Private Equity Firms Buying Companies With $15M or More of EBITDA

Companies with $15 million or more of EBITDA are in the middle market, where the largest private equity funds, their portfolio companies and strategic acquirers all compete. At this size a business may be a platform for a large fund, a major add-on for an existing platform, or a company that changes hands from one private equity owner to another.

Buyers at this level look for professional management across every function, audited financials, strong systems and a clear plan for growth, often including acquisitions. They will run detailed diligence on customers, operations, technology, legal matters and the management team, usually with outside advisors in each area.

Processes are usually run by investment banks and can move quickly once they start. Deals commonly include significant financing, rolled equity for management and founders, and detailed purchase agreements covering working capital, escrow and representations. Owners who know what they want from the purchase agreement before the first meeting negotiate from a stronger position.

Many founders at this size are deciding between selling outright and bringing in a partner for a recapitalization that lets them take money off the table while keeping a stake. The firms below differ a great deal in hold period, sector focus and how involved they get, so it pays to compare them carefully.

The firms below also differ in how they work with founders who stay. Some prefer founders to remain as chief executive for several years; others bring in their own leadership soon after closing. Asking for references from founders of past portfolio companies is one of the best ways to learn what a partnership with a particular firm is really like, and timing matters too: credit conditions affect how much a buyer can borrow and therefore what it can pay.

Greymont is paid by buyers, never by owners. We can help you think through which of these firms fits the next stage of your company.