Proposition
What we offer and how we are different from traditional SME and lower middle market acquirers
What we offer
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We aim to acquire a small number of businesses, grow them incrementally, and hold them indefinitely with the help of excellent management teams with invested interest.
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We align the deal structures so that all stakeholders' interests are aligned. The structures generally include equity funding from several high-net-worth investors, debt, and deferred payments/earnouts.
We have an extensive network of industry leaders across multiple sectors who can advise and support in a formal board position or as an advisor. We can also use our network to find key individuals to fill gaps in a management team or to assist in a temporary capacity to improve functions such as accounts, operations and sales.
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Our experienced network of investors, operators, and advisors are well equipped to handle the operational and strategic changes that come from a change in ownership. We look to add value both operationally and strategically.
What makes us different from traditional SME and lower middle market acquirers?
LegacyTransition Capital's offering has been formed by working in mergers and acquisitions in the lower mid-market and understanding sellers' challenges in finding a suitable acquirer. Our values and principles reflect this, and we aim to be the best acquirer in the market.
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The buyer pool at this end of the market can be limited. Most institutional acquirers, whether private equity or corporate buyers, would view established businesses below £2m net profit as too small to impact existing performance. LegacyTransition Capital see established firms of this size as agile and adaptable, with the potential for long-term sustained growth.
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The two most common types of acquirers are private equity firms and corporate acquirers. Private Equity generally takes a more aggressive approach to investing, with a short-term investment horizon of 4-7 years and a rigorous due diligence process, which can lead to many agreed deals falling through. Additionally, businesses of this size would be bolt-ons to an existing portfolio company. Bolt-on valuations are generally lower, and costs are usually removed from the acquired business.
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Corporate acquirers have entrenched cultures and "ways of doing business", which can result in cultural clashes and staff turnover. Additionally, there are rarely equity incentive schemes for management that stay with the business, and duplicate roles can lead to high redundancies.