Building multiple ‘Ready to Transact’ M&A Pipeline quickly!

“We want to make multiple smaller acquisitions. Our in-house team has limited bandwidth and we want to set up an extended Corp Dev team to meet our inorganic goals.” This was the brief from the customer who at the time of starting our engagement had 6 different mandates from 5 different sub-sectors in DTC like Pet Care, Personal Care, Fashion, Retail, and Lifestyle to name a few.

Each mandate needed a large amount of prework because the customer was particular about the sub-sectors, the KPIs in each of them, and targets’ readiness to transact. The aim was to quickly create high-quality transaction solutions across mandates while operating as an outsourced corporate development team.

As the company thrives on an acquisition model, they have adopted a Programmatic M&A approach where they wanted a continuous pipeline of ‘Ready to Transact’ leads, challenge was to maintain quality in profiles and consistency in delivery, over time.

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“Their team understood each of our mandates in-depth and while they started with a couple of mandates, they were soon able to create a healthy pipeline of targets for all our mandates. We were very impressed with their turnaround time whilst maintaining quality.”

As the customer was  e aligned with the Programmatic M&A approach, the GrowthPal team realized the importance of building parallel M&A pipelines for each of their targeted sub-sectors. Each of these sub-sectors had different acquisition objectives, online and geographic presence, and a few very sector - specific KPIs.

A team was set up consisting of an M&A Head working closely with 3 analysts each catering to one sub-sector. This 4 member team worked closely with the D2C company’s sector teams on understanding the nitty gritty of the mandates and accordingly building a continuous but relevant pipeline of leads that were ‘Ready to Transact’.

With GrowthPal’s AI/ML algorithm and a rich database of 2Mn+ companies, the team quickly identified a set of matching companies that met the mandate requirements. The analyst team was tasked to then have a personal dialogue with the leadership team of these matched companies to validate the information and also collect sector - specific KPIs that mattered to our customer.

The revenue and an EBITDA multiple were also given to further set the valuation expectation, all while maintaining confidentiality without revealing the buy-side customer’s name. The team made an introduction only when the sell sides were OK with the valuation estimate and wanted to proceed to further rounds.

The above process helped the D2C customer get their hands on a highly qualified list of target recommendations that were Ready to Transact. The  curation process helped them close more deals than planned.

“We are quite happy with the GrowthPal team and have recently renewed with them for the 5th time running. While earlier our Corp Dev sourcing team feared their quality in deliverables, time and again GrowthPal team has proven themselves and helped our Corp Dev team to now focus on transactions. We can now blindly trust on GrowthPal for our deal sourcing.”

In our engagement of 2+ years, we have built a ‘Mandate Level’ universe of 110,000+ for this customer, with a data and tech level shortlist that spans 3000+. The GrowthPal analyst team has run campaigns and interacted with 1100+ of these companies to build a ‘Ready to Transact’ pipeline of 190+.