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Best of LinkedIn: M&A Insights CW 23/ 24 · Best of LinkedIn: Strategy, M&A & Investments

• 0:00
  Speaker 0: Provided by Thomas Allgaier and Frennus, based on the most relevant posts on LinkedIn about M&A Insights from CW-Twenty Three in Twenty Four.
• 0:07
  Speaker 0: Frenness is a BDB market research company supporting M& A Consultancies with The Market & Competition perspective for example in commercial due diligence's CDD.
• 0:17
  Speaker 0: CDD engagements.
• 0:18
  Speaker 0: don't forgive slow starts!
• 0:20
  Speaker 0: Frennes embeds directly into your consulting team as white label market and competitive intelligence partner.
• 0:25
  Speaker 0: slide ready fully adapted to your client's design and operational within twenty-four hours.
• 0:30
  Speaker 0: You can find more info in the description.
• 0:32
  Speaker 1: Great, so with that out of way let's get into it for this deep dive.
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  Speaker 1: we are aiming our lens squarely at the top M&A trends that are you know dominating professional conversations across the industry right now.
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  Speaker 0: yeah specifically from calendar weeks twenty three and twenty four.
• 0:47
  Speaker 0: And mission here is pretty simple.
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  Speaker 0: honestly We're totally bypassing the fluff the superficial headlines looking directly what the smartest operators or deal makers talking about
• 0:55
  Speaker 1: Exactly.
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  Speaker 1: The real operational mechanics, the how and why behind strategy deal execution
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  Speaker 0: And to understand where the market is going, we kind of have to start by looking at how the traditional rules are just being flipped on their head.
• 1:16
  Speaker 1: Oh completely flipped?
• 1:17
  Speaker 1: Yeah.
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  Speaker 0: so let's jump into our first theme here which is Market Momentum and The Execution Reality Check.
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  Speaker 0: because for over a decade the absolute gold standard playbook was simple
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  Speaker 1: We're at the parallel process.
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  Speaker 0: Exactly you run a parallel process.
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  Speaker 0: You basically rely on a strategic acquirer To outbid private equity.
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  Speaker 0: I mean, you bank on that strategic premium because theoretically the corporate buyer can realize cost synergies that a financial sponsor just can't.
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  Speaker 1: But if look at data... That playbook is dead!
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  Speaker 1: Christophe Todder brought up this macro insight recently and it's a fascinating inversion.
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  Speaker 0: Yeah
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  Speaker 1: right now in U.S.
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  Speaker 1: mid-market private equity is paying twelve point eight times EV to EBITDA and strategics.
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  Speaker 1: They're trailing way behind at nine point nine times, so we are looking a massive three turn premium favoring financial sponsors.
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  Speaker 0: okay wait let me push back on this right out of the gate.
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  Speaker 0: yeah because lets unpack this math.
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  Speaker 1: sure
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  Speaker 0: if private equity is paying a three-turn premium over strategic does the strategic premium even exist anymore?
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  Speaker 0: Like PE isn't running a charity here.
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  Speaker 0: They have strict hurdle rates,
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  Speaker 1: right?
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  Speaker 1: They have to generate return.
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  Speaker 0: exactly.
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  Speaker 0: So where is that math actually coming from?
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  Speaker 0: as it just you know?
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  Speaker 0: record dry powder and aging portfolios That desperately need exits or our sellers Just taking on way more risk through earnouts and rollover equity To hit that headline number?
• 2:42
  Speaker 0: well
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  Speaker 1: the pressure to deploy capital Is definitely a massive driver.
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  Speaker 1: but you hit the nail on the head, The actual math is hiding in the deal structure.
• 2:50
  Speaker 0: Yeah I've figured.
• 2:51
  Speaker 1: I mean sellers.
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  Speaker 1: look at that twelve point eight X headline number and they pop the champagne but their absorbing substantially more risk to actually realize it.
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  Speaker 1: You know PE deals In this environment carry very aggressive earn out.
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  Speaker 1: Oh yeah
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  Speaker 0: Earnouts usually pay pennies On-the-dollar historically
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  Speaker 1: Exactly!
