Will Thorndike's Six-Point Playbook to Mastering Business Acquisitions


Table of Contents

The KING of search funds:

Will Thorndike

He has invested in 100s of business acquisitions.

His 6-point playbook for the best returns:

1. Ideal Business for Acquisition:

- Recurring revenue (60-80%)

- Low churn (<20% annually)

- Growing market 7+%

- Low capital intensity (ROTC 20+%)

2. Most Successful Business Models:

Often niche service (or software) businesses providing an essential service to a growing end market.

Ex: Asurian - roadside assistance company. Basically captive AAA.

One of the most successful search funds ever. Multi-billion $ company now.

3. Successful Searcher Qualities:

Time Management  - "know what messes to step around"

Coachable - willing to listen to mentors and board members

Customer Centric - spends time with customers

4. Get Rid of The Seller:

Any seller involvement is problematic post-close.

A searcher must define an owner's post-close role very clearly. This helps drive changes in the business and culture.

5. Board of Directors:

Hard to overstate their importance.

Mix of operators with experience in similar business models and investors.

A board member's compensation is their investment and a nominal fee.

Max 5 people.

6. Prediction for the Future:

More permanent capital models will emerge.

PE hates having to sell their best companies for fund-life reasons.

Owners like selling to long-term capital with no intention of selling again.