Have you ever wondered what it’s like to be on the buyer's side of a private equity exit? Adam Coffey has spent the last twenty years as CEO of three private equity-backed national service companies and intimately understands the unique concerns from the buyer’s perspective during a sale. Through his experience executing a buy-and-build strategy, he has bought and sold more than 100 companies ranging in size from $1 million to $1 billion. 

 

In this episode, Adam unpacks the strategies that allow PE firms to get the huge returns that have made the industry—for both investors and sellers—so popular. Adam dives into the three different areas of growth he focuses on to achieve a 30% CAGR, a recipe that even worked on companies that were at a stagnant 5% growth for years. He also talks about how private equity firms create their strategic planning and investment models based on what ‘good’ looks like for their investments. Tune in if you’re ready to capitalize on growth and be more knowledgeable about the buy side of the deal table.

 

What You Will Learn 

How a private equity firm structures their investments with their limited partners and future stakeholders (e.g., previous owners who sold)

How a private equity firm structures their investments with their limited partners and future stakeholders (e.g., previous owners who sold)

What the perceptive is like as the CEO of a PE firm negotiating a purchase with one of the founders of a business

The rule of 72 that private equity firms use to double, triple and quadruple their investments

Understanding the role of a PE firm makes you less likely to get screwed on a deal

A detailed overview of the buy-and-build strategy from a private equity CEO’s perspective

Why Adam doesn't like earnouts, even though it might be good for him as a buyer

The math behind rollover investing and the real reasons why the second bite of the apple (second sale of the company) can mean even more money than the first sale

How to using a phone book to identify if an industry is fragmented and ripe for a rollup

The three primary levers private equity firms use to get a higher multiple on their investments

Where and how the investment thesis of the PE firm plays a role in the deal structure and how that impacts how they view a target acquisition 

The three types of growth private equity firms use when performing a buy-and-build

How an entrepreneur’s personality influences if a private equity firm will even make an offer

 

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