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  Speaker 1: Earn outs And massive rollover equity requirements.
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  Speaker 1: So when you factor into historical reality of how earnats perform That realized cash at close gap between PE and strategics narrows drastically.
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  Speaker 0: Wow, so chasing the absolute highest multiple whether it's from PE or a strategic is honestly just a trap?
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  Speaker 0: And this connects perfectly to what Anali has pointed out which is a brutal reality check.
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  Speaker 1: Oh her posts on failure rates.
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  Speaker 1: Yeah
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  Speaker 0: ninety percent of M&A deals fail anyway they feel because overpriced valuations cultural clashes missed synergies all
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  Speaker 1: Right.
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  Speaker 1: And yet the trap is set on day one of
• 4:12
  Speaker 0: at this totally unsupportable valuation.
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  Speaker 0: The buyer's bulk and the process
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  Speaker 0: dies.".
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  Speaker 1: Which means we really need to look what actually drives valuation when real money changes hands?
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  Speaker 1: It is not just about raw size of your EBITDA, both Lindsay M. Wendler & Roberto Ganzerli expanded on it brilliantly!
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  Speaker 1: They emphasized that premium valuations are fundamentally driven by two things – transferability.
• 4:40
  Speaker 0: Let's break those down because I think people hear transferability and assume it just means having a decent middle management team.
• 4:45
  Speaker 1: Oh, what goes way deeper than that?
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  Speaker 1: Transferability is about structural risk mitigation for the buyer like how much risk Is a buyer taking on if the owner leaves right If accompanies key client relationships or all their operational know-how are locked inside The founders head that business is incredibly fragile.
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  Speaker 1: Yeah
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  Speaker 0: You pull the founder out the whole thing Just collapses.
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  Speaker 0: yeah
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  Speaker 1: exactly.
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  Speaker 1: And regarding revenue quality It's about predictability and client diversification.
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  Speaker 1: What's fascinating here is that a business with average financials, but perfectly documented processes and low owner dependency will absolutely command a premium over.
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  Speaker 1: Dr.
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  Speaker 0: Mike DeFries points out, inorganic growth isn't just about buying certainty.
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  Speaker 0: it is an organizational capability that you have to build internally.
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  Speaker 0: yes You can't just hire one M&A person and expect magic happen.
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  Speaker 1: right if your organization lacks the internal plumbing.
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  Speaker 1: The brilliant sourcing doesn't matter.
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  Speaker 1: So let's pivot and look at our second theme how the acquirers who actually possess That capability are executing their playbooks Right now.
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  Speaker 1: strategic
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  Speaker 0: intent
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  Speaker 1: exactly buying occasions intense scale.
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  Speaker 1: Acos Petri did this brilliant breakdown of Coca-Cola's current M&A strategy and it totally reframes how you should look at target assets.
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  Speaker 1: Okay,
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  Speaker 0: lay that on me.
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  Speaker 0: Coca-cola
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  Speaker 1: isn't spending billions to buy drinks.
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  Speaker 1: they're buying drinking occasions.
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  Speaker 1: Oh
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  Speaker 0: wow!
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  Speaker 1: Yeah They buy Costa for the morning coffee routine...they buy body armor from The Gym occasion..They acquire Fairlife for premium dairy nutrition.
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  Speaker 0: Here's where it gets really interesting, actually.
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  Speaker 0: It's like a software company bundling apps to own your entire screen time.
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  Speaker 1: That is great analogy Right
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  Speaker 0: But Coca-Cola is trying to own every specific thirsty moment in you're twenty four hour day.
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  Speaker 0: They aren't just selling liquid they are monetizing the minute Exactly.
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  Speaker 1: And if we cross over into tech space Charlie Liu highlighted similarly brilliant strategy by Addian
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  Speaker 0: the fintech giant.
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  Speaker 1: Right, Adion recently spent a billion dollars acquiring Orb and Talon one.
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  Speaker 0: now on the surface if you just read the headlines it looks like a payments company buying what billing in loyalty tools
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  Speaker 1: yeah seems pretty basic but really Charlie points out they are buying the data that sits closest to actual commercial consumption and intent.
