Private Equity Business | My First Million Podcast | 03/31/2020

Business Attributes

Permanent Equity, led by Brent Beshore, seeks businesses with durability and a strong market position. They focus on companies that are too big to be small but too small to be big, often lacking the systems to grow further 1. Brent emphasizes the importance of a leadership team that can be partnered with, ensuring the business has a unique market position 1.

We want them to have something unusual about them that we can really build on and help them grow.

--- Brent Beshore

Their portfolio includes diverse ventures like a swimming pool business and a military recruitment firm, highlighting their preference for long-term investments without the intention to sell 2 3.

   

Leadership Continuity

Maintaining leadership continuity post-acquisition is crucial for Permanent Equity. Brent explains that while the ownership and leadership teams may differ, keeping the leadership intact is often beneficial 4. They aim to avoid founder dependency by ensuring businesses have repeatable processes and a healthy layer of non-owner management 5.

We want to see a healthy layer of non-owner management. We always call it hit by a bus risk.

--- Brent Beshore

Their acquisition philosophy involves a collaborative approach, integrating their team with the existing leadership to support growth without destabilizing the company 6.

   

Valuation Approach

Valuation at Permanent Equity involves understanding EBITDA and owner earnings, with typical multiples ranging from 3.5 to 5.5 times 7. Brent highlights their unique approach of avoiding debt in transactions, opting for cash deals to maintain company robustness 8.

Debt is one way to take a good company, make it a fragile company.

--- Brent Beshore

This strategy allows them to keep businesses stable and resilient, especially during unforeseen events like a pandemic 8.