How to Prepare a Business for Private Equity Acquisition

Philip Soar, Executive Chairman and CEO of CloserStill Group PLC

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Are you familiar with the trade show industry? It’s very underappreciated but is gaining a lot of traction now with PE firms. In this week's episode of the podcast, learn how to prepare your company for a private equity acquisition with Philip Soar, Executive Chairman, and CEO of CloserStill Group PLC.

What makes trade shows attractive?

According to Philip, trade shows have become a very attractive investment for private equity firms mainly because;

1. If you have a well-run business, business margins are very high. It can range up to 27% to 30% yearly.
2. Payments are cash upfront because exhibitors pay you in advance, and you only pay the cost of running the exhibition when it happens.
3. An excellent solid tradeshow will most likely have recurring exhibitors. You will be able to rebook exhibitors for the next event.
4. There are high barriers of entry. Exhibitors get protection from competitors because once you have a good relationship with a particular company in a specific industry, then other competitors will be not allowed to participate in that trade show.

Preparing for an acquisition

PE firms love a good spreadsheet, which makes KPIs extremely important. This is why Philip has an enormous amount of spreadsheets full of KPIs. Trade shows are measured on average revenue per square meter, so it is crucial to have at least ten years of history in your record if possible.

What to look for in a PE firm

When it comes to selling companies, Philip always uses bankers to create a competitive process. He doesn’t approach PE firms. However, even with all the bidders, price isn’t the only thing important to them.

Philip has rarely seen a deal where the PE firm walks away and leaves you alone. It’s usually a buy and build acquisition, and it is critical to be working with people you trust and like. It also helps if the PE firm has experience in your sector.