Exit Planning · M&A
April 14, 2026
What a recent Wall Street Journal story about a PE firm’s acquisition hunt reveals about the deals your business could be part of.
A story recently crossed my desk that I couldn’t stop thinking about. A large private equity firm — one that manages billions — publicly announced they are actively hunting for companies to buy in the U.S., Canada, and the U.K. Specifically, well-run, founder-owned businesses in a niche they’re trying to expand into.
That’s unusual. PE firms don’t typically announce their shopping lists. When they do, it’s worth paying attention — because that announcement tells you exactly how these deals are built, and who’s on the other side of the table when they come for you.
01
You’re not their first deal. You’ll be their next one.
Here’s how this particular deal is structured: the PE firm paid roughly $500 million for a large company overseas — their anchor investment, what the industry calls a “platform.” Now they need to bolt smaller regional businesses onto it to make the original investment pay off.
Those smaller acquisitions? That’s where founder-owned businesses come in. Good operators, loyal customers, strong local reputation — but without the resources of a PE-backed company. The sellers doing these deals have usually done one transaction in their life. The buyers have done hundreds.
The gap in experience is real. That doesn’t mean you can’t negotiate well — it means you have to prepare like the stakes are high, because they are.
02
“We love your team” is also due diligence.
The executive leading this expansion said they evaluate acquisitions based on “the quality of the team that could execute.” Sounds like a compliment. It is — but it’s also an assessment.
PE buyers need to know: will the founder stay? Will the key people stick around? Will the business actually perform post-close? That evaluation shapes everything from the offer price to how earn-outs and retention agreements get written into the deal. Sellers who walk in thinking they’re just cashing out are often surprised when the terms reflect that they’re also expected to keep working.
Know this before you sit down: you’re being evaluated as a future operator, not just as an owner selling an asset.
03
The buyer already has a number. They just haven’t shown you.
One detail in the story stood out: this firm is openly considering whether to expand by acquiring a business — or just hiring a team and building from scratch. If building is cheaper, they’ll do that. If buying gets them there faster because of your customers, your reputation, or your local market relationships, they’ll pay for it.
Every offer they make is benchmarked against that internal math. They won’t share it with you. But knowing it exists — and that your value is measured against a build-or-buy calculation — changes how you think about the negotiation.
04
Being the only game in town is leverage. Use it.
When a PE firm moves into a new geography, an established local operator has something they genuinely can’t manufacture overnight: existing customers, community trust, and the relationships that took years to build. That’s real leverage.
The problem is most sellers don’t recognize it as leverage — so they don’t use it. Walking into a deal thinking “they’re doing me a favor by buying me” is the most expensive mistake a seller can make.
The right frame: they need what you’ve built. Your job is to make sure the price reflects that.
If you’re a business owner thinking about what comes next — whether that’s five years or five months from now — this is the kind of buyer landscape worth understanding well before a conversation starts. Preparation isn’t paperwork. It’s negotiating power.
Thank you for reading this blog. If you have any questions, insights, or if you’d like to engage in a more detailed discussion on this matter, I invite you to reach out directly.
Feel free to send me an email. I value thoughtful discussions and am always open to connecting with business owners, management, as well as professionals who share an interest in the complexities of M&A law in lower middle market private target deals.
By John McCauley: I write about recent problems of buyers and sellers in lower middle market private target deals.
Email: jmccauley@mk-law.com
Profile: http://www.martindale.com/John-B-McCauley/176725-lawyer.htm
Telephone: 714 273-6291
Check out my books: Buying Established Business Assets: A Guide for Owners, https://www.amazon.com/dp/B09TJQ5CL5
and Advisors and Selling Established Business Assets: A Guide for Owners and Advisors, https://www.amazon.com/dp/B0BPTLZNRM
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