The Hunter vs. The Hunted in M&A – A View From Both Sides

About the Episode

What’s it like to be on both sides of the table, as the hunter (the acquirer) and the hunted (the acquired), in an M&A transaction? In this show, we talk with private equity specialist Jim Evanger in a deep dive into the process of selling your company, viewing it from two sides. We cover preparing your company for sale, handling the initial negotiations and the letter of intent, conducting due diligence, the closing process, determining the transaction structure, and managing the integration process – all from the perspective of both the buyer and the seller.

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In this Episode

9:10 What’s the role of an operating partner in a private equity firm?
12:20 How involved are you in the search process as an operating partner?
13:15 Do operating partners co-invest?
14:15 What’s the biggest difference between the role of the hunted vs. the hunter?
14:55 Why do you have to invest so much time searching for and assessing opportunities as an acquirer?
16:40 What does your investment criteria look like for your current fund?
18:30 Is the criteria different for a platform company vs. an add-on company?
19:50 Are most PE firms industry-agnostic?
20:10 The investment thesis
22:30 What “clicked” once you switched from being the hunted to the hunter?
24:30 How important are the numbers when you’re evaluating a potential acquisition?
25:40 How much value do you place on potential? Do buyers pay for potential?
29:00 What’s your criteria when you’re initially evaluating a business?
30:30 Will you do a deal if you can’t talk to the employees?
31:30 How does the seller build trust with the buyer?
32:50 How do you inform your management team?
35:10 How big should a retention bonus be for an employee?
37:35 When should you tell your employees you’re selling your business?
41:00 How important is it for the management team to stay?
42:25 How many businesses do you look at to acquire one business?
43:40 What are some of the knockout factors that cause you to walk away from a business?
46:10 What’s your process of evaluating a company before you make an offer?
48:20 What are the biggest mistakes sellers make in the initial meetings with buyers?
51:55 How much do you typically spend conducting due diligence on one transaction?
52:50 Why do you say “no” to a deal?
54:50 What are your preferred valuation methods?
55:55 How relevant is the internal rate of return (IRR) to the attractiveness of an investment?
57:45 Do you perform a discounted cash flow (DCF) valuation?
59:00 Negotiating the letter of intent
1:02:50 What are the biggest mistakes sellers make in due diligence?
1:06:00 What is a quality of earnings (Q of E) analysis?
1:08:25 What else do you consider during due diligence?
1:10:45 How do you typically structure a transaction?
1:16:15 How does an equity rollover work?
1:18:40 How can a seller research a PE firm’s reputation?
1:20:35 What does the seller need to know about integration?
1:22:35 How does the second bite of the apple work?


  • The funnel is critical if you’re the hunter (acquirer). You’re constantly filling the funnel with as much lead flow as you can. Hunting is primarily a numbers game, not an emotional process, while selling a business is an emotional process.
  • Acquirers use an acquisition scorecard to rate the attractiveness and fit of a potential acquisition.
  • Total addressable market (TAM) is an important criteria for private equity (PE) firms.
  • MOIC = Money On Invested Capital

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Meet Our Guest

Jim Evanger

Jim Evanger

Operating Partner and Interim CEO for PE-owned businesses

Jim Evanger has had a diverse leadership career, having built executive teams in Fortune 100, middle market, and entrepreneurial start-up businesses. His industry experience spans healthcare, retail, franchising, light manufacturing, and private equity. Most recently, Jim has been a Private Equity Operating Partner and Interim CEO for PE-owned businesses ranging in size between $5 million to $100 million.

Jim came up through the ranks at Merck & Co., beginning as a sales professional and later as a manager, building a team across 33 states and Canada. After almost 10 years in corporate America, Jim launched his first business that franchised itself to 14 states across the US. After selling that franchise business, he built and led high-performing teams in diverse small to mid-sized companies, some of which are private-equity owned. This experience helped propel Jim into various Operating Partner roles with firms such as Dubin Clark & Co. and Latticework Capital, where he sits on Boards and advises CEOs on strategy and execution.

Location Location: United States

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