Transcription
In the last 90 days, we basically fired 80% of our acquisitions.com team and I replaced them with some of what you're about to see today using AI. The revenue grew 37% like right after and profit grew with it. This is also the same process that helped me sell our rollups.com to Naval Ravikans company and at this point we supported with this same processes over a billion dollar in M&A transactions. So everything I'm about to show you is the exact system we used to get there. I'm not going to show a demo. This is like the financial modeling playbook on exactly how we did it. So things like quality of earnings, DCF valuation, synergy modeling, proforma consolidation, and I'm going to show you how we run everything as one pipeline. So all the M&A financial part is now can be done basically with one prompt. And I'll show you everything like AI code did it all for me into one Excel file, the whole deal and how you could use it as well.
So, first just to put things in in kind of perspective why I think Claude and Claude Code specifically beats any other AI for M&A work. Like this is the shift that makes everything else possible. Like I'll show you guys what I have going on at the same time. It's pretty pretty sleek. Like if you see I have multiple like agents running at the same time all basically supporting what in the past would cost a small fortune of like accountants, financial analysts, anything you can think of. And now with AI we could do that. So I'll share with you the setup. I'll share with you what that looks like. I'll share with you how you make sure that you don't get clo destroying your data. then the prompt of what it looks like to help with the DCF valuation with the synergy modeling all of that things. And in the end, I'll also show you how you can like package everything as a reusable skill so your next deal can run with a single command. If you want to learn anything on how acquisitions, finance specifically works with AI, then this video is the video you need to watch this year.
So, um you've seen kind of some of the cloud code agents that I got. People don't know but I'm basically in the tech space for more than 20 years and now it's like a dream come true for someone who don't like to be a developer but like enjoy the value of tech and developing. From what I'm seeing most people trying to use AI for business use and they use just the chat and for that the problem is that there every prompt is a chat window is a standalone conversation. You ask the chat to extract data it responds. You ask it for numbers it responds. You ask for it to build a model it can respond. So at every step you're the one holding everything together, but there's nothing that's working for you. Like you're basically using the chat as kind like I don't know, you're a body and not as your employee. For M&A work, that doesn't kill. It doesn't scale. So the Q of E feeds the valuation. The valuation feeds the synergy case. The synergy case feeds perform. Too many chats in, you get errors creep in that you won't catch until someone ask the hard questions in an investment meeting. All right. So cloud code changes everything and you basically give it the full objective once. It plans, it executes, it read files, it can write Excels, it can write checks, its own work, saves everything to your computer. It's one pipeline and your job then only becomes to review the output, not managing all the workflow.
Yeah. Yeah, like on one of our last roll up, four Bolton acquisitions in two quarters. We did that shift alone cut our modeling time from around 50 hours per deal to under four hours of senior work like senior executives instead of like 50. Same quality, same deliverables. So that's that's the unlock before any prompt the setup. This is where by the way most people mess up. They let AI go loose on their whole document folder. So what we do instead is we create one parent folder named after the target. For this video we're showing you a company called Lumira. Uh that's like a anonymous name. It's a B2B SAS company with 3.2 million in annual recuring revenue, 1 million in IBIDA. They grow every year. So this is kind like how you're going to see that. Inside the folder, what we're going to do is four different subfolders. We're going to have the context, the target data, the working clouds like the workspace, and the deliverables. The first rule for that is by the way and this is no exception before claude touches anything the target sent you back it up with a read only folder cloud code can delete files so treat the tool like a first year analyst with admin keys like trust the tool but verify when I go to cloud if you never used it like if you want to use the terminal quickly share with you this is you don't have to use this but like you can basically open a new thing a terminal type cloud and then just work with it, right? You can tell him whatever you want. You can tell him, "Hey, help me create a financial model for my next acquisition, right?" And you start to work with him as if he's one of your employee. And I'll show you in a bit like basically you can take over. I don't want to show you too many like too much information that is not something that I should share in public. But the the way to work with it is to work with him like he's in your one of your employee and then amazing things can happen. Like I'll show with you some of the stuff that we've been doing with it. Let me share with you my the financial model so you see what's up and we'll go through it like step by step. All of it was done by the way with like cloud with AI. I didn't touch anything. So let me share my screen just so you see the level of quality that it was able to build me like the summary of the deal quality of earnings DCF valuation synergy model proforma and then I'll show you how cloth built it and what it took care of but those are things that in the past I paid so much money so much money I paid to different analysts and whatnot and it's the first time that it's like okay just run with it and um it can save you a lot of lot of time let's say that for anything related to analyzing deals, making offers, doing due diligence, it would cost a fortune. Obviously, depends on the size of the deal. If it's a small deal, maybe just few thousand, but if it's a bigger deal, then it's much much more exciting.
So, tab number one is the deal summary, right? So, that's a snapshot of the deal in short, the RR, the Ebida, the EV multiple, the leverage. It's a clear kind like procedure, past recommendation in plain English, and it's a guide to what's in each other tab. Right. Tub number two, that's the quality of earnings. All right, that's pretty pretty cool. You can see Ebida bridge from sellers reporting number to true adjusted EBIDA surface all adjustment candidates across five categories. You can see one items, one-time items, owner comp versus market, super cool things. Accounting policy differences, revenue recognition anomalies. So those kind of things. things. I don't know if you had a chance to work with some analysts in the past. That would cost a fortune. So again, in the end, if you want, let me know in the comments below. I'll share with you the full prompt eventually. I took all the different agents that I got going on and I asked it like get me one full prompt to create all of this. So if you want it, just let me know in the comments below and I'll get it going for you. Uh then we have of course the BCF valuation. So that's pretty cool as well. That's the third tab. So you can see like the forecast that's pretty cool, right? The five-year forecast. You can see assumptions like the terminal growth, the tax rate, revenue growth by year, eB margins, full P&L to free cash flow. Pretty pretty cool, right? To see all of those different things. Let's go to tab number four. Now that's also pretty pretty nice. That's the synergy model. So we have three sections here, right? We have the cost synergies by function. If it's finance, HR, IT, real estate, and whatnot, you have revenue synergies by type. That's pretty cool, right? You see the cross cell, pricing, geographic expansion, the synergies. You have the churn. That's pretty cool. You have different scenarios as well. Again, things that in the past if you wanted someone to do it for you would cost a small fortune. So, that's pretty pretty cool. And let's move into the uh fifth up to the pro fora right you can see the com combined P&L the acquired the target all those the eliminations the assumption of the deal if it's 60% debt 40% equity right the dilution analysis and then at tab number six if you're asking how um claude built that so we have some of that as well right kind like a full plain English walk through. So for each step of the workflow, you see what Claw did, how long it took, the assumption, what were made, what the user, me in this case, still need to verify. So again, it's pretty cool. It's like having a fulltime analyst to just look at your things and then send you some kind of a summary. Uh and when you finish, you can of course run the verification, right? Look at steel everything, look at the errors, look at what not. That's pretty pretty cool.
Yeah. I mean in our case this ran for just like about whatever few minutes. It took me some times to build it. Like around 175 formulas over time that I needed to to adjust and work on. Look at what Claude just built. I mean it's pretty pretty remarkable. That's the future of M&A in my opinion. Like M&A is going to completely change. We're going to be able to find deals using AI. We're going to be able to analyze deals and make offers using AI. We're going to be able to do outreach to deals to investors using AI. It's uh pretty pretty remarkable. So, if you want us to implement some of those things for you, you can book a call with us. I consider also doing some kind of a workshop as well going through a lot of those things. So, if you want that, let me know. But uh yeah, just wanted to share what's possible and hopefully this was valuable for