The Winning LOI [Vol. 4, Issue 17, No. 69]

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.

In today’s issue, we review the LOI for a company that provides document management and automation solutions. The business delivers proprietary technology, recurring service offerings, and retention-driven customer support to a broad base of industries.

The business reported a revenue range of $15M–$18M and an EBITDA range of $1M–$2M when the deal confidentially went to market via Axial in Q4 2024. The deal was in market for 127 days before the winning LOI was executed, with a family office successfully closing 95 days later.

The LOI was structured utilizing a combination of cash, rollover equity, seller financing, and a performance-based earnout. The one-year earnout is contingent on the business achieving or exceeding a pre-determined recurring gross profit threshold. If the full earnout is realized, the resulting EBITDA multiple for the transaction will range between 10.5x–11x.

See below for Winning LOI #69’s anonymized data ⬇️

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, also known as a “buyer match.”

*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 buyside firms invited to evaluate the deal

*Buyside Pursuit Rate: The buyside “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.

Axial is the trusted deal platform serving the lower middle market ($2.5-$250M TEV).

Over 3,500 advisory firms and 3,000 corporate and financial buyers have joined Axial to efficiently connect with relevant capital partners, source actionable deals, and build new relationships.

Visit the Member Closed Deals page to see selected transactions that have been sourced and closed via Axial.

Learn More      Become a Member