Navigating the wild financial world of private equity transactions can feel overwhelming. Nestled between venture capitalism and savvy investing, private equity firms work hard to make determined acquisitions based on due diligence, hoping to recoup their costs and make massive financial windfalls along the way.
Mark Hauser, founder and co-managing partner at Hauser Private Equity, has long been one of the foremost thought leaders in the industry. Taking time out of his day, Hauser settled in with CEOWORLD Magazine to discuss what it takes to find success with private equity transactions.
Diverse Investment Industry
When discussing private equity transactions, Hauser underscores the fact that the divestment industry can encompass several different investment objectives and entities. Nearly half of all private equity investment deals are worth more than $50 million. Private investment firms like Hauser Private Equity target companies with a growth-focused business that has a successful business model but needs strategic management to excel.
Private equity firms are uniquely focused on earning a return through each investment, ensuring that their target company can deliver on its goal. Using their reputation, an investment bank, or their networking, equity firms like Hauser Private Equity can find targets to fulfill their needs.
Thorough Analysis Leads to Success
Mark Hauser has operated as a private equity investor for multiple decades, dating back to his entrance into the industry through Reynolds, DeWitt & Co. Now a decorated equity investor, Hauser advocates that those who would follow in his footsteps do the most to perform their due diligence.
Hauser advocates for successfully exploring commercial due diligence to understand the target company and its market position. Financial due diligence will further confirm the accuracy of the financial information presented. Legal due diligence ensures that there are no outlying liability issues that need to be addressed, including under-process lawsuits.
Making the Right Purchase
Once an investment firm like Hauser Private Equity has conducted its due diligence, it is time for the firm to make a decision. With zero red flags present, the investment team will eventually present a deal to the committee. Once this deal has been approved, both parties will find lawyers to negotiate the final terms.
Upon completion of a deal, the goal of the acquired business is to join in with the portfolio of the private equity firm. From there, the firm will work effectively and efficiently to improve company operations, hoping to leverage further profits before selling the business as a whole.
Wrapping up the perfect purchase, a private equity investment firm will make a timely exit to ensure that they leave at the moment of maximum profit.