The best corporate development hire to boost exit value

Corporate development leaders drive growth in private equity portfolio companies by sourcing and closing transformative acquisitions.

Most portfolio companies keep corporate development talent in place throughout the hold period. But some strategically hire senior M&A leaders when an exit is 12-18 months away to boost deal flow, hit acquisition targets and drive a higher exit value.

In this article, we explain what these hires look like, how they accomplish pre-exit goals and what their careers look like after participating in a successful sale.

When to bring in senior M&A talent

We put corporate development leaders in four categories: managers (3-4 years of experience), rising stars (6-10 years of experience), proven commodities (10-15 years of experience) and transformative chief development officers (15+ years of experience).

If your private equity-backed business is 12-18 months away from a sale, you should hire a proven commodity with 10-15+ years of experience split between investment banking and corporate development, and who has a proven track record of leading both the deal-sourcing process and a corporate development team.

The “proven commodity” profile

This type of candidate will help maximize your business’ value quickly, because they have experience preparing for multiple successful deals and can handle sourcing without involving a broker or relying on referrals.

Closing multiple deals in one or two years requires deep acquisition experience and the versatility to “wear many hats.”

A proven commodity can join the business, source an organic pipeline of compelling deals and be the person taking founders out to dinner, evaluating financials and vetting cultural cohesion. They should embody the hunter mindset, where they are senior enough to own the process but not so senior that they require a large team.

Life after the exit

For organizations that upped deal flow toward the end of a hold period, experienced a successful exit and maximized return on investment for private equity stakeholders, the next question is what happens to the corporate development function?

A successful exit is the goal, and it comes with a healthy payout, but it can still be jarring for team members to suddenly lose their job.

For corporate development leaders, this is another notch in their deal-making belt, and they’re prepared to lose their job during an exit. Extremely talented corporate development leaders may stay employed by the acquirer after the deal is done, but this is rare.

In most cases, they will have done their jobs and begin looking for new roles where they can recreate the same outcome. Lucky for them, that level of talent doesn’t stay on the market long.

Key takeaway

In the final months before a private equity exit, the right corporate development leader can elevate valuation and accelerate deal flow.

These “proven commodities” bring a hunter mentality, executing multiple deals efficiently without brokers, and often serving as both strategic leaders and tactical operators. After a successful exit, these individuals rarely remain with the acquiring firm, instead quickly moving on to their next challenge.

To learn more, contact Rebecca Conway at (336) 217-9139 or rebecca.conway@charlesaris.com.