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  Speaker 0: ah I see think
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  Speaker 1: about it.
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  Speaker 1: A loyalty platform sees what promotions trigger to buy?
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  Speaker 1: Addin wants to own the why behind the transaction, not just money movement itself.
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  Speaker 1: Speaking of discipline let's talk about Medtronic.
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  Speaker 1: Gianmarco Pacifico and Alex Prudenkov outlined Medtronics highly targeted twenty-twenty six playbook And it is aggressive but so controlled.
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  Speaker 0: Right, they are completely avoiding those massive fourteen billion dollar mega mergers that their competitors are doing.
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  Speaker 1: Exactly!
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  Speaker 1: They're capping deals at one point five billion Doing these strategic tuck-ins like CathWorks and Sanse Vascular.
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  Speaker 1: And what
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  Speaker 0: really stands out there is Medtronix.
• 7:48
  Speaker 0: Try Before You Buy model.
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  Speaker 0: I mean...they'll invest in a company watch the hospital adoption of technology for four years and only acquire it once commercial viability
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  Speaker 1: completely proven.
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  Speaker 1: They let the market do the diligence for them,
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  Speaker 0: it's brilliant.
• 8:01
  Speaker 0: but executing these highly targeted data-driven acquisitions requires a totally new operational infrastructure which leads us directly into our third theme
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  Speaker 1: AI led dealmaking and institutional learning.
• 8:13
  Speaker 0: exactly because how AI is rewiring The M&A process itself Is just wild right now.
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  Speaker 0: Rui Silva in Benjamin Steer brought this up.
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  Speaker 0: AI & M& A is no longer Just a productivity hack
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  Speaker 1: Right, it's not just a chatbot summarizing a data room anymore.
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  Speaker 0: Now we are entering the era of egentic AI networks of AI agents that can actively plan execute and adapt across the entire life cycle of a deal.
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  Speaker 0: And
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  Speaker 1: Daniel Friedman pointed out why this changes everything, traditionally M&A is treated as a bunch of isolated transactions right?
• 8:45
  Speaker 0: You close a deal in all that institutional knowledge just vanishes
• 8:49
  Speaker 1: Exactly!
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  Speaker 1: The bankers leave...the VP takes a new job..the lessons are lost.
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  Speaker 1: but AI is turning m&a into a compounding institutional learning system.
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  Speaker 1: it remembers every single data point from past deals to inform the next one.
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  Speaker 0: Okay, so what does this all mean in practice?
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  Speaker 0: Because if AI is analyzing all of these data aren't we still relying on humans that actually move the data between systems like a copy-paste problem?
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  Speaker 0: That
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  Speaker 1: has totally been the bottleneck but Hannah Jarrett from Dealeroom shared a massive update on it.
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  Speaker 1: The industry's actively solving that copy paste handoff problems.
• 9:24
  Speaker 0: Oh really?
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  Speaker 1: Yeah New tools are connecting AI directly into the deal dataroom.
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  Speaker 1: So the AI reads documents writes analysis and creates records in real time.
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  Speaker 1: It completely bypasses the manual
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  Speaker 1: overhead.".
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  Speaker 0: Wow, so this software just lives inside of the data room natively?
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  Speaker 1: Exactly!
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  Speaker 1: And Sacha Vandermeerish noted that tools like Synergy AI are now merging both buy-side AND sell side mandates into single workspaces...
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  Speaker 0: Unifying whole
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  Speaker 0: stack?!
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  Speaker 1: Right you don't need disjointed tech anymore….
• 9:52
  Speaker 0: That's incredible.
• 9:54
  Speaker 0: but while AI can perfectly map out a deal on the Data Room The actual physical integration remains the graveyard where value goes to die
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  Speaker 1: The messy human element.
• 10:03
  Speaker 0: Exactly, which brings us to our fourth theme Carvouts integration and the storm ahead.
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  Speaker 0: Nadine Leitner and Irmer F. Goeven delivered a very serious reality check on carve outs.
• 10:15
  Speaker 0: Well
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  Speaker 1: car routes are so deceptive.
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  Speaker 1: On paper it's just an asset transfer
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  Speaker 0: right?
