🌟 Hello, Reader

Welcome to Edition 31 of KSMC Double Klick, your bi-weekly briefing on M&A, finance, and AI innovation.

Let’s jump straight into the content.

Warm regards,
Kapil Sukhija
Founder, KSMC

📊 Deal Strategy Deep Dive

Buying the Carve-Out Inside a Multi-Business Owner

This scenario shows up constantly in lower mid-market e-commerce. An owner runs several businesses off one laptop and one bank login. An Amazon reselling brand is for sale. The rest of what the owner runs is not part of the deal. The books were never built with a sale in mind, and pulling the target out cleanly is largely a Quality of Earnings problem before it is a legal one.

Buyers get excited about steady FBA cash flow and a real brand with review history. What they are buying is often less clean than the numbers suggest, because the business does not exist on its own. It sits inside a bigger operation, and separating it is the real work of the deal.

The Practical Challenges Under The Hood

• Bank accounts, accounting records, and tax returns often combine all activities. Expenses and income are booked in one general ledger. Ad spend for Amazon and other online businesses flows through a single card. That makes it hard to see true margins, overhead, and working capital needs for the reseller business alone.

• People and systems are shared too. The same warehouse staff pack orders for multiple brands, the same bookkeeper closes every set of books, and the seller's supplier relationships get spread across everything they run rather than sitting with the business being sold.

• Amazon seller accounts and brand registry are governed by platform policies, not just contracts. Performance metrics, policy violations, and suspensions stick to accounts, and transfer or change of control is sensitive. Buyers cannot assume a simple “account handover” will be accepted or that historic risk will vanish on closing.

• Suppliers, aggregators, and even Amazon contacts may be tied to the founder personally. Many relationships are informal or based on years of trust rather than formal contracts.

• Tax exposures, customer claims, old disputes, or regulatory issues may belong to other business lines but still sit in the same legal entity. Equity buyers risk inheriting issues they did not underwrite.

Due Diligence Focus Areas

• Standalone financial reconstruction: Every shared cost line needs a real allocation methodology, not a percentage-of-revenue shortcut from the data room. This is where a proper QoE earns its keep, since the target's true standalone margin is rarely the number in the seller's summary deck.

• Account, IP, and contract ownership: Confirm whether the brand sits in its own Seller Central account and how brand registry rights would move. Get a clean list of every trademark and contract being assigned, since these are sometimes held personally by the seller, and confirm the seller can legally assign each one.

• People and related parties: Work out which staff are dedicated versus shared, and check whether the target has been buying inventory or services from the seller's other businesses at anything other than market pricing. Both often disappear at close, and the QoE needs to normalize for that.

Deal Structure Considerations

An asset purchase may be preferred here as it lets the buyer take the specific brand without inheriting liabilities sitting elsewhere in the seller's other businesses. A transition services agreement then covers the handover gap, giving the buyer defined access to shared bookkeeping, warehouse staff, or supplier relationships for a set period at a defined cost.

An equity purchase can be considered with strong separation covenants, but it carries higher risk and require tight SPA drafting.

An escrow tied to account and brand registry transfer is worth negotiating, since that process can be slow and the risk of delay should sit partly with the seller. A tailored non-compete matters more than usual too, and earnouts need to be structured tighter than in other deals.

Share Your Perspective: Recently considered a carve-out deal? Discuss with us the key areas peculiar to your transaction.

🌍 Global Pulse

High Bond Yields And The New Cost Of Capital

Long‑term government bond yields are sitting near their highest levels since the global financial crisis, and markets now treat these elevated ranges as the new normal rather than a temporary spike. Ten‑year US Treasuries have been trading around the mid‑4% range in 2026, with forward yields implying structurally higher rates for the coming decade, while Canadian and European benchmarks also sit well above 2010s averages. This reset in the risk‑free curve is reshaping the cost of capital for corporates, sponsors, and family offices.

For dealmakers, higher bond yields flow directly into discount rates, leverage capacity, and return expectations on M&A. Debt coupons on sponsored loans that were 4-5% in the near‑zero‑rate era are now closer to 7-9% when refinanced, compressing free cash flow and, in weaker credits, forcing sales, recaps, or covenant fixes. Credit spreads in the middle market remain functional but cautious; lenders are tightening underwriting, reducing leverage multiples, and demanding clearer visibility on cash generation before supporting new deals. The result is a selective, disciplined market where stretch valuations are rare and equity cheques are larger.

Strategic and financial buyers are responding by recalibrating hurdle rates, shortening payback expectations, and reserving scarce capital for high‑conviction transactions. In practice, that means: more emphasis on resilient cash flows, reduced appetite for aggressive multiple expansion, and stronger focus on integration plans that protect margin and working capital in a higher‑for‑longer environment.

For lower‑mid‑market founders and boards, understanding this new cost of capital is critical when setting valuation expectations, thinking about timing a sale, or considering partial liquidity events versus full exits.

🤖 AI Tools Spotlight

Meetily

Anyone who spends their day in back‑to‑back meetings knows the problem. You are listening, asking questions, and trying to build rapport, while also scribbling notes and hoping you don’t miss the key points. Traditional AI note‑taking tools help, but they are usually paid and send your meeting audio to their cloud - not ideal for confidential calls.

Meetily is a privacy‑first AI meeting assistant that acts as a private note‑taker for all your meetings. It records the call audio, writes out a full transcript of what was said, and then produces a clean summary at the end, including key decisions and action items. The entire process happens locally on your device, so sensitive conversations never leave your control.

Importantly, no visible “bot” joins your call, which avoids that awkward extra participant sitting in the corner of the screen and keeps client meetings feeling normal.

What The Tool Does?

• Records and transcribes your meetings in real time from Zoom, Teams, Meet, Webex and other platforms by listening to your system audio.

• Generates structured summaries of the discussion with one click, turning a long conversation into concise notes and follow‑ups.

• Processes live calls or existing recordings, so you can use it both while you are in the meeting and later on old files.

• Supports live dictation, letting you speak and see text appear as you go, helpful for solo reflections or quick voice notes.

Why It Matters

• Deal discussions, credit committee calls, board meetings, and client conversations often involve information that cannot be sent to external cloud services. Meetily’s local processing means that audio, transcripts and summaries stay with you, which is more aligned with strict privacy and compliance expectations.

• Instead of writing minutes after every call, you can lean on Meetily’s transcript and summary, edit for nuance, and drop the key points straight into IC memos, CRM notes, or follow‑up emails.

Download and explore the free community edition of the tool here.

💭 Dealmaker’s Quote

“I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too.”

- Steve Martin

🏢 About Us

KSMC is a boutique consulting firm founded by Big 4 alumni driven by an entrepreneurial and innovative vision. We provide comprehensive M&A Advisory Services; CFO Advisory; and Bookkeeping and Accounting Services. 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 US, Canada, UAE, UK, 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.