Mergers & Acquisitions

Resources: M&A Talk Podcast

At M&A Talk we bring you exclusive interviews with experts in business sales, valuations, mergers and acquisitions and more. We talk to the most experienced professionals in the industry to uncover their secrets.

Behind the Scenes of Private Equity with Jim Evanger & Brent Paris

Behind the Scenes of Private Equity with Jim Evanger & Brent Paris

Jim Evanger and Brent Paris

Private Equity

How do private equity firms operate, and how do they create value for their investors? What is the role of the general partner and an operating partner? How does a PE fund operate? What do PE firms look for in an investment? What are the multiples for middle-market companies? These are the subjects of this recent Roundtable episode of M&A Talk with Brent Paris, Managing Partner of Dubin Clark, a middle-market PE firm, and Jim Evanger, an operating partner and interim CEO for private equity firms.

Guests Profiles

Jim Evanger

Behind the Scenes of Private Equity with Jim Evanger & Brent Paris

Jim Evanger has been a Private Equity Operating Partner and Interim CEO for PE-owned businesses ranging in size between $5 million to $100 million. 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 to a strategic industry buyer, 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.
Jim 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.

Brent Paris

Behind the Scenes of Private Equity with Jim Evanger & Brent Paris

Brent Paris joined Dubin Clark, a middle-market private equity firm, in 2001 and has completed more than seventy middle-market transactions. At Dubin Clark, Brent focuses on sourcing, financing, executing, and overseeing platform and add-on acquisitions. Prior to Dubin Clark, Brent was an Associate for investment banking firm Latek Capital Corp and, during business school, worked as an Analyst with money management firms Waveland Capital Management and Brinson Partners. Brent served as an Accounting Manager for money management firm Grosvenor Capital Management and as a Senior Tax Accountant for public accounting firm Altschuler, Melvoin & Glasser LLP, which is now part of RSM US (formerly McGladrey & Pullen LLP). Brent currently serves on the boards of directors of Affordable Water Heaters & Plumbing, CE Rental, Euro Motorparts Group, InProduction, iROCKER, Marquee Event Group, SmartSource, Super Home Services, and CustomDrive. He is the current Chair of Beaches Habitat for Humanity, a board member for Association for Corporate Growth (ACG) and a member of Young Presidents’ Organization (YPO). Brent received a B.S. in Accounting from Indiana University Kelley School of Business, an M.B.A. in Finance & Entrepreneurship from The University of Chicago Booth Graduate School of Business, an MS Taxation from DePaul University Kellstadt Graduate School of Business, and has a CPA (inactive). Outside of work, Brent enjoys time with his family, travel, and golf. Brent also competes in various Spartan races throughout the region.


Highlights

  • MOIC = Multiple on Invested Capital.
  • Multiple expansion is not a myth.
  • Limited partners do not have a say in the investments the PE firm makes for a committed fund.
  • An investment committee makes investment decisions at the PE firm and the committee must often be unanimous.

Topics Covered

  • How is your time spent as a general partner of a private equity firm? [2:20]
  • What is an operating partner? [3:45]
  • How does a PE firm operate at a high level? [5:10]
  • Who are the limited partners (investors)? [7:00]
  • How do PE funds operate? [10:30]
  • To what extent do the investors have a say in the investment? [11:50]
  • Limited partner co-investment rights [14:00]
  • What’s the focus of an operating partner in a transaction? [16:15]
  • How many decision makers at a PE firm are involved in acquiring a company? [18:25]
  • Do most PE firms have an industry specialty? [21:05]
  • What limitations does the investment mandate include? [22:25]
  • How does the fund life cycle typically work? [23:20]
  • Middle-market multiples [24:00]
  • Do you retain an investment banker to exit your investments? [25:50]
  • Platform vs. add-on acquisitions [29:00]
  • What’s the role of an operating partner in the investment cycle? [29:50]
  • What is the difference in perspective between the general partner and the operating partner of a PE firm? [31:00]
  • How do PE firms use operating partners? [34:00]
  • What are the key levers required to manage multiple investments simultaneously? [37:00]
  • Debt-to-EBITDA multiples [39:05]
  • What KPIs do you use to evaluate an investment? [40:20]
  • What do you look for in an investment? [42:30]
  • Where do you think the market will take us next? [45:25]
A Roadmap to the Successful Sale of Your Business (152 pages)

A Roadmap to the Successful Sale of Your Business (152 pages)

You could spend a lifetime figuring out how to successfully sell your business and still end up confused or clueless. What if you can stop the guesswork and start taking action now?

Read more