Happy Friday and thanks to the 40 new subscribers who joined this last week. We’re the only news source tracking lower middle market M&A. Our goal is to keep you up to date on the latest information/transactions in the market and highlight market participants that are doing interesting things in the space.

This Week’s Feature

This week we’re featuring a group on the sell-side: TechStrat. As the firm’s name suggests, TechStrat is a technology M&A firm focused on middle market clients. The firm was started by Nat Burgess, who has over 20 years of experience with software and technology-enabled services transactions. Nat’s tombstones include many transactions in the middle market including the sale of Ghost to Symantec, the sale of Caligari to Microsoft, and the sale of Instantiations to Google. The firm’s focus within technology includes security, infrastructure, internet health technology, embedded systems, and more.

As former investors and managers, we appreciate Techstrat’s advice for helping CEOs, investors, and managers build value in their technology companies. The framework begins by starting with an exit in mind. This entails outlining the ecosystem to understand who a company’s most natural acquirers may be. It also helps map out a dialogue to not only explicitly sell but also create awareness with both corp dev and product line owners at target acquirers. The framework also moves on to address how to best respond to potential inquiries from buyers.

For example, their advice for responding to inbound M&A inquiries when it’s too early to sell is to explain that:

• “We are creating value quickly; it is too early for us to sell” but, “we are interested in exploring partnership opportunities (not M&A) that can accelerate growth.” This is an invitation for a buyer who’s really interested to lean in and value the company on forward performance or figure out how both parties can begin to work together.

If responding to inbound inquiries when ready to engage, you can respond with,

• “We periodically get similar inquiries” (of course we get approached we’re a great company!) and “we have multiple shareholders and a fiduciary duty to protect their interests and we’d have to get approval at the board level before we could engage - and they have made it clear that when the time comes, we will run a process.” This dialogue has the effect of not only sending away opportunistic, low-ball offers but also gives the impression that your team expects a professional process.

If you’re a manager or CEO and want to learn more about Techstrat’s “Start with the Exit in Mind” process you can do so by clicking here.

If you’re interested in technology/SaaS M&A and want to learn more about the firm and reach out directly to the team you can do so by clicking here.

This Week’s LMM Activity

Edgewater Capital Partners acquires polymer components business from EnPro Link

Mill Point Capital partners with E&M Logistics, a distributor of ice cream, frozen and fresh foods, and beverages Link

BelHealth Investment Partners completes sale of home care business, Care Advantage, to Searchlight Capital Partners Link

Brynwood Partners acquires frozen food manufacturer, De Wafelbakkers, from Anschutz Corp Link

May River Capital’s portfolio co., Unibloc Pump, acquires Flotronic Pumps, a UK-based diaphragm pump pioneer Link

Bluestone Investment Partners invests in BI, data analytics, and business automation solutions provider, cBEYONData Link

Fulcrum Capital Partners invests in Creative Outdoor Advertising Link

The CapStreet Group invests in industrial monitoring, alerting, and notification software company, WIN-911 Link

Fairchild Capital Partners-backed Caitec, acquires pet subscription box company, VetPet Box Link

Fundraising

Falfurrias Capital Partners raises $850m for Fund V in oversubscribed round Link

Tecum Capital Management closes third SBIC fund at $240m Link

Other Stuff

PitchBook analyzes the benefits of specialization strategies in US PE funds Link

Boomer business owners may want to avoid the tax bills by selling quickly Link

Views from the market with a focus on Canada: Midmarket M&A and Private Equity Podcast Link

M&A Healthcare Advisors (MAHA) announces launch of boutique advisory firm focused on healthcare Link

Every deal has risks…

Michael Girdley @girdley

Every deal has red flags. You only have to worry if: 1) you don’t know what the red flags are Or 2) you don’t think you’re getting compensated enough for the risk.

10:58 PM ∙ Sep 6, 2021

---

28Likes3Retweets