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Private Equity Experience

Private Equity Experience

著者: Ed Barton Rory Liebhart and Emily Sander
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Demystify the world of private equity with insider knowledge.


Join hosts Ed Barton, Rory Liebhart, and Emily Sander - seasoned professionals who have worked from all angles as C-suite leaders, private equity managing directors, and investors.


In this podcast, they break down complex private equity concepts into everyday language. You'll gain a clear understanding of the PE landscape, key players, and market dynamics. Expect practical insights on deal-making, growth strategies for founders and management teams, and exit strategies. Plus, hear real-world examples and real-time breakdowns of trending news stories.


Whether you're a seasoned pro or just starting out, considering selling your company to a private equity firm, or simply curious about this lucrative world, this podcast will help you navigate the private equity landscape with confidence.

© 2025 Private Equity Experience
マネジメント マネジメント・リーダーシップ リーダーシップ 個人ファイナンス 経済学
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  • Rollin' Up Value: The Strategy & Risks of Private Equity Rollup Mergers
    2025/07/24

    Overview:

    In this episode of The Private Equity Experience, Emily, Rory, and Ed dive into the world of rollup mergers in private equity. Rollup mergers involve acquiring and consolidating multiple smaller companies in the same industry to create a larger, more efficient entity. The hosts discuss the intricacies, challenges, and potential pitfalls of this strategy, providing insights into how private equity firms can navigate these complex transactions successfully.

    Key Discussions:
    Understanding Rollup Strategies:
    A rollup strategy involves acquiring and integrating multiple businesses in the same industry to achieve economies of scale and cost reductions.
    Example: Consolidating independent accounting firms into a larger firm to leverage shared resources and economies of scale.

    Benefits of Rollup Mergers:
    Economies of Scale: Consolidating businesses can lead to significant cost savings
    through shared resources, operations, and infrastructure.
    Increased Valuation: A larger, integrated entity often commands a higher valuation multiple.
    Operational Efficiency: Standardizing processes and leveraging technology can lead to operational improvements and cost synergies.

    Challenges & Risks:
    Integration Complexity: Merging multiple businesses with different cultures, processes, and systems can be challenging.
    Regulatory & Antitrust Concerns: Regulatory scrutiny may increase as the consolidated entity gains market share.
    Financial Risks: Leveraging debt to finance multiple acquisitions can increase financial risk, especially if acquisition targets underperform.
    Customer Alienation: The loss of personalization and unique value propositions can drive customers away.

    Execution Matters:
    Hiring Experienced Executives: Bringing in experienced managers who understand the complexities of business integration is crucial.
    Transparent Communication: Being transparent about rollup strategy with potential acquisition targets and investors can mitigate future issues.
    Risk Management: This strategy requires careful planning and continuous monitoring to mitigate both financial and integration risks.

    Listener’s Questions:
    Q: Can a founder implement a mini rollup strategy to make their company more attractive to private equity groups?

    A: Yes, positioning your business as a scalable platform with integration capabilities can make it more appealing to investors looking for a rollup target.

    Q: Are there private equity firms that specialize in rollups?

    A: While many firms may incorporate rollup strategies as part of their broader investment approach, few specialize exclusively in this area. The successful execution of a rollup often depends more on the depth of operational expertise within the PE firm rather than specialization alone.

    #PrivateEquity #RollupMergers #MergersAndAcquisitions #InvestmentStrategy #BusinessIntegration

    Who We Are

    If we haven’t met before—Hi! We’re a team of professionals who’ve worked together at multiple companies, seen private equity from all sides, and are here to share what we’ve learned to help you succeed. Ed Barton brings decades of tax and financial strategy experience; Rory Liebhart is a finance and M&A pro with a track record of high-growth exits; and Emily Sander is a former Chief of Staff, multi-time author, podcast host, and founder of Next Level Coaching, helping leaders and organizations accelerate their growth.


    Connect with Ed

    Connect with Emily

    Connect with Rory

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    39 分
  • Leveraged Buyouts Uncovered: Private Equity’s High-Stakes Game
    2025/07/10

    In Episode 15, hosts Emily Sanders and Rory Liebhart delve into the world of Leveraged Buyouts (LBOs), examining how private equity firms and other entities utilize substantial debt to acquire companies. Joined by expert Edward Barton, the conversation examines the mechanics of an LBO, its benefits and substantial risks, including cash flow pressure and covenant breaches. The episode also addresses why the current private equity market is experiencing a "log jam" due to factors like high valuations from past years and rising interest rates.

    Key Takeaways & Discussion Highlights (Leveraged Deal Structure)

    What is an LBO?
    An LBO is a private equity funding strategy where a significant portion of the purchase price is financed through debt. The acquirer uses the target company's future cash flow to service the loan (12:01, Rory).
    Example: A private equity firm paid ~$50M + ~$140M debt for a business with $11-13M in annual free cash flow (12:01, Ed/Rory).

    The Players in an LBO & How They Make Money

    Private Equity Firms: Profit through appreciation (sale at higher valuation), dividends (cash distributions - corrected later in the episode), and management fees (20:22, Edward; 23:37, Emily/Rory).

    Company/Sellers: May use an LBO if the buyers (often PE firms) need a loan to close, sometimes offering a quicker exit or a multiple on EBITDA (21:07, Edward).

