Source Talks is a series where we discuss deal origination with expert PE and M&A pros.
In this interview, David Toll of PrivateEquityCareer.com speaks with David Acharya, Managing Director at Acharya Capital Partners on their multi-pronged approach to find opportunities, and the value of using data to score your origination strategy relative to competitors.
David, start off telling us about Acharya Capital Partners and your role there.
We are a NYC-based private equity firm focused on the middle market. We invest in companies with EBITDA of $3 million to $20 million, primarily in three industries – TMT, business marketing services, and light manufacturing.
David, how do you find out about transactions and potential target opportunities?
It’s a multi-pronged approach. I think it’s a combination of a number of factors: outreach to bankers and business brokers, outreach to service providers like lawyers and accountants and consultants. Being a former investment banker myself, I have no problems picking up the phone and calling a CEO or owner directly. I’ve also used a lot of online databases, let’s call it the technology stack, in helping find opportunities. What I would recommend is having a well-built and well thought out CRM system, which can help you leverage the technology. I also feel that given how many companies there are looking for capital, using a technology source such as SPS is something that is worthwhile pursuing. It enables you to get quality data, enables you to do something that’s very hard to do in the private markets: How are you doing relative to the competitors?
So David, I know one of your favorite portfolio companies there is Impact XM. They’re an experiential marketing agency that does tradeshows and virtual events. Tell us how you found that company.
It was found by good old fashion networking. Like a lot of middle market professionals, I’m very active with the Association for Corporate Growth, ACG. I happened to go to an event where I was speaking and I met a consultant, and he introduced me to a fellow accountant in the room who introduced me to an M&A advisor and put me in touch with with the company shortly afterwards. We were able to get to the finish line within a short period of time. I had a lot of experience in investing in the sector and knew a lot about the sector. And quite frankly, also not just found the right opportunity, but found the right management team. So it’s one of my favorites because, obviously it’s doing very well, but also at the same time, I have a lot of experience in the trade show sector and in the face-to-face marketing sector. It’s an industry that quite frankly, is very fun to be around with and a lot of fun to to invest in.