**Food For Thought: For The Middle Market PE Firms Out There** 🧠 🥙
In a recent conversation the Morningside Group had with one of our larger #PrivateEquity clients we compared the current M&A landscape to the Watchmaking industry.
Our question was simple:
How's the market?
Their response was even simpler:
Right now, it is EASY to find success with "ROLEX" companies. Companies that have invested the hours and due diligence into themselves during hold periods; improving their efficiencies, their people, and their systems to ensure they laid the foundation for scale over time.
However, even though they are only a couple of steps away, the "TAG Heuer" companies are struggling to find the same success. Which for investors and owners is nauseating, because at the end of the day, they're still great timepieces (companies).
The moral of the story is that most PE backed middle-market companies are content. They aren't looking for big organizational changes that will effect their historic processes, their tenured people, or the systems that have been in place for years. It's TIME consuming. (Fair)
They're profitable and that should be enough for successful exit.
Frankly, it is not - the Firms and Portfolio Companies that continue to condition their companies, bring in outside eyes & ears for perspective, and promote change will continue to be the big winners in 2024 and beyond.
Dive deep in due diligence, invest internally, and change the status quo.
#Money #MergersandAcquisitions #VentureCap #VC #Consulting
Global Head of Legal at idealista
1moAlways a pleasure to work with Iñigo del Val Andrés Mochales Forero Cristina Palau Redolat and the A&O team, thank you for your support throughout the years!!