vistage presentation - acquisition pipeline (final)-1
TRANSCRIPT
Growth through Acquisition: Creating Your Acquisition PipelinePeter Lehrman
CEO I Axial
www.axial.net/vistage
September 16, 2016
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Introduction
CEO of Axial Networks, a platform that confidentially connects buyers and sellers of private mid-sized companies.
Over 500 closed transactions in 2015 via Axial; over 50% between $5M and $50M in purchase price.
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Great acquisitions create massive outperformance
400 Acquisitions since 1984; outperformed the S&P by 20x
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Berkshire Hathaway & GEICO
Ebay & Paypal
Google & Applied Semantics
Transformational lesser known acquisitions
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Agenda for the webinar
The 5 Phases of an acquisition-driven growth strategy
What it takes to create a great pipeline
Getting started and next steps
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Economic motives to make acquisitions
Achieve a cost or scale advantage
Grow revenues faster than you otherwise could
Enter a new market faster than you otherwise could
Acquire a set of skills or technologies strategic to your company
Build a bigger moat around your company
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Economic motives to make acquisitions
Achieve a cost or scale advantage
Grow revenues faster than you otherwise could
Enter a new market faster than you otherwise could
Acquire a set of skills or technologies strategic to your company
Build a bigger moat around your company
20th century pipeline creation
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21st century
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The Overall Acquisition Process
Solidify Business Strategy
Produce Acquisition
Profiles
Identify Targets
Validate Acquisition
Profile Accuracy
Determine Team Needed
Assign Accountability and
KPIs for Target Identification &
Outreach
Gather initial information
1st Draft post-integration plan
Connecting with Targets & Target
Sources
Connecting with Targets Directly
Determining fit & timeline
Review & refine post-integration plan
Draft Investment Memorandum
Due Diligence
Commercial Due Diligence
Legal & Accounting Due Diligence
Finalized post-integration plan
Board Approval
Legal Consummation
Post-transaction
Post-mortem done and documented on deal process
Execute integration plan
Post-mortem on integration
DONE!
* Derived from “The Acquirer’s Playbook, Ian D. Smith
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The Pipeline Creation Process
Create / Refine Acquisition
Profiles
Determine Methods /
Channels for Sourcing Targets
Establish Key Success
Factors / KPIs
Resource the effort and establish
accountability
Execute, Measure, Track, Review, Refine
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Creating an acquisition pipeline
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Start with What? Who? How?
• What is the company’s strategy?
• What acquisition focus areas align to the company’s overall strategy?
• Who is responsible and accountable for identifying and assessing acquisition targets?
• How will they find targets? What methods will they use to uncover opportunities?
• How will they measure their work? What KPIs are appropriate for driving results?
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The Pipeline Creation Process
Create / Refine Acquisition Profiles
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Identifying Targets
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The Pipeline Creation Process
Resourcing the Effort
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Resource the effort (org charts)
Business Unit Head
CEO
Corporate Development Professional
Business Unit Head
CEO
Buy-side Banker
Junior Analyst Junior Analyst
CFO CFO
Private Equity Partner?
Variation 1 Variation 2
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The Pipeline Creation Process
Develop Methods / Channels for
Sourcing Targets
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Good data + constant connections = great pipeline
Axial.net
Axial.netLinkedIn
People databases
Data Connections & Relationships
Hoover’s
Data.com
NetProspex
Hoover’s
Publishing Your Expertise
Niche Industry Conferences
Bankers & Brokers Sales force feedback
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Tier your use of time based on likelihood of relevance
Generalist Bankers
Named TargetsSpecialist Bankers In Your Industry
Trade Associations Business Brokers
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Sales force feedback
?
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Specialist PE – up-market or down-market
Large Corporations /
Market Leaders
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The Pipeline Creation Process
Metrics & KPIs
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Metrics & KPIs
• Phone calls• Connections made (meetings, completed calls)• NDAs signed• # of deals brought to review• # of deals granted budget for diligence• # offers submitted / # of offers signed• # of transactions closed• Conversion ratios on the above• Deal-flow by source (direct outreach, sell-side broker, conference, platform,
buy-side broker) • Deal-flow by source cross-checked against stage
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Metrics & KPIs (cont’d)
Metrics & KPIs (cont’d)
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Remember
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Next steps if you’re ready to dive deeper
• Who will own it? How will you measure it?
• Axial Acquisition Pipeline Workshop: October 20th, NYC
– Qualified discount code: VISTAGECEO
• Axial Solutions for Corporate M&A
