EV
“Really for us, the type of deals that we see are, Between five million at the bottom end EV. And that really would be a, I think more of a bolt on play for one of these PE houses, but you know, a good platform for a search fund, for example for a self-funded s…”
Assertion Not checkable as stated
Lundberg: UK professional services historically sold for 0.8x to 1.2x revenue
“Historically as well, professional services used to be sold on a revenue multiple. And there was a lot of M and A in that space in the UK at the moment in, in, you know, lawyers, financial advisors and accountants. And they used to be bought on a multiple of r…”
Insight
Lundberg: Search deals need strong second-tier management for investor appeal
“Lots of search deals are perceived as MBI's historically. They have been. Now the more attractive ones for investors are actually where you have at least a very good tier, second tier management. So while someone may go in to run the business, there is still q…”
Assertion Supported
Lundberg: UK disclosure rules exempt most small businesses from reporting revenue
“Obviously the UK kind of public accounting requirements, the public disclosure requirements mean that most small owner managed businesses don't have to report revenue, but it might be out there.”
Insight
Lundberg: Acquirers should filter opportunities against deal-breaker criteria first
“I always say to people have a list of deal breakers and go through that first, because if you get something in front of you and it doesn't tick all of those boxes, then you can very quickly say no and move on to something else.”
