Deal Capital, a middle market merger and acquisition advisory firm, has expanded its buy-side advisory practice for private equity and family office firms across the United States and Canada.
The move is due to recent partnerships inked with strategic private equity groups looking to quickly expand their footprint in sourcing good deals for acquisition.
Traditionally, the company has maintained a very targeted focus on sell-side M&A deals, working with middle-market business owners and operators in the strategic sale, restructure or recapitalisation of their long-held businesses. New changes and connections with strategic partners has helped to expand the practice of M&A engagement beyond just the sell-side deals.
“We’ve seen a substantial increase in the demand for buy-side work,” admits Jake Durrant, Managing Director. “The bump in demand is likely the result of economic forces working in favour of the sellers. Many private equity acquirers have their internal crews for sourcing their own deals,” says Durrant. “We’ve certainly seen an uptick in the desire for more buy-side M&A sourcing.”
The latest engaged partners are interested in acquiring private businesses with various different characteristics.
“Some of our partners are more operationally-driven, seeking an acquisition where they can completely take over the management of the business while others are interested in taking a backseat to existing management who may be looking to perform a traditional management buyout of existing owners and continue running the company going forward,” says Durrant. “We’ve tried to stay focused on companies interested in the long-term sustainability of the enterprise that may have taken years to build.”
For the right selling candidates Deal Capital’s partners will perform a complete owner buyout, leaving existing management intact for a preferably long period of time. This strategy ensures the status quo of the business is not significantly interrupted. The private equity buyers seek a stake that is generally between 51% and 80% of the business in these types of deals.
“We’re happy to connect with the strategic equity partners we have that are interested in making direct investments in some of the most promising companies and technologies,” says Durrant of the latest engagements. “We’ll be using these direct partnerships for adding value to both buyers and sellers, as we’ve been doing now for years.”