MM M&A 004: Due Diligence - Deep Clean and Hygiene
Middle Market Mergers and Acquisitions by Colonnade Advisors
Release Date: 07/21/2020
MM M&A - 028: Strategic Exit Planning for Equipment Leasing and Finance Companies
Middle Market Mergers and Acquisitions by Colonnade Advisors
In this episode, we discuss strategic steps for Equipment Leasing and Finance companies as they grow and evolve. The leadership of some of these businesses may decide to remain a certain size and complexity and be “ lifestyle businesses”, providing healthy cash flow to the owner(s) while they continue to run the business. However, other options exist, and exiting the business for a favorable multiple to a bank or other buyer can be an excellent strategy, the dream plan for many entrepreneurs. In this interview, we interview Bob Rinaldi and discuss the potential to grow and leverage a...
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MM M&A 027: Start Early & Exit Right with Mark Achler and Mert Iseri
Middle Market Mergers and Acquisitions by Colonnade Advisors
Before you sell your company, even the odds. This episode features guests Mark Achler and Mert Iseri, authors of the recent book, Exit Right: How to Sell Your Startup, Maximize Your Return and Build Your Legacy. Exit Right demystifies how to conclude the startup journey, a perfect complement to our podcast, which focuses more on the exits of larger middle-market companies. As Brad Feld states in the Foreword, “Mert and Mark set the roadmap for how entrepreneurs and business owners can proactively manage the process of getting to a successful exit along the way”. As Jeff says at the...
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MM M&A 026: Industry spotlight – F&I Agencies & Payment Plans
Middle Market Mergers and Acquisitions by Colonnade Advisors
This episode continues with our “industry spotlight series” where we focus on specific trends and opportunities in middle-market M&A transactions. Our previous episodes have covered four industries in which Colonnade has played a significant role as an M&A advisor to both buy-side and sell-side clients. We add F&I Agencies & Payment Plan Providers as industries where we deeply know the dynamics and players so as to provide exceptional service to clients who hire us to assist them in a transaction. Colonnade has studied the F&I Agencies and Payment Plan Provider...
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MM M&A 025: Datarooms - Get your Ducks in a Row
Middle Market Mergers and Acquisitions by Colonnade Advisors
In this episode, Gina Cocking and Jeff Guylay pick up their discussion around the due diligence process related to the sale of a company. This episode is a great add-on to the previously released four-episode series exploring the due diligence process: As we explore the organizational aspects of a due diligence data room, you’ll hear the reminiscing of both Gina and Jeff as they remember their days on Wall Street physically managing the data rooms of decades past when there were literally rooms full of documents that buyers would make appointments to review while the analysts...
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MM M&A 024: Minority Stakes – Read the Fine Print
Middle Market Mergers and Acquisitions by Colonnade Advisors
This episode is an excellent continuation of our discussion in about the pros and cons of partnering with a financial sponsor. When a company is considering an M&A transaction, there’s a range of alternatives. On one side of the spectrum, there’s selling 100% of the company and exiting. On the other side of the spectrum is no transaction at all (“stay the course”). In the middle are the options to sell various amounts of a company’s equity. When considering raising capital, more often, we see our clients sell a majority stake, in which an investor buys more than 50% of the...
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MM M&A 023: The Market is Hot - Is it Time to Sell?
Middle Market Mergers and Acquisitions by Colonnade Advisors
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MM M&A 022: Industry Spotlight – Home Warranty
Middle Market Mergers and Acquisitions by Colonnade Advisors
This episode continues our series of "industry spotlights," in which we focus on specific trends and opportunities in middle market M&A transactions.
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MM M&A 021: Industry Spotlight – Automotive Reconditioning
Middle Market Mergers and Acquisitions by Colonnade Advisors
This episode continues our series of "industry spotlights," in which we focus on specific trends and opportunities in middle market M&A transactions. This episode focuses on the automotive reconditioning industry, a $5.4 billion industry that is highly fragmented and ripe for consolidation. Colonnade has extensive transaction experience in the automotive services industry and has been the sell side or buy side M&A advisor on many of the automotive services industry transactions that have taken place over the last decade. Colonnade has insider-level mastery of the drivers of valuation,...
