The Winning LOI [Vol. 4, Issue 21, No. 73]

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.

In today’s issue, we review the LOI for a company that provides commercial, industrial, and high-rise painting and coating services, along with ongoing maintenance, waterproofing, and specialty protective finishes for large buildings and facilities. When the deal confidentially went to market via Axial in Q1 2024, the business reported a revenue range of $12M–$15M and an EBITDA range of $2M–$3M.

The LOI was structured using a combination of cash, rollover equity, and seller financing. The seller note carries 5% annual interest, has a 5-year term from closing, and pays interest quarterly. It is subordinated to all existing and future debt of the buyer and the business and is secured by the company’s assets and equity.

See below for Winning LOI #73’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.

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