Minority designated (ie. MBE or WBE) company

searcher profile

October 23, 2025

by a searcher from Columbia University in New York, NY, USA

Anyone successfully acquire a minority designated (ie. MBE or WBE) company? Are there good playbooks for the process as well as valuation? This is a case where we will lose the designations.
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Reply by a searcher
from Princeton University in Annandale, Clinton Township, NJ, USA
I acquired a WBE and lost the designation after closing. It has not been an issue post-closing. It seems to only be relevant for government contracting work. If your target business is primarily involved in government contracting, and that is the primary avenue for growth, you’ll want to dig into this during diligence. Certain contracts are only available for these types of entities, but many are open to all businesses, and simply default to lowest price.
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Reply by a lender
from University of Massachusetts at Amherst in Washington, DC, USA
This entirely depends on the type of business and the customer mix. In the Government Contracting world, this could very well spell doom if a large share of the contracts were awarded on the basis of the minority status/socioeconomic designation of the business. Just having the designation in and of itself is not necessarily a problem if you lose it after acquisition. I used to work in Government Contracting M&A and would see this often - plenty of instances where we turned the deal down because of the risk, but there were deals that got done despite the loss of the designation.
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