Questions answered
- Which criteria should I set?
- How should exclusions be defined?
- How should the thesis drive screening?
Why the thesis comes before search
Without a thesis, buyers compare incomparable companies and rewrite criteria around each new opportunity. The thesis is a discipline contract with yourself: what you want, why, with which resources, and what should be rejected.
1. Strategic objective
Choose the primary mechanism: owner-operator acquisition, strategic integration, sector consolidation, capability/technology acquisition, cash-flow diversification or investment with existing management.
2. Geography
Do not choose only a country. Define travel radius, language, law, currency, banking access, logistics, remote-management capacity and local-management requirement.
3. Sectors
Separate sectors you understand, adjacent sectors and excluded sectors. Write why. Emotional familiarity is not operating competence.
4. Size and economics
Use ranges: revenue/EBITDA/cash flow, purchase price, equity ticket, CAPEX, working capital and debt capacity. Do not use one generic multiple as a universal filter.
5. Management
What must remain after close? Existing CEO, autonomous team, technical leaders, second line? The answer depends on the buyer's own operating capability.
6. Commercial quality
Define acceptable customer concentration, recurrence, backlog visibility, regulatory exposure, competition, channel dependency, margins and pricing power.
7. Transformation load
How many changes can you truly finance and lead at once: pricing, sales, digital, CAPEX, management, export, governance? A target requiring six simultaneous transformations may be too complex even at an attractive price.
8. Prohibited red flags
Write the conditions that cause rejection or escalation in advance: fraud, unclear title, uncertain critical licence, excessive customer dependency, unquantified litigation, hidden debt, founder dependency without transition, and so on.
One-Page Acquisition Thesis
| Block | Your decision |
|---|---|
| Objective | |
| Countries / corridors | |
| Sectors | |
| Size / economics | |
| Equity ticket | |
| Required management | |
| Acceptable transformation | |
| Prohibited red flags | |
| Horizon / role |
Screening rule
Every target should be rejected, investigated or progressed against the written thesis, not current enthusiasm. Rejection reasons are useful data: they improve the thesis over time.
DealPME
The thesis can feed search and matching criteria. It must not become an opaque compliance/admission score. Matching can explain compatibility; the buyer owns the decision.
<!-- ENHANCEMENT_V2 -->
Prioritise criteria
Classify each criterion as MUST_HAVE, PREFERENCE, INVESTIGATE or EXCLUDE. Without hierarchy, a minor preference can become a deal-breaker while a major risk is accepted because the target feels attractive.
Calibrate the thesis against the market
The thesis can evolve, but every change should be explained. If repeated targets fail on the same condition, ask whether the criterion is too strict, the market assumption was wrong, or the corridor/sector should change. Update on evidence, not to justify the current opportunity.
Connect the thesis to financing
A thesis without a funding envelope is incomplete. For the target profile, define mobilisable equity, debt that still needs testing, post-close reserve and transformation CAPEX. This prevents searching systematically outside capacity.
Mini-FAQ
Must I choose one sector? Not necessarily, but each sector needs a competence logic and comparable screening criteria.
Can I change the thesis after seeing an attractive target? Yes, if the change is documented as a genuine strategy change rather than an opportunistic exception.
This resource explains; it is neither legal, tax or financial advice nor a formal valuation. Have your situation validated by a professional.