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Shownotes
In this Business Breakdown, David Barbato sits down with Teqnion's (TEQ.ST) CXO, Daniel Zhang.
Daniel Zhang is CXO at Teqnion, a Swedish serial acquirer of niche industrial businesses. He joined in 2020 after five years at Bain and now runs the company's M&A, speaking with three to five business owners a week.
In this episode, Daniel explains why Teqnion buys physical product companies rather than service businesses, how it pays around five times EBIT when the market pays closer to eight, and what the China sourcing office he set up has done to costs across the group. He also covers the operational problems that hit roughly ten subsidiaries, where that turnaround stands now, and how Teqnion's bonus structure penalizes managers when earnings fall.
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Chapters
Introduction
What makes Daniel tick
Finding Teqnion as a shareholder and joining Johan Steene
From a placeholder title to running M&A
Bain vs. Teqnion: strategy versus implementation
Why niche physical products over services
The ideal company: mission-critical components with service attached
Building the China sourcing office
What Teqnion actually sources from China
Winning over subsidiary CEOs and the savings realized so far
Could Teqnion acquire in China?
Buying from owners who are ready to retire
Why sellers accept less than the highest bid
Walking away on price
Funding acquisitions and the leverage target
Why subsidiaries carry no debt, unlike private equity
Deal sourcing: cold calls, brokers, and direct outreach
Where Teqnion's returns have come from
How serial acquirers fail
Where the turnaround stands now
Rising margins and what Teqnion buys next
The board's role and the mandate that unlocked M&A
Inside the incentive structure, including negative bonuses
CEO days, clusters, and sharing best practices
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