Industries
Businesses in these sectors are not valued on generalist terms. Value sits in places a generalist process does not examine, and risk in places a generalist adviser does not clear before a buyer identifies them.
Set out below, for each sector we cover: what it comprises, what determines valuation, and what diligence reliably surfaces.
Our deepest coverage, spanning five sub-sectors that share a buyer universe but are valued on quite different terms.
Research tools, reagents and consumables, laboratory instruments, bioprocessing inputs, and the contract research and manufacturing that serves them.
What drives the number
The mix between catalog and custom revenue, which is priced very differently: catalog revenue recurs without a salesperson and carries the category's margin. For instruments, the consumable stream attached to the installed base rather than the placements themselves. Regulatory posture, since research use only, analyte specific reagent and IVD are three different assets under similar labels. For antibodies and assays, the published citation base functions as a moat.
What diligence finds
Single-source raw materials on no contract. In-licensing from universities or institutions with change of control provisions. Research-labelled products in clinical use. Marketing claims the validation does not support. Reserve accounting on short-dated inventory.
In vitro diagnostics, laboratory developed tests, clinical laboratories and diagnostic instruments.
What drives the number
Regulatory pathway above almost everything else: a cleared or approved product and a laboratory developed test are different assets with different buyers. After that, reimbursement coverage and coding, test volume, and payer mix.
What diligence finds
Coverage determinations and billing compliance. Laboratory accreditation. Regulatory exposure where tests have outrun their pathway. Volumes that do not hold once payer mix is normalised.
Specialty pharmaceuticals, contract development and manufacturing, contract research, active ingredients and drug delivery.
What drives the number
For services businesses, contract duration and customer concentration against installed capacity. For product businesses, the balance between commercial revenue and pipeline, and how defensible the regulatory position is.
What diligence finds
Inspection history and quality system maturity. Customer contracts and their change of control provisions. Intellectual property and in-licensing terms. Capacity utilisation that does not survive closer examination.
Provider groups, ancillary and outsourced services, and multi-site care delivery.
What drives the number
Payer mix, geographic density, and how much clinical capacity exists independent of the owner. Buyers are platform-backed consolidators paying for scale within a market.
What diligence finds
Reimbursement exposure. Credentialing and licensing. Corporate practice restrictions where they apply. Owner-operators who are also the clinical capacity being sold.
Clinical software, revenue cycle management, patient engagement, and health data and analytics.
What drives the number
Recurring revenue and net retention, depth of integration into clinical systems, and whether the product is embedded in a workflow or adjacent to one. Embedded software is difficult to displace and is priced accordingly.
What diligence finds
Security and privacy posture. Contract terms and assignability. Dependence on specific electronic health record integrations. Revenue recognition on multi-year implementations.
Vertical software, infrastructure and data businesses, both serving the sectors above and beyond them.
What drives the number
Annual recurring revenue and its growth, net revenue retention, gross margin, and the payback period on customer acquisition. Retention is the measure that most separates valuations at this size.
What diligence finds
Revenue recognition. Churn by cohort rather than in aggregate. Contract assignability. Open source and intellectual property provenance. Growth that does not survive a normalised view of sales and marketing spend.
Process and capital equipment, engineered components, industrial services, and water and environmental technology.
What drives the number
The mix between new equipment and aftermarket. New equipment is project-driven and lumpy; parts, consumables and service against an installed base recur, and are valued on an entirely different basis. The ratio of aftermarket revenue to units in the field is often the largest single determinant of the multiple, and is often understated by owners who think of the business as a manufacturer. After that: end-market and customer concentration, margin durability through the cycle, and any software or automation content in the product.
What diligence finds
Deferred capital expenditure and the true condition of plant. Environmental exposure and site history. Warranty and performance-guarantee obligations on systems already installed. Revenue recognition on long-lead projects. Process knowledge that resides with long-tenured individuals rather than in documented systems, which is a valuation issue as much as an operational one.
We are not restricted to the sectors above.
What drives the number
Whether we can be genuinely useful, which depends on knowing the buyer universe for a business rather than on having published a page about its industry.
What diligence finds
Where we are not the right firm for a mandate, we say so in the first conversation and, where we can, identify someone who is.
Acquirers
Who buys a business determines more than the price. Each class of acquirer pays for something different, behaves differently in diligence, and wants something different from the owner afterwards. Part of running a process properly is knowing which classes a business genuinely appeals to, and not spending a timetable on those it does not.
Corporates buying a capability, a product gap, a geography or a channel. They can pay the most, because they are the only class able to underwrite synergy, and they are generally the slowest: internal approval, integration planning, and in larger cases regulatory clearance. Certainty of completion is high once a strategic is committed and lowest before that point.
A private equity owned company acquiring within its own niche. Frequently the most realistic acquirer at this size: the sector is already understood, the process has been run before, decisions are quick, and the business is priced on accretion to an existing base rather than on a standalone view. The trade-off is that the acquired company is absorbed rather than kept whole.
A sponsor acquiring directly to establish a platform. They require a growth thesis and they require management to remain, which makes this the right class for an owner seeking partial liquidity and the wrong one for an owner who intends to leave. Leverage forms part of the price, and therefore part of the risk.
Patient capital with no fund life to manage. Headline value is sometimes lower and terms are often better. For owners who care what happens to the business and the people in it after completion, this class merits more attention than it customarily receives.
A single, highly motivated acquirer, in some cases without committed capital behind it. Execution risk is the consideration, and it is assessed before a process begins rather than discovered in its fifth month.
Consolidation at the top of a sector drives acquisition appetite beneath it. When large platforms combine, the enlarged entity carries gaps in its product range, geography or capability, and those gaps are filled by acquiring specialist companies at the size range we advise on. Sustained large-cap activity in a sector is generally a leading indicator of demand for the companies below it.
For buyers
We maintain a register of strategic acquirers, platforms and funds active in the sectors above. Acquirers are welcome to register their criteria; we make contact when a mandate corresponds to them.
Contact
Thirty minutes, without materials or obligation. We will give you a considered view of value, of what is currently constraining it, and of whether this is the right point at which to act.
Where our view is that you should wait, we will say so.
Contact us