🌟 Getting Started

Welcome to the second edition of KSMC Double Klick – a bi-weekly newsletter designed to keep you ahead of the curve in today's fast-evolving business landscape.

If you are a CXO or business owner, finance or M&A professional at a private equity firm or corporation, or an aspiring entrepreneur on the ETA route – this newsletter delivers the market intelligence and strategic insights you need to make informed decisions.

In every edition, we'll deliver curated content, analysis, and actionable takeaways that drive your success.

💡 Why KSMC Double Klick?

KSMC Double Klick is designed solely to keep you informed, relevant, and competitive in today's dynamic business environment.

Let's double klick into smarter business intelligence — together.

Warm regards,
Kapil Sukhija
Founder, KSMC

📊 Expert Focus

💰 Valuation in Uncertainty: The Market Reality Check

📋 What This Means: Valuation in uncertainty refers to determining a company's worth when traditional financial models face challenges from customer concentration, family ownership transitions, or regional market dynamics. This involves multiple scenario analysis, management transition planning, and risk-adjusted valuation approaches tailored to market realities.

🎯 The Challenge: Traditional DCF models break down when dealing with owner-operator businesses, concentrated customer bases, or regional market dependencies common in middle market companies.

⚖️ Why It Matters: Average middle market M&A valuations declined to 9.4x EV/EBITDA in 2024 Middle Market M&A Valuations Index | Capstone Partners, but deal volume shows a general upward trend in May 2025, indicating a resurgence in M&A activity per M&A activity insights: June 2025 | EY - US. The vast majority (79%) of total advisors surveyed anticipate 2025 deal flow to increase as per Global M&A Trends Survey Report (2024-2025) | Capstone Partners, making accurate valuation methodology critical as the market rebounds. Manufacturing has shown resilience with average TEV/EBITDA multiple increasing from 6.5x to 6.9x Middle-Market Deal Activity Advances in 2024; Is Momentum Building? | Forvis Mazars year-over-year, while there was an ~9% increase in the valuation multiple offered by buyers, from 10.2x to 11.1x, from H1 2024 to H1 2025 Manufacturing EBITDA & Valuation Multiples – 2025 Report – First Page Sage in the manufacturing sector specifically.

🏆 Real Deal Example: When a strategic buyer evaluated a $50 million revenue business services company in early 2024, traditional models suggested 6.5x EBITDA. However, the company had 40% revenue concentration with two key customers, family ownership succession issues, and dependency on the founder's relationships. Using multiple scenario analysis—modeling base case, upside, and downside outcomes for customer retention rates, management transition success, and competitive responses—the buyer structured a deal at 5.2x EBITDA with earnouts tied to customer retention and revenue diversification milestones. This risk-adjusted approach proved prescient as middle market valuations compressed through 2024, but positioned both parties well for the 2025 recovery with built-in upside mechanisms.

🔑 Our Take: With 63% of leveraged lenders expecting momentum for more M&A/LBO deal flow to build in 2025 as per 2025 M&A Outlook: Is the Middle Market Finally Ready to Move? | Eaton Square, middle market valuations require multiple scenario analysis that accounts for concentration risks, management transitions, and market position vulnerabilities – especially as buyers become more selective in the recovering market.

🤝 Discussion Welcome: Have questions about how risk-adjusted valuation approaches apply to your industry's unique challenges as we navigate the 2025 market recovery? We enjoy these strategic discussions about valuation methodology.

🌍 Global Pulse

⚡ When Machines Match Humans: Amazon's Robot Army Hits 1 Million 🏭

Amazon has reached a striking milestone—deploying its one millionth warehouse robot after 13 years of automation! The milestone robot was recently delivered to a fulfillment center in Japan. With approximately 1.56 million total employees worldwide, the company is swiftly approaching a point where robots may equal human workers in its facilities, with 75% of global deliveries already getting robotic assistance.

The e-commerce giant also launched DeepFleet, a new AI model that optimizes robot coordination and promises 10% faster warehouse operations.

Amazon's automation journey began with its 2012 acquisition of Kiva Systems and shows no signs of slowing.

👉 Read more: Amazon deploys its 1 millionth robot, releases generative AI model

🤖 AI Tools Spotlight

🚀 Grammarly Acquires Superhuman: AI Productivity Power-Up!

Grammarly just acquired premium email client Superhuman to build the ultimate AI productivity suite. Superhuman CEO Rahul Vohra and 100+ employees are joining Grammarly, but don't worry – Superhuman will continue as a product!

🛠️ What Each Tool Does

Grammarly ✍️: Your AI writing assistant that fixes grammar, improves clarity, and enhances tone across all platforms. Explore Grammarly here.

Superhuman 🏎️: The Ferrari of email clients – saves 4 hours/week with lightning-fast AI email features. Explore Superhuman here.

Together, they aim to enable professionals to write smarter and send faster, layering Grammarly’s AI agents into Superhuman’s sleek interface.

🔗 Explore more on the deal here.

💭 Bi-Weekly Wisdom

"July is a blind date with summer."

— Hal Borland

🏢 About Us

KSMC is a Toronto-based boutique advisory firm founded by Big 4 alumni turned entrepreneur. We provide comprehensive M&A Advisory Services, strategic CFO Consulting, and tailored Accounting Solutions. Our expertise and network spans the complete transaction lifecycle—from financial due diligence (QoE reviews) and business valuations to full sell-side mandates—serving middle-market clients across industries in Canada, the US, UAE, India, Puerto Rico, and Botswana.

Know more and reach out to us here.

Disclaimer: This newsletter is provided for informational purposes only and does not constitute any form of advice. We do not have any sponsorship, affiliate, or commercial arrangements with any companies, tools, or services mentioned in this newsletter. All examples and case studies are based on publicly available information and are included for educational purposes only.