10 Years of Private Equity


UTLUNDA GÅRD

+46 70 631 28 22


bjorn@utlundagard.se

UTLUNDA GÅRD


Utlunda Gård 

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Mar 22, 2019

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Email: bjorn@utlundagard.se

Phone: +46 70 631 28 22



10 Years with Private Equity

 - a survival guide!



Part 1 - Finding the right PE


So you have decided to sell your Company?

Your competitors are of course the ususal supects, but have you thought about Private Equity? If not, think again. Teaming up with the right Private Equity fund can be a great experience...if you are prepared. On the other hand, if you choose the wrong PE fund, or if business takes a dip, there is a massive risk your experience will not be so positive.

Being a CEO of a PE-owned Company means you will be expected to run on full speed throughout the full term. For me 10 years was enough. In July 2018, shortly after I handed in my resignation as CEO, I had my 10 year anniversary with Private Equity funds as majority shareholders of the company I founded. Personnally it's been a great learning experience.

OUR HISTORY


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OUR VISION


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USEFUL INFO


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In the PE world, The Company I founded back in 1995, was a great success. Being sold twice within nine years and returning good proceeds to the shareholders - we've surely met they no.1. criteria for portfolio companies - create great shareholder value!

Bear in mind, if you choose to enter the PE world - creating share holder value is what it's all about!


I will write a series of articles here on linked-in on my own persepctive of pro's and con's working with PE funds, believe me, there are plenty of both kinds. So the most important is to find your best match. Private Equity funds come in all shapes and sizes, Small Cap - buyout funds focusing om companies with revenues of €10-€30 million, Mid Cap - buyout funds focusing on companies between €30 million and closer to €100 million, and above that you have Large Cap, that basically has no limit...


Again, this is my subjective, outside view on how the Private Equity World functions...

Finding PE funds with deep pockets is usually not the problem. Most Private Equity funds surround themselves with a lot of advisors, Investment Bankers, whose task it is to find new target companies, and guide them through the acquisition process. If you want real traction and be properly prepared in the sale of your company, hire your own advisor, but be prepared that the costs will usually be a couple of percent on the hard earned value of your company. Regardless, if you have a good company, and are looking to sell - The PE funds are likely to come charging for you.

I've had the great pleasure in working in sector focused Tech- and Media funds, as well as funds that are sector agnostic, (meaning that they will invest opportunistic in anything that looks, smells or feels like a good deal), and generally speaking both of them could be your perfect fit. It all comes down to the personality and how you "click" with the deal team. But beware, all markets have their share of a**holes, and the Private Equity sector is full of narcissistic know-it-all personalities - some of them you can spot right away, others are harder to catch - go by your gut feeling, check references with previous management teams and if you feel the fit is not right - just run away from them!

Still, "the good guys" may be just as bad for you - you need to stress test them throughout the transaction process, to find out how much you will be controlling the future development of your company.

An easy test is to bite down really hard on a few paragraphs in the SPA (Share Purchase Agreement), or SHA (Share Holders Agreement), and see how they react. Remember, every single paragraph of your agreements are negotiable - there is no such thing as an industry standard - you set the rules!

So that was the teaser - going forward I will write about all the aspects of being a CEO in the PE world, and hopefully help guiding you in your future quest, and make you better prepared!


Björn Lifvergren

WHY CHOOSE US?


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