Mergers & Acquisitions

M&A Talk Podcast

M&A Talk is the #1 podcast on mergers & acquisitions. 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.

What a Buyer Looks for When Acquiring a Middle-Market Business

What a Buyer Looks for When Acquiring a Middle-Market Business

Malcolm Peace

Middle-Market Acquisitions

When selling your company, knowing what a buyer looks for is invaluable. Malcolm Peace owns an investment firm focused on buying and growing middle-market businesses. He talks about why he focuses on blue-collar businesses in Texas and taking them to the next level of growth. Malcolm discusses what a buyer looks for when evaluating a company, how technology can be used to help some owners step away from their company, how a typical deal may be structured, and the importance of being emotionally prepared.

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“There’s a lot of information that comes out through LOI conversations and a deal tends to die two or three times during this process. It can be a very exhausting emotional aspect for the owner that they may not have prepared for.” – Malcolm Peace

Guest Profile

Malcolm Peace is president of Tsetserra Growth Partners (pronounced sit-Sarah), an investment firm in Texas that works with well-established businesses that have owners just about to retire who still want to see their businesses thrive. They identify profitable small businesses with revenues from $3.5 million to $12 million in stable industries, such as food & beverage, hospitality, manufacturing, logistics & distribution, and more. Malcolm and his team help rewrite the operating playbook of a company while maintaining the owner’s culture with a strong succession plan.

Malcolm has a B.S. in Psychology from James Madison University and an M.B.A. from the University of Virginia Darden School of Business.

Topics Covered

  • What does Tsetserra Growth Partners do? [3:03]
  • What makes a company interesting as a candidate for acquisition? [7:55] 
  • What adjustments can be made to a business to help lower-middle market companies grow? [9:02]
  • Are there challenges that exist for business owners who tend to work in the business rather than on the business? [14:11]
  • How can an investment firm create alignment between owners and employees? [20:16]
  • Is there a framework to help mitigate risk in an acquisition? [22:44]
  • What is the number one mistake that business owners make? [29:58]
  • How prepared are most business owners for due diligence? [32:03]
  • What is the purpose of reps and warranties from the buyer’s perspective? [37:09]
  • What criteria does Tsetserra Growth Partners look for when they are evaluating a business for possible acquisition? [40:35]
  • How subjective are the opinions of appraisers? [45:57]
  • What are the most important considerations when structuring a transaction? [47:25] 
  • How long does it take to close a deal? [52:05]
  • Why is it so hard to sell a business? [57:48]
  • What is a piece of advice for middle-market business owners? [1:05:07]
  • Tsetserra Growth Partners is hiring Operating Partners, and this is what qualifications they are looking for. [1:06:51]

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Resources Mentioned

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Acronyms or Terms Used in This Episode

  • OKRs: objectives and key results
  • 1031 Exchange: A way to postpone capital gains tax on selling a business or investment property by using the proceeds to buy a similar property.
  • Commitment Letter: A formal document from a lender stating that the buyer has been approved for a loan.

To suggest guests, topics, or questions for future podcast episodes, contact Morgan & Westfield

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Written by Jacob Orosz, President and Founder of Morgan & Westfield

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