Case Study: Creating a Deal Thesis for a Successful Exit

Written By: Gerald O’Dwyer II The PE Guru — Blackmore Partners, Inc | February 11th, 2025

This case study is an exhaustive, battle-tested manual for executives aiming to create and execute a deal thesis that positions their company for a successful exit. The most powerful advantage in private equity (PE) is not brute force but maneuver warfare—leveraging initiative, originality, and strategy to gain a decisive advantage.

This “how-to” guide provides a step-by-step framework that executives must internalize and apply to avoid being one of the 99.9% who give up or fail to execute effectively. The difference between those who succeed and those who don’t is not intelligence, experience, or background—it’s desire, faith, and persistence.

💡 “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. I’ve failed over and over again. And that is why I succeed.” – Michael Jordan

The biggest challenge will not be the deal itself—it will be your ability to stay in the game, keep executing, and trust the process.

I. Introduction: The Importance of a Deal Thesis

A well-structured deal thesis is the strategic blueprint that transforms an investment opportunity into an exit-ready, high-value business.

Executives who enter the PE world with a W2 mindset—waiting for deals to come to them, applying to job postings, or hoping PE firms will discover their expertise—fail. The Investor-Operator mindset is built on proactive positioning, relentless outreach, and strategic execution.

🚨 Key Presuppositions of This Model
✅ PE Is a Numbers Game: Build a funnel of at least 200 PE firms per year.
✅ Winners Play the Long Game: Most executives quit too soon. Stay in the game.
✅ You Are Not Looking for a Job—You Are Building Wealth: PE firms back proven strategists, not job seekers.
✅ Brute Force Does Not Work—Maneuver Warfare Does: Strike where competitors are weak, not where they are strong.

II. The Deal Thesis Framework

A strong deal thesis must be data-driven, measurable, and structured around key investment principles. The framework consists of four critical elements:

1. Market Opportunity & Industry Dynamics

🔹 Goal: Define the total addressable market (TAM), key growth drivers, and risks.

✅ Size & Growth:

Understand the CAGR (compound annual growth rate) and macroeconomic forces driving demand.
Example: The specialty chemical repackaging market is expected to grow at 7.2% CAGR through 2031, driven by semiconductor and biotech industry demand.

✅ Industry Fragmentation & Roll-Up Potential:

Highly fragmented markets create M&A opportunities.
Example: With over 100 small players in the U.S. and limited customer-centric solutions from incumbents like Avantor, the market is ripe for consolidation.

✅ Key Trends & Risks:

Regulation, technology adoption, and shifting customer preferences can make or break a deal.
Example: Tightening FDA regulations in pharmaceutical chemicals create barriers to entry for new competitors, favoring established players.

2. Competitive Landscape & Differentiation

🔹 Goal: Define how you outmaneuver competitors and establish an unassailable position.

✅ SWOT Analysis:

Strengths & Weaknesses: Identify what makes the business uniquely positioned.
Example: *Weaknesses of incumbent firms include *slow adoption of automation. Our proprietary AI-based inventory management system creates a 15% cost advantage.

✅ Competitive Positioning:

Highlight pricing power, customer loyalty, and brand positioning.
Example: We target niche biotech customers who require high-purity chemicals in small batches—segments overlooked by bulk chemical suppliers.

✅ Barriers to Entry:

Regulatory approvals, IP protection, and supply chain efficiencies create natural defensive advantages.

3. Value Creation Levers

🔹 Goal: Define the three major levers that will drive EBITDA growth and valuation increases.

✅ Revenue Growth Strategies:

New Market Expansion: Example: Expanding into medical-grade coatings for biotech clients adds a $50M TAM opportunity.
Pricing & Margin Expansion: Example: Increasing direct-to-manufacturer sales will boost gross margins by 300 basis points.

✅ Cost Optimization & EBITDA Expansion:

Automation & AI: Example: Implementing predictive maintenance AI can reduce downtime by 22%, boosting margins.
Supply Chain Consolidation: Example: Negotiating bulk contracts with suppliers will cut COGS by 5% within three years.

✅ Buy-and-Build M&A Strategy:

Define Target Acquisitions: Example: Acquiring businesses with $10M-$50M revenue in specialty chemical packaging to expand into North America and Europe.

III. Creating the Exit Strategy

A PE-backed deal is structured with the exit in mind. If you do not have a clearly defined exit plan, you do not have a deal.

1. Define the Exit Objectives

✅ Target Valuation:

Example: Target a $500M valuation at a 10x EBITDA multiple within five years.

✅ Exit Type & Buyer Targeting:

Strategic Buyers: Corporations that will pay premium multiples for synergies.
Secondary PE Buyout: PE firms looking for bolt-on acquisitions.
IPO: Rare but possible for high-growth, tech-enabled businesses.

✅ Exit Readiness Milestones:

Year 1-2: Organic growth, acquisitions, cost reduction programs.
Year 3-4: Further acquisitions, consolidation, improving EBITDA margins.
Year 5: Position for exit with maximized profitability and a strong buyer pipeline.

IV. Process for Executing the Deal Thesis

1. Build the Right PE Network

✔ Engage 200+ PE firms annually using BlackmoreConnects, PitchBook, and Cyndx.
✔ Attend PE conferences, ACG events, and Mastermind groups.
✔ Build direct relationships with industry owners, not just PE firms.

2. Align Operations for Value Creation

✔ Implement automation, cost efficiencies, and pricing strategies that improve EBITDA.
✔ Ensure KPIs align with the target exit valuation.

3. Execute Buy-and-Build M&A Strategy

✔ Develop a pipeline of acquisition targets that add revenue and margin growth.
✔ Focus on operational integration to maximize synergies.

4. Track KPIs & Adjust Strategy

✔ Monitor revenue growth, EBITDA margin expansion, and cost reduction.
✔ Refine the business model based on market feedback.

5. Prepare the Business for Exit

✔ Develop an investment narrative for buyers.
✔ Market the business to strategic buyers and PE firms well before exit.

V. Conclusion: The Investor-Operator Mindset Wins

🚀 The difference between executives who land PE roles and execute deals and those who don’t is NOT intelligence or background—it’s the ability to keep moving forward while others quit.

🔥 PE is a long-term campaign, not a one-time battle.
🔥 You must maneuver, not compete head-on.
🔥 You must outwork and outlast those who give up too soon.

💡 “Some people want it to happen, some wish it would happen, others make it happen.” – Michael Jordan

Make it happen. 🚀