Acquisition Thesis
A strategic framework defining what types of businesses to acquire, including industry focus, size criteria, and value creation plan.
An acquisition thesis is a strategic framework that defines the types of businesses a buyer seeks to acquire and how they plan to create value post-acquisition.
Thesis Components
Industry Focus:
- Target sectors and sub-sectors
- Industry dynamics and trends
- Competitive landscape
- Regulatory environment
Company Criteria:
- Revenue/EBITDA range
- Geographic scope
- Business model type
- Customer profile
Value Creation Plan:
- Operational improvements
- Growth initiatives
- Technology enablement
- M&A strategy (bolt-ons)
Example Acquisition Thesis
Target: B2B service businesses
Industry: HVAC, plumbing, electrical
Geography: Southeast US
Size: $1-3M EBITDA
Characteristics:
- Recurring revenue (service contracts)
- Fragmented competition
- Owner-operated (succession opportunity)
Value Creation:
- Professionalize operations
- Implement CRM/scheduling software
- Add-on acquisitions
- Geographic expansion
Why Thesis Matters
For Searchers:
- Focuses deal sourcing efforts
- Builds industry expertise
- Improves evaluation speed
- Signals credibility to sellers
For Investors:
- Demonstrates strategic thinking
- Enables expertise development
- Provides accountability framework
- Guides resource allocation
Related Terms
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