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A Look Inside the Head of a Strategic Buyer

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About the Episode

How do strategic buyers think? Listen as we talk with Charlie Burckmyer, head of M&A at Culligan International, the water company and a $2 billion strategic buyer. We cover the acquisition process, what motivates Culligan to acquire smaller competitors, common mistakes sellers make, and what types of businesses and value drivers strategic buyers find most attractive. If you’re considering selling your company to a strategic acquirer, you’ll find this show packed with helpful tips on the psychology of strategic buyers and what motivates them to pay top dollar for your company.

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In this Episode

3:10 What growth strategies fall under corporate development?
4:00 What is your stance on corporations buying vs. building in stable tech environments to move faster and gain a commercial presence?
6:00 Why partner vs. acquiring a company?
7:00 What types of companies do you acquire?
9:30 How does corporate venture capital work?
10:25 Why would a target sell a minority interest, as opposed to selling a majority interest?
13:25 How do you structure a partnership with a potential target?
16:00 How common is it that a partnership turns into a full acquisition?
16:45 Why does Culligan pursue inorganic growth such as acquisitions?
17:45 How is an inorganic growth strategy formed?
19:20 How messy is the strategic planning process?
22:00 What’s your advice to a seller of a business that may sell to a strategic buyer?
24:30 What are the most common concerns sellers have when they are approached by a strategic buyer?
26:30 How important is the seller’s team?
28:00 To what extent do you integrate companies?
29:00 What are some of the top challenges when working with sellers of businesses?
34:35 How far in advance should the seller begin preparing their business for sale?
36:00 How is there information asymmetry?
37:20 How can such a large company consider making such small acquisitions?
38:45 How do you determine fit?
40:10 How does a seller determine the validity of an unsolicited offer?
41:45 What is your outreach strategy?
43:00 How prepared should a seller be for an unsolicited offer?
45:30 How many meetings, on average, do you require before you submit an LOI?
49:15 How do you value a potential target?
51:00 What is a typical deal structure?
52:15 What is your take on earnouts?
53:45 How often do you use seller notes?
54:00 How often do you use holdbacks?
56:15 Do you include a financing contingency?
57:50 How important is it to retain the owner(s)?
59:00 How do you handle an owner who wants to retire?
1:00:10 How intense are negotiations?
1:02:15 How long do negotiations normally take?
1:06:15 What is the impact of COVID on valuations?

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Highlights

  • Corporations choose to partner with a venture-stage company instead of acquiring it so they can share the risk with the target.
  • The median-sized business that Culligan (a $2 billion per year company) acquires is a $10 million per year business.
  • Culligan closes on 94% to 95% of the LOIs that are accepted.
  • It usually takes about one month to negotiate the letter of intent.

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Meet Our Guest

Charlie Burckmyer

Charlie Burckmyer Share on Linkedin

Sr. Director of M&A and Corporate Development with Culligan International | Boston, Massachusetts

Charlie Burckmyer is Sr. Director of M&A and Corporate Development with Culligan International. He has been a Director of Culligan’s global Corporate Development team since 2017. Charlie joined Culligan from JMC, a middle-market Private Equity fund based in Boston. At JMC, Charlie led the firm’s business development efforts to identify successful acquisition candidates in support of JMC’s Platform Strategy.

Prior to joining JMC, Charlie co-founded Knob Hill Partners, a Boston-based private investment firm. He led several control and minority investment projects, including the firm’s platform acquisition of Sage Data Security. At Sage, Charlie served on the Board of Directors and as its President. He led the company through a period of double-digit growth. He began his principal investing career in 2008 following a successful early career in sales leadership. Charlie holds a Bachelor of Arts in Economics and English from Bucknell University and an MBA, magna cum laude, from Babson College. He and his family live on the North Shore of Boston.

LinkedIn LinkedIn: https://www.linkedin.com/in/charles-burckmyer-6937b1/

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