In today’s newsletter I am going to go over the following…

• Actionable tips for proprietary deal sourcing

• Dealmakers’ $35B Merger Monday

• Three deals: Custom Components Manufacturer, Indoor Kids Playground, Children's Clothing eCommerce

…and more.

We help SMB investors build up their own databases or proprietary deals. If you’d like to learn how, see here.

Access our open guide to cold email for LMM investors here.

Actionable Tip

Build a Detailed "Pre-LOI" Database:

Keep thorough notes on every owner conversation you have, even those that don't immediately lead to a deal.

Track key details including:

• timeline to exit

• family situation

• growth plans

• pain points

Set follow-up reminders based on their projected timeline. This allows you to stay engaged and be ready when they're prepared to sell. Maintaining this organized database and proactively following up can transform initial pass-overs into future proprietary deals.

Merger Monday

“Dealmakers got their first real taste of a post-US election M&A bump on Monday, with roughly $35 billion worth of transactions.” The largest announcements came in the US, led by Quikrete's $11.5 billion acquisition of Summit Materials and UniCredit’s $10.5 billion bid for Banco BPM. These high-profile deals signal that the M&A market is roaring back, heading toward an estimated $3 trillion in global deals for 2024—a strong rebound from 2023's $2.4 trillion.

The optimism isn’t confined to just a few sectors. Activity is broad-based, with major moves like Amcor acquiring Berry Global and Charter Communications buying Liberty Broadband. Banks are lending again, and improved interest rates are unlocking financing options that were scarce in 2022-23. This rebound is energizing both private equity firms and strategic buyers, who are once again pursuing major transactions.

For lower-middle-market investors, this moment is golden. The resurgence of large-scale deals often creates spin-off opportunities as big companies shed divisions, opening doors for smaller buyers. Deal flow is robust, exit opportunities are expanding, and while prices may inch up from 2023 lows, they remain far from the overheated highs of 2021.

The current environment rewards investors who excel at operational improvements and maintain flexibility in deal structuring. Those poised to execute buy-and-build strategies are particularly well-positioned to capitalize on the ripple effects of this M&A renaissance, driven by renewed economic confidence and policy stability.

Deal List

1) Custom Components Manufacturer

• Revenue: Not disclosed

• EBITDA: $1,339,000

• Asking Price: $8,500,000

• Overview: A custom components manufacturer with 99% customer retention and $1.3M in Seller's Discretionary Earnings (SDE).

• My Thoughts: This is a classic "boring but beautiful" business - they make parts that customers can't easily switch away from, proven by their incredible 99% retention rate. The asking price of 6.5x earnings feels cheap for a business with such loyal customers, especially since these relationships tend to get stronger over time. The fact they can handle both small local jobs and big global orders suggests they've built something that could grow much bigger than their current Illinois operation, but without the typical scaling headaches that plague most manufacturing businesses.

• Link To Listing

2) Indoor Kids Playground

• Revenue: $1.55M

• EBITDA: $350K

• Asking Price: $1,200,000

• Overview: Designed for children ages 1-11, Off The Wall Kidz is made up of an expansive two story play structure, interactive games, dedicated toddler area, pretend city style buildings, miniature bowling, age appropriate arcade games and more.

• My Thoughts: This indoor playground business presents a compelling opportunity with strong financials and a proven model operating across two locations (MA and NH). The business hosts over 1,000 birthday parties annually and offers multiple revenue streams in an underserved market with limited competition. What makes this particularly attractive is the turnkey systematized operation, potential for absentee ownership, and established brand reputation since 2018 in a region where indoor entertainment is highly valued due to weather conditions.

• Link to Listing

3) 8 Y/O Children's Clothing eCommerce (Romania)

• Revenue: $1.3M

• EBITDA: $391,400

• Asking Price: $109,000

• Overview: A children's clothing eCommerce business generating $391K in annual profit exclusively from the Romanian market, with established digital marketing channels and operational team in place, offering strong potential for EU market expansion.

• My Thoughts: The diverse traffic sources, established team handling operations, and complete digital marketing ecosystem (including newsletter) demonstrate a mature, systematized operation. The concentrated market focus in Romania represents a significant growth opportunity for geographic expansion into neighboring EU markets, while current operations provide stable cash flow to fund such expansion.

• Link to Listing

How I Can Help You

If you invest in SMBs and want my team to set up your proprietary deal sourcing strategy including:

• Scraping and enriching lists of your ideal company targets

• Creating a deal database

• Setting up a cold email infrastructure

• Writing and managing all outreach including your cold email, LinkedIn, and cold calling

Learn more here

Book a call here