A recurring challenge defines modern M&A: scarcity of quality deals and record-high valuations. However, industry data suggests the problem isn't scarcity; it's sourcing failure.
1. The Problem: An Invisible Market of 82%
According to industry reports (*) the average Private Equity firm covers a staggering 17.6% of its relevant target market. Even firms in the top quartile struggle, reaching only 27.5%. This means the median firm is functionally blind to over 82% of the companies that would perfectly match its investment mandate and thesis.
Why does this vast, relevant market remain invisible? The answer lies in the over-reliance on reactive, transactional sourcing—primarily auction processes led by investment banks. While essential for certain deals, this model inevitably funnels firms toward highly competitive situations, driving up multiples and eroding potential profitability.
2. The Tweak: Shifting to Proactive, Peer-to-Peer Sourcing
The solution is not more data; it's smarter engagement. The sophisticated buyers who succeed in M&A are making a strategic shift away from competitive bidding toward Proactive, Mandated Buy-Side Sourcing.
At Feu·Du·Nord, we call this approach the necessary "tweak." It requires moving the M&A conversation out of the transactional sphere and into a strategic, peer-to-peer dialogue focused on value creation.
Replacing the Cold Call with Credibility
For a Family-Owned business or a founder CEO, the first contact is critical. A cold call from a large PE fund or a generic broker can often be met with immediate resistance. The crucial shift is replacing this with an immediate bridge of credibility.
Our team is structured to provide this bridge. We have sat on all sides of the M&A table: as C-level business owners, industry peers, and operational integration leaders. This experience allows us to engage targets as strategic equals, not just as capital providers.
3. The Feu·Du·Nord Edge: Strategic Alignment and Trust
Our Proactive Buy-Side Sourcing methodology, beginning with highly customized M&A Scouting Reports, is built to thrive in that missing 82% of the market.
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Strategic Alignment: We don't present an offer; we present a Growth Case. Our deep, fact-based understanding of the target's sector allows us to articulate a compelling vision for the next chapter. This shared language addresses the operational and strategic concerns of the owner, not just their valuation demands.
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De-Risking the Investment: Our reports include elements like the Integration Readiness Assessment. By incorporating operational due diligence and synergy mapping into the scouting phase, we help buyers de-risk the investment before a Letter of Intent (LOI) is even signed—a crucial tool for CFOs and Corporate Development teams.
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Trust and Proprietary Deal Flow: This level of trust and strategic depth is the only reliable way to motivate a private owner to open a confidential, proprietary transaction. It assures the owner that their legacy and operations are understood and prioritized, making the exclusive, off-market deal a secure and appealing option.
To compete in today's M&A landscape, buyers cannot afford to ignore over four-fifths of the market. The next generation of value is being created not in crowded auctions, but through targeted, peer-to-peer engagement that unearths the hidden 82%.
By adopting this proactive, intelligence-driven Buy-Side Sourcing model, firms can transition from market followers to market definers, securing superior assets at favorable terms.
4. How we help
MARKET STRATEGIES
Understanding markets and value creation dynamics is the essence of what we do. We only advise in verticals that we master and we start always by listening carefully to our clients. Our strategy thinking is always precise and fact based, sitting right in the center of the Board Agenda. We help with:
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Strategy checks
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Board memberships, OP-Role in Portfolio companies
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Strategy Definition
FINANCIAL ADVISORY
Our Financial Advisory do not compare nor substitute accounting or transaction services. We will focus on the strategy of a transaction, the business plan, the scenarios and the valuation of it. We play the role of marking well the yellow road with side red lines for any transaction, making sure of governance and focus if required.
- M&A Scouting of proprietary deals
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M&A approach, strat & valuation
- Pre-DD Sanity Checks / Risks Preview
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Negotiation guide
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Transaction governance
INDUSTRIAL PARTNERSHIPS
Despite difficulties, or precisely because of them, we know how to help on the choice and formation of Strategic Alliances and Joint Ventures, typically for achieving Capital Solutions, Market Reach, or Winning Tenders.
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Strat Alliances guide
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Tenders in co-operation
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Public-Private Partnerships
CO-INVESTMENTS
Whether it is the need of an Operating Partner, Or the unique opportunity to make a Direct co-Investment in a specific club deal. Feu du Nord is the Investor's choice for a guarantee of independence, commitment, purpose and alignment with the expected results.
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Operating Partnerships
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Direct Co-Investments (Club Deals)
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Joint-Ventures
(*) SPS Origination Report 2024