Create significant wealth by acquiring profitable private companies....

In the United States (and other markets), many business owners are in their 60’s, 70’s and older. Their kids aren’t interested in the family business. Their grandkids generally don’t have the background, skill, capital or attention span to run the business. As a result, there are tens of thousands of profitable businesses for sale and relatively few potential buyers.

How can you capitalize on the opportunity?

If you haven't already done so, identify a sector that's ripe for consolidation, form a team to execute a rollup strategy, raise capital, take your holding company public (yes you can, bear with us) and acquire profitable companies. Working with us, you'll be able to do all of this efficiently and effectively, while retaining substantially more equity in your holding company. We provide significant support and coaching. Our proven strategy has already been used by other acquisition entrepreneurs to create more than $8 billion in shareholder value.

There are very significant advantages to going public and then making acquisitions:

1. Business brokers are more likely to show businesses for sale because the trust, credibility, and transparency of being a public company generally means the entrepreneur has a better chance of closing a deal, something business brokers happen to care a lot about :)

2. Business sellers prefer dealing with public companies for the same reasons noted above. They have a higher degree of comfort and confidence that an offer is real and that a proposed transaction will close.

3. Business sellers are often willing to be more flexible on acquisition terms, including accepting stock, warrants, preferred shares, notes, and cash payments over time. Our clients have purchased businesses on unbelievable terms that were only possible because they were publicly listed. Sometimes, without any dilution at all.

4. Public companies can attract acquisition financing and working capital faster and easier.

5. Public companies find it easier to attract a highly qualified board of directors, a strong advisory board and senior level executives, all of whom are positively influenced by stock option plan participation.

6. Public companies are typically valued at 10x to 15x earnings (or more) while private companies can often be purchased for 2x to 4x SDE or EBITDA. Let's say you spend $4 million to purchase a business earning $1 million. As a publicly listed company, that $1 million in earnings can be worth $8 million to $15+ million. Each decent size transaction can add millions in shareholder wealth.

Three case studies:

1. Onfolio Holdings had about $250k in revenue when they engaged us. They originally committed to going public by direct listing on the OTC. We started the process by structuring several private placements where the entrepreneur raised $4.5 million through his personal network, professional network and then advertising. The net proceeds were used to make several acquisitions and continue the public listing process. At the time, the equity markets were hot, and we were able to pivot from a direct listing to traditional IPO on NASDAQ. We brought in the investment bankers and the company raised $13.7 million in additional capital. The net proceeds were used to make several more acquisitions. All this in a three-year cycle.

2. SMTP had about $1.5 million in revenue and $75,000 in profit when they engaged us. They committed to going public by direct listing on OTC. We started the process by structuring a private placement where the entrepreneur raised $100,000 from his friends and family at a $3.5 million valuation. The company didn't need the money but needed to have enough shareholders to qualify for trading. After going public, the entrepreneur acquired three businesses. One was just for technology; another was a startup that subsequently failed and the last was a startup that boomed. The company eventually changed its name to SharpSpring, uplisted to NASDAQ, raised about $16 million and a few years later was acquired for $240 million in cash. All this in a seven-year cycle.

3. Open Text was a company our founder supported when he was a partner of a large investment banking firm. As a startup, the company raised about $2 million, commercialized their technology, and raised about $45 million in a traditional IPO. Although they had a great product, they were several years early to fully capitalize on it. The company then pivoted and subsequently made dozens of acquisitions. Open Text trades on NASDAQ with a recent valuation of $10.3 billion. All this in a twenty-five-year cycle.

Is this for you?

We're looking for entrepreneurs who are smart, growth-minded, experienced and are actively acquiring profitable private companies, or want to be better positioned to do so. People who have excelled at acquisition entrepreneurship have typically been in C-Suite positions for several years, have a large personal and professional network, have been point person on one or more acquisitions, and have been involved in raising debt and/or equity financing.

Who are we?

The founder of our company has been an institutionally ranked technology analyst, partner of a 700-person investment banking firm, analyst for two multi-billion-dollar asset management firms and has taken seventeen companies public, included four of his own.

Next Steps:

If you have the background, skill and expertise necessary to execute well, and have the personal or professional resources to capitalize on our process and strategies - contact us.