The tough decisions 🤔

Welcome back to another edition of The Wise Exit!

In today’s newsletter: 

• 3 lessons from Sachin and Binny Bansal about their exit from Flipkart 🛒

• A brand new episode of the Cashing Out podcast 🎧

• Our round-up of interesting M&A transactions from the past week 💰

Let’s dive in!

Buyer Spotlight

Every week we feature 4 buyers who are looking to acquire businesses in specific industries:

• Buyer looking for companies in utilities, infrastructure, facility services and maintenance – with EBITDA > $5 million.

• Buyer seeking digital marketing and publication services – with EBITDA > $5 million.

• Buyer in search of climate impact, ESG and recycling companies – with EBITDA, between $2-10 million.

• Buyer looking for construction and industrial services in the Midwest – with EBITDA, between $1-3 million.

If you’re interested in learning more about these opportunities, reply to this email and let us know!

Do you know someone who owns a business that matches any of the above criteria? Use your unique referral link to refer them to The Wise Exit:https://newsletter.exitwise.com/subscribe?ref=PLACEHOLDER

Featured Founders

Sachin Bansal and Binny Bansal co-founded Flipkart in 2007. An e-commerce shopping website, it sells a wide range of products and has become a household name in India.

In 2018, Flipkart was valued at US$20.8 million and Walmart acquired a 77% controlling stake in it for US$16 billion. Sachin sold his 5.5% stake for about US$1 billion and left the company upon acquisition, while Binny stayed on for 6 months. 

Sachin now heads the financial services company, Navi, and Binny co-founded xto10x Technologies. Here are 3 important M&A lessons from the Bansals’ exit.

M&A Lesson 1: Regroup during bad years

When Flipkart wasn’t showing signs of growth in 2012, Sachin knew he had to regroup. He contemplated going public but he believed in the growing e-commerce market in India and decided to make changes on his own instead.

He generated new ways to reduce costs and came up with better ways to appeal to customers. The company did gradually see an upturn and eventually they started seeing exponential growth. 

M&A Lesson 2: Make tough decisions, even if they’re emotional

When Sachin left Flipkart, the two co-founders talked about how difficult the decision was. Binny said, “Sachin and I go a long way. We met in 2005 when we were [at the Indian Institute of Technology, Delhi]...

“We used to hang out together all the time and we were best of friends. I think both of us have been sort of a pillar of support to each other.” Details of exactly why Sachin didn’t stay on after the acquisition haven’t been publicized, but it was part of the deal that he would step down, which Binny called a “very emotional moment.” 

M&A Lesson 3: Know when it’s time to move on

As Flipkart became successful, Sachin and Binny thought about the company’s endgame. Raise money or sell? Listing the company felt like there were too many external variables, too many things outside of their control. 

When the Walmart deal came to them, they knew it was best to move on.

“Given the way the capital markets are, the way competition is, the way it is going to evolve, continuing the treadmill of raising more capital…” said Binny. “We felt that the Walmart transaction was the best way forward, at least on the capital front.”

Cashing Out: Building (And Selling) Successful eCommerce Brands

Robb Green has built and sold 9 e-commerce brands and now buys Amazon-focused e-commerce brands and optimizes them for cash flow. 

In this episode, Robb talks about:

• His evaluation criteria for starting e-commerce brands

• How he decides when it's time to sell a business

• How he brings his teenage kids into these companies and exposes them to the highs and lows of the life of an entrepreneur

M&A News 📰

• Travel & Tourism: Vail Resorts to acquire Crans-Montana Mountain Resort in Switzerland, the company's second ski resort in Europe. 

• EdTech: SoapBox Labs, the Irish company that makes AI-powered voice technology for children, has been acquired by US-based edtech Curriculum Associates in its aim to bring AI to more classrooms.

• Logistics: Kuehne+Nagel, the world’s largest 3PL, has acquired Farrow, a 112-year-old, family-owned customs broker based in Ontario, Canada, to expand its customs offerings at the Canadian and Mexican borders.

• Medical: Toronto AI startup, Semantic Health, has been acquired by Utah-based AAPC, a medical coding, billing and auditing firm.

That’s all for now. 

Tune in next Wednesday for another set of M&A lessons, and have a great rest of the week. 👋