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The Winning LOI [Vol. 3, Issue 4, No. 31]

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Welcome to the latest issue of The Winning LOI, the Axial newsletter that anonymously reveals small business M&A valuation data and certain key deal terms associated with winning LOIs.

To subscribe to The Winning LOI, please enter your email below.


This issue features a Construction deal within the Industrials sector. The company reported a revenue range of $5.5M – $6M and an EBITDA range of $1.75M – $2M when the deal confidentially went to market via Axial in Q3 2023. The deal did not go on to close, with the seller electing not to sell the company during the exclusivity period.

For additional context and data around 2023 dead deals and broken LOIs, take a look at this recent Axial report.

We reviewed the M&A activity for Construction deals on the Axial platform over the past 12 months. Here’s the breakdown:

Looking to exit in Construction? Find an advisor you can trust.

See below for Winning LOI #31’s anonymized data ⬇️


The Deal
Deal TypeChange of Control
Revenue Range (TTM)$5.5M - $6M
EBITDA Range (TTM)$1.75M - $2M
EBITDA Margin Range33% - 35%
Key IndustriesIndustrials
In-Market DateQ3 2023

Axial Deal Data
Recommendations*497
Recipients*497
# of Pursuits*67
Deal Pursuit Rate*13.48%
Winning LOI Pursuit to LOI Executed33 Days
Winning LOI Executed to Deal Closedn/a

The LOI
Total Enterprise Value (TEV) Range$10.5M - $11M
EBITDA Multiple Range (TTM) 5.25x - 5.5x
Exclusivity100 Days
Structure
➡️ Cash90% of TEV
➡️ Seller Note10% of TEV
➡️ Earnout

Axial Sell-Side Member Data
Member TypeM&A Advisory Firm
Total Deals Marketed on Axial8
Average Annual Deals Marketed4
Average Revenue of Deals$7,277,245
Average EBITDA of Deals$1,919,085

Axial Buyside Member Data
Member TypePrivate Equity
Number of Acquisitions10
Buyside Pursuit Rate*14.38%
Buyer Responsiveness Rate*61.98%


Definitions: 

*Recommendations: 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.

*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.

*Buyside Responsiveness Rate: The buyside “Responsiveness Rate” is defined as the rate at which a member responds to teaser shares within 5 days. The calculation initiates when a member has a minimum of 10 teasers and is calculated based on the member’s last 100 teasers received.


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.

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