Navigating the M&A landscape

News, insights and updates from the team at Bloom Equity Partners

Happy Friday Founders & Friends!

Thanks for joining us for another edition of the weekly bloom. Let’s get into it 🚀🚀

What we’ve been reading and listening to recently..

📚 Cash Flow Shockwaves

📚 There’s Only Three Levers to Grow a SaaS Business

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Navigating the M&A landscape Part 1: What’s a CIM?

Given that a lot of founders and operators are readers of the weekly bloom, we wanted to share some insights on the M&A process from a sellers POV.

A Confidential Information Memorandum (CIM) is a critical piece of any sell side effort. On a high level, it is a comprehensive presentation that serves as a marketing document during an M&A process.

📃 What’s included in a CIM?

All CIM’s will be tailored differently depending on the business up for sale, yet there are a few common elements that we will highlight below:

1. Executive Summary

   • High level overview of the content.

   • Common elements include: transaction overview, managements forwarding looking plans and sellers rationale.

2. Key Investment Considerations

   • 5-10 elements of a business that would interest a potential buyer and how each differentiates the business from competitors.

3. Growth Opportunities

   • This section outlines the different growth opportunities that could exist for a potential buyer (geographical expansion, product expansion, M&A opportunities).

   • This is a thoroughly analyzed section so should aim to be very detailed and generate excitement in potential buyers.

4. Company Overview

   • This section tells the story and history of the target business.

   • Common elements include: product overview, sales & marketing strategy, value add capabilities, and a management highlight.

5. Industry Overview

   • In depth analysis of target companies industry (total addressable market, growth rates and opportunities, industry dynamics and competition)

   • Ideally this should communicate that the industry is profitable and is growing for the foreseeable future.

6. Financial Overview

   • Goal of the financial overview is to provide the target companies historical financials, future forecasted financials and highlight any relevant KPIs.

     TLDR: CIM’s are a great opportunity to optimally position your business with the goal of attracting buyers and helping to drive up the valuation. Stay tuned for more due diligence insights and quick takes!

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News from the Industry: deals, deals, and more deals 💰

With Capital Levels High and Stocks Low, Going-Private Deals Rise

TPG records $199 million earnings in first quarter since IPO

Thoma Bravo reportedly in takeover talks with Temenos

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Favorites from the Ecosystem

Investors👇…..

Sandy Kory @sandykory

Quality public SaaS companies (R40-R50) are trading at 4.5-5x ARR I did not see this type of correction coming Seems like there is a lot of value in public SaaS Tho amplitude of current negativity is well below amplitude of positivity of late last year

Ho Nam @honam

Everyone knows this and yet there is so much confusion at times. Growth doesn’t create value (it depends on how it was achieved). So why do so many people get confused? It’s an endlessly fascinating topic. Would love to hear what others have observed and their explanations.

Founders👇…..

Michael Martocci 🚀 SwagUp @MichaelMartocci

These markets force startups to have an intense focus and high level of execution Try to harness that intensity and make it a core tenant of your culture going forward The best companies treat everyday like they are going to die if they don’t move the ball forward

David Frankel @dafrankel

Does your startup have an impressive cash stockpile? If so, the following will soon be plentiful: ⭐️ Talent 🥊 Competitors looking for soft landings 📣 Affordable customer acquisition Are you ready to take advantage of this moment? A few thoughts on how to prepare: /🧵

Operators👇….

MM PE Backed CFO @cfo_mm

Going through a process to evaluate all of our investments. Some are through the P&L and some are through the BS. I calculate a Creation Multiple for each one. Defined as dollars of investment required per dollar of steady-state EBITDA. 1/

Michael Girdley @girdley

Over 25 years and 1,000s of employees, I've learned: Good bosses use some uncommon tricks. Here are the 9 of them you should use:

End Note 🔚

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About Bloom Equity Partners

Bloom Equity Partners is a lower mid-market software-focused private equity firm, leveraging deep operational and commercial experience to create enduring market value for the benefit of our investors, founders, and their companies.