The Winning LOI [Vol. 2, Issue 6, No. 9]

Welcome to Issue #9 of The Winning LOI, the Axial newsletter that anonymously unpacks the small business M&A valuation data and key deal terms associated with winning LOIs.

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In this issue, we look at an Eastern U.S. add-on transaction in the Behavioral Health M&A category. Acquired by a strategic buyer, the business generated $2.2M in 2020 revenue and ~$560K of adjusted EBITDA. The deal went to market in Q4 of 2021. The strategic buyer pursued the deal within 24 hours, took the deal under exclusivity 48 days later, and closed the deal 134 days after the LOI was signed. 

The provider’s patient mix was largely pediatric and adolescent with the most common disorders being depression, anxiety, conduct, and ADHD.

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See below for the anonymized fully-tabulated Winning LOI data set ⬇️

Definitions: 

*Buyside Recommendation: Axial sell-side members receive a matching set of buyside members for every deal they manage via Axial. A buyside recommendation refers to a specific buyside Axial member who matches a particular deal.

*Recipient: A recipient is a buyside member who has been granted access by an Axial sell-side member to review a particular deal.

*Pursuit: Axial buyside members express initial interest in a deal by clicking “Pursue”, after which they can access and sign the NDA.

*Axial Closer: An “Axial Closer” is defined as any buyside or sell-side member firm who has a verified closed deal that was both marketed and sourced via Axial.

*Deal Pursuit Rate: The deal “Pursuit Rate” is defined as the number of times a particular deal is pursued by unique buyside members (i.e. the buyer shows explicit interest in exploring the deal) divided by the total number of buy-side firms invited to evaluate the deal

*Buyside Pursuit Rate: The buy-side “Pursuit Rate” is defined as the number of deals pursued by a particular buyer throughout an entire Axial membership term, divided by the total number of deals sourced during the same timeframe.

Disclosures: All data presented in The Winning LOI is anonymized to respect and protect the confidentiality of Axial members and their transactions. Data is provided to Axial by Axial members in accordance with the Axial Member Terms of Service. Axial has endeavored to present data accurately, but Axial does not and cannot fully verify the accuracy of the presented information. Information contained in The Winning LOI is for informational purposes only, and does not represent investment advice or recommendations of any kind.