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  Speaker 0: Just move this spreadsheet over
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  Speaker 1: but in reality It is the complete rewiring of a business.
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  Speaker 1: you were untangling shared IT Shared finance HR just to build a standalone entity.
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  Speaker 0: Yeah, and Kai Heslman had a great quote about this.
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  Speaker 0: He calls IT carveouts heart transplants for companies.
• 10:35
  Speaker 1: that is so accurate
• 10:36
  Speaker 0: especially those complex SAP separations.
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  Speaker 0: you have to keep these massive enterprise systems running twenty four seven during the surgery.
• 10:44
  Speaker 0: You can't just pause the business.
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  Speaker 1: And while the it team is doing the heart transplant The leadership is usually messing up the human integration.
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  Speaker 1: Honey Justin Crerop warns against using the classic burning platform tactic.
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  Speaker 0: Oh fear-based urgency.
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  Speaker 0: Exactly,
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  Speaker 1: manufacturing a crisis to force integration.
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  Speaker 1: she points out that it creates compliance sure but not the actual commitment needed from the team.
• 11:08
  Speaker 0: yeah you get people nodding in meetings but silently looking for other jobs.
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  Speaker 1: right and as ernevin sen points out leadership is usually totally blinded.
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  Speaker 1: this because post merger employee surveys usually fail.
• 11:18
  Speaker 0: why do they fail?
• 11:19
  Speaker 1: because they asked the wrong questions at the wrong time.
• 11:22
  Speaker 1: They end up delivering these sanitized, feel-good data dashboards to executives while all of their key talent is quietly
• 11:29
  Speaker 1: leaving.".
• 11:29
  Speaker 0: Wow!
• 11:30
  Speaker 0: And if we connect this with a bigger picture... The stakes right now are huge.
• 11:34
  Speaker 0: Existential
• 11:35
  Speaker 1: really?
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  Speaker 0: Yeah… Because Chris Krish warns that a distressed M&A wave is absolutely locked in for twenty-twenty seven.
• 11:41
  Speaker 0: This
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  Speaker 1: is the storm ahead.
• 11:42
  Speaker 0: Talked me about Twenty-Twenty Seven.
• 11:43
  Speaker 0: What's locking it into?
• 11:45
  Speaker 1: It's credit market.
• 11:46
  Speaker 1: Credit is tightening and all those overleveraged deals from twenty-twenty one, you know the ones struck at eleven XE but with covenant light terms They are hitting a maturity wall.
• 11:57
  Speaker 0: Oh man so the lifelines are running out exactly.
• 12:00
  Speaker 1: Lenders want real cash flow now not theoretical synergies.
• 12:04
  Speaker 0: So the businesses that didn't integrate properly?
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  Speaker 0: The ones it didn't build real value they're gonna be forced into the hands of disciplined buyers very soon The ones with actual dry powder and integration muscle.
• 12:16
  Speaker 1: It's going to be a bloodbath for the undisciplined, but massive opportunity for prepared.
• 12:21
  Speaker 0: Incredible!
• 12:22
  Speaker 0: Well that covers our key themes today.
• 12:24
  Speaker 0: if you enjoyed this episode new episodes drop every two weeks.
• 12:27
  Speaker 0: also check out other additions on private equity venture capital in strategy consulting.
• 12:32
  Speaker 0: thank you so much joining us.
• 12:34
  Speaker 0: make sure subscribe.
• 12:36
  Speaker 1: Yeah, thanks for tuning in.
• 12:37
  Speaker 1: And I want to leave you with a final provocative thought that builds on what we just discussed.
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  Speaker 1: as Ask yourself, is your organization currently holding onto an aging non-core asset out of purely emotional loyalty?
• 12:53
  Speaker 1: Because as Jan Steinbetcher noted portfolio cleanup isn't a retreat.
• 12:56
  Speaker 1: If the market is about to flood with twenty twenty one's over leveraged mistakes The companies that will win are the ones divesting heavy baggage today.
• 13:03
  Speaker 1: so they have capital and agility strike tomorrow.
• 13:05
  Speaker 1: Are you ready for fire sale?