Proprietary Angle Assessment

When to use

Use this skill the moment someone calls a deal proprietary, and always before a pre-emptive bid is underwritten -- the premium usually arrives attached to the claim. Start from the assumption that there is no angle; most do not survive step two.

What it does

Produces a short assessment: the claim written plainly with its holder named, the result of each evidence test, a grade of real, partial or none, what the angle mechanically buys, and the premium it must justify against the expected clearing range.

Method

Step 1 -- Write the claim and name the person who holds it

Firms do not have relationships; individuals do. If the claim cannot be attached to a named partner and a named counterparty, it is an institutional attribute, not an angle -- and "we know this sector" is marketing until tested.

Step 2 -- Apply the substitution test

Substitute each of the ten most likely bidders into the claim. If it stays true for three or more, it is a table stake. Sector focus, a vertical team, a buy-and-build record and "we move quickly" all fail this test in most mid-market processes.

Step 3 -- Test relationship with dates, not adjectives

Record when the principal last spoke with the owner, who initiated it, and what the owner asked for. An unprompted inbound is evidence; three meetings the fund arranged are hospitality. Coverage without reciprocity is a mailing list.

Step 4 -- Test credibility with a reference the owner would call

Credibility means a named chief executive in the same sub-sector who will take the owner's call and say something specific about how the fund behaved after closing, ideally when the plan went wrong. A portfolio page and two panels are not credibility.

Step 5 -- Test speed, certainty and structure against your own record

Certainty is measurable: across the last five processes, median days from exclusivity to signing, re-trades, deals abandoned post-IOI. Structure is something the fund owns and a generalist cannot replicate: an adjacent portfolio asset, an operating partner who has run the business, a longer-hold vehicle. Price is not structure.

Step 6 -- Grade it, and default to none

Real requires evidence in two categories plus a mechanism the seller will act on. Partial buys a look, not a process. None is the default, and the honest answer in most cases -- including many where the fund has met the owner repeatedly.

Step 7 -- Price what the angle buys

State what it mechanically delivers -- exclusivity, a bilateral negotiation, a pre-emptive window, a first call before the bank's mailing -- and the premium over the expected range that acting costs. In a broad auction the clearing price is set by the most optimistic underwriter in the room, and a partial angle is worth nothing against that bidder.

Inputs

• The claimed angle as stated by the deal team, verbatim
• Contact history with the owner: dates, initiator, substance
• The fund's process record: exclusivity-to-signing days, re-trades, drops
• The likely bidder list, sponsors and strategics
• Expected valuation range from comparable processes

Output format

• The claim in one sentence, with the individual holding it named
• Substitution test result, naming the bidders it also holds for
• Evidence by category: relationship, credibility, certainty, structure
• Grade: real, partial or none, with the reasoning
• What the angle mechanically buys, in process terms
• The premium it must justify against the expected clearing range
• Recommended posture: pre-empt, participate, or decline

Example

Fictional worked example -- Halden Packaging.

Claim: "proprietary, because our operating partner sat on a competitor's board." Relationship: two calls in 14 months, both initiated by us. Substitution: four of the ten likely bidders field a packaging operating partner, so this is a table stake. Certainty: the last five deals signed a median 31 days from exclusivity with no re-trades -- real, and verifiable by the seller's adviser. Grade: partial; it buys a three-week pre-emptive window, not exclusivity.

Price: on EBITDA of GBP 16M, a range of 8.5-9.5x is GBP 136M to GBP 152M. Pre-empting at the 9.0x mid, GBP 144M, would be topped in a competitive process, so a serious pre-empt costs GBP 152M -- GBP 8M above the mid, which a partial angle does not buy.