    Lenders/Banks: Earn interest payments and fees (warrants/loan fees may be required). Crucially, they often control the company's cash flow through restrictive covenants and account control agreements (19:17, Emily/Rory, 25:06, Rory). Defaults can lead to forced sales or bankruptcy filings (25:42, Ed/Rory).

    Benefits of LBOs

    High Returns for PE: If executed well, debt allows leveraging a smaller equity investment into a larger holding, potentially increasing returns (20:37, Edward/Rory).
    Opportunity for Turnaround: Skilled management can restructure ("staple down" goodwill) and grow the business, repaying debt and realizing the equity gain (*28:02, Edward). (Example: debt-financed turnaround selling back to seller, or using debt to fuel growth).

    Significant Risks and Challenges

    Refinancing Risk & Maturity Shock: Large balloon payments due at specific dates (Term Sheets) if the hold period ends without selling or refinancing (13:28, Ed, 15:44, Emily).
    Covenant Burden: Strict financial covenants (audited at least annually) requiring operational excellence. Failure to meet them ($0.99EPS negative?) can trigger costly refinancing or sale (15:44, Emily, 25:42, Ed/Rory). Being "greased by deals?" Ask about amortization.
    Personal Guarantee Risk for Management: Founders or leaders can sometimes personally guarantee debt, linking their personal financial health to the business outcome (19:49, Rory, 23:16, Edward).
    Cash Flow Dependence: Requires consistent EBITDA to service interest payments, lessening flexibility (21:07, Edward, 26:42, Ed). Low EBITDA increases the risk of default (*31:25,Rory).

    Who We Are

    If we haven’t met before—Hi! We’re a team of professionals who’ve worked together at multiple companies, seen private equity from all sides, and are here to share what we’ve learned to help you succeed. Ed Barton brings decades of tax and financial strategy experience; Rory Liebhart is a finance and M&A pro with a track record of high-growth exits; and Emily Sander is a former Chief of Staff, multi-time author, podcast host, and founder of Next Level Coaching, helping leaders and organizations accelerate their growth.


    Connect with Ed

    Connect with Emily

    Connect with Rory

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    37 分
  • The Dilution Dilemma: Navigating the World of Equity Funding
    2025/06/26

    Introduction to Equity Dilution and Its Impact on Investors

    Equity Dilution Definition: Occurs when a company issues new shares to raise capital, leading to a decrease in the ownership percentage of existing shareholders.

    Founder's Perspective: Founders often face the decision of whether to retain complete control over their company or raise capital by accepting dilution, which can significantly impact their future earnings and control.

    Key Stakeholders: Includes founders, employees, and investors who are all affected by dilution.

    💡 Understanding the Mechanics of Dilution

    Cap Table Management: A cap table tracks ownership percentages. New funding rounds can disrupt the cap table, reducing existing stakeholders' ownership.

    Employee Stock Options: Commonly part of compensation packages in growing companies, often subject to dilution effects.

    Investor Leverage: Investors with high demand for a company's stock can negotiate for favorable terms, minimizing dilution for founders.

    🌟 Key Strategies to Minimize Dilution

    Bootstrapping: Funding the business without external capital to avoid giving up ownership.

    Strategic Capital Raises: Raising funds when the company is performing well to leverage maximum valuation.

    Structured Shares: Implementing classes of shares (e.g., with voting rights) to maintain control.

    🎯 Why Timing Matters

    Critical Path Investments: Companies often raise capital in dire situations, leading to unfavorable terms for founders.

    Market Dynamics: A company's performance significantly influences its negotiating power during fundraising rounds.

    🔄 Balancing Control and Growth

    Founder Autonomy: Utilizing founder shares and supermajority voting rights to maintain control even with minority ownership.

    Employee Retention: Maintaining an adequate employee stock pool to attract and retain talent without excessive dilution.

    🗨️ Expert Insights from Rory and Ed

    Rory Liebhart: Highlights the importance of legal and financial advisors in navigating complex cap tables and negotiations.

    Ed Barton: Emphasizes the strategic use of multiple funding rounds to enhance valuation and minimize dilution.

    🔗 Essential Links

    On-Ramp to Exit: Navigating Five Key Steps to Exiting Your Privately Held Business

    The Exit Strategy Playbook by Adam Coffey

    🚨 Conclusion: Managing Dilution for Optimal Outcomes

    Risk Management: Understand the risks of each funding round and its impact on ownership.

    Exit Strategy: Plan for the future with a clear exit strategy that balances growth and control.


    Join us next time on the Private Equity Experience Podcast for more insightful discus

    Who We Are

    If we haven’t met before—Hi! We’re a team of professionals who’ve worked together at multiple companies, seen private equity from all sides, and are here to share what we’ve learned to help you succeed. Ed Barton brings decades of tax and financial strategy experience; Rory Liebhart is a finance and M&A pro with a track record of high-growth exits; and Emily Sander is a former Chief of Staff, multi-time author, podcast host, and founder of Next Level Coaching, helping leaders and organizations accelerate their growth.


    Connect with Ed

    Connect with Emily

    Connect with Rory

    続きを読む 一部表示
    31 分

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