𝐔𝐧𝐥𝐨𝐜𝐤𝐢𝐧𝐠 𝐚𝐥𝐩𝐡𝐚 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐦𝐚𝐥𝐥 𝐛𝐮𝐲𝐨𝐮𝐭 𝐦𝐚𝐫𝐤𝐞𝐭

At ekwithree, we focus on opportunities where disciplined investing and active value creation can truly make a difference. Among the various deal sizes, small buyouts (up to ~€50m) stand out for their potential. Here’s why this part of the market offers a particularly attractive risk-reward profile:

🎲 𝐋𝐞𝐬𝐬 𝐜𝐫𝐨𝐰𝐝𝐞𝐝, 𝐦𝐨𝐫𝐞 𝐚𝐭𝐭𝐫𝐚𝐜𝐭𝐢𝐯𝐞 𝐞𝐧𝐭𝐫𝐲 𝐩𝐫𝐢𝐜𝐞𝐬

Smaller companies are often still founder-led and not sold through highly competitive auction processes. That means less bidder pressure and more reasonable valuation multiples on entry.

🎲 𝐇𝐚𝐧𝐝𝐬-𝐨𝐧 𝐯𝐚𝐥𝐮𝐞 𝐜𝐫𝐞𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐛𝐢𝐠𝐠𝐞𝐫 𝐢𝐦𝐩𝐚𝐜𝐭

Operational improvements, digitalisation, professionalisation, commercial optimisation - in smaller companies, these initiatives move the needle faster and more visibly than in large, mature businesses. For us as investors, it’s particularly compelling to observe this development and see how targeted support translates into measurable improvement.

🎲 𝐋𝐨𝐰𝐞𝐫 𝐞𝐧𝐭𝐫𝐲 𝐦𝐮𝐥𝐭𝐢𝐩𝐥𝐞𝐬

Across studies, small and mid-market buyout funds consistently pay lower prices relative to earnings than large/mega funds. Buying at lower entry multiples helps protect the downside while giving more room for upside if the company grows or improves.

🎲 𝐌𝐨𝐫𝐞 𝐞𝐱𝐢𝐭 𝐨𝐩𝐭𝐢𝐨𝐧𝐬

Smaller companies can be acquired by strategic/trade buyers, mid-market private equity funds or larger buyout funds. This broader exit universe helps reduce timing risk and increases the probability of strong outcomes.

🎲 𝐒𝐭𝐫𝐨𝐧𝐠𝐞𝐫 𝐡𝐢𝐬𝐭𝐨𝐫𝐢𝐜𝐚𝐥 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 (𝐓𝐕𝐏𝐈)

Industry research shows that small buyout funds have produced higher average TVPI and more top-quartile performers than mid and large buyout funds. The dispersion is higher, but so is the outperformance potential when disciplined value creation is applied.

At ekwithree, these dynamics align perfectly with our approach: targeted investments, operational partnership, and a focus on companies where our involvement can genuinely accelerate growth.