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MM M&A 020 - Indications of Interest and Letters of Intent: Narrowing the Field
Middle Market Mergers and Acquisitions by Colonnade Advisors
In previous episodes, Colonnade Advisors has outlined our unique 16-week sales process timeline in four phases: pre-marketing, go to market, management presentations/buyer due diligence, and exclusivity/documentation. In this episode, we will be doing a deep dive on indications of interest ("IOI"), which take place at the end of the go to market phase, and letters of intent ("LOI"), which take place at the end of the management presentations/buyer due diligence phase.
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MM M&A 019 - Industry Spotlight: Vehicle Service Contract Administrators
Middle Market Mergers and Acquisitions by Colonnade Advisors
This episode continues our series of "industry spotlights," in which we focus on specific trends and opportunities in middle market M&A transactions. This episode kicks off several episodes around the finance and insurance ("F&I") products industry, estimated at $80+ billion in size at the retail level. Specifically, this episode is all about vehicle service contract ("VSC") administrators. Colonnade has extensive transaction experience in the automotive F&I products industry and has been on the sell side or buy side M&A advisor on many of the significant F&I...
info_outlineDue diligence is a crucial component of any M&A transaction. In this episode, Gina Cocking and Jeff Guylay discuss the second topic in our due diligence series--legal due diligence. Jeff is joined by featured guest, Will Turner, a partner at Steptoe & Johnson, to discuss lessons learned and pitfalls that sellers can avoid as they think about getting ready to go to market, from a legal due diligence perspective. Later in the episode, Gina is joined by our second featured guest, Rob Humble, Senior Vice President of Strategy and Corporate Development at IAS, who shares his insights as a buyer on legal issues that arise in diligence. This episode is one of four on M&A due diligence. Episodes 003 focuses on business due diligence, and later episodes will focus on accounting and technology diligence.
Show Notes:
Jeff Guylay talks about legal due diligence being a sub-set of the broader due diligence process and recaps why diligence is conducted – to thoroughly understand the company to best position it in the market and to prepare the company for buyer and investor diligence (00.38)
Gina Cocking talks about the different legal groups involved in a transaction, including corporate M&A attorneys, corporate contract attorneys, employment attorneys, litigation attorneys, regulatory attorneys, and tax attorneys (02:29)
Jeff and Gina discuss the importance of hiring a good law firm in a transaction (03:34)
Gina outlines what the law firms are reviewing during diligence, including contracts, formation documents, shareholder documentation, employment agreements, applications and licenses (04:42)
Jeff comments that the legal diligence process is like a house cleaning exercise. There are instances in which licensees or ways of doing business historically may not make sense going forward (06:16)
Gina talks about the importance of having attorneys review materials years before going to market. It is good business hygiene (09:04)
Jeff discusses the role of a financial advisor in the legal review. Financial advisors are not attorneys but will coordinate the assembly of information, generally via massive Excel trackers, and ultimately securely disseminate information. Over a thousand documents are collected during typical legal diligence, and all get captured in an electronic data room (09:20)
Gina discusses the importance of having a good legal tracker (11:15)
Jeff talks about how litigation is inevitable in the corporate world and how keeping track of the details of each incident is important as it demonstrates transparency and organization (12:54)
Gina talks about how legal issues may impact company valuation (14:16)
Gina and Jeff discuss how a business that litigates aggressively might be perceived negatively as some people shy away from folks that are quick to sue (14:52)
Jeff discusses background checks (15:43)
Will Turner, a partner at Steptoe & Johnson, joins the show and talks about lessons learned or pitfalls that sellers can avoid as they think about getting ready to go to market from a legal due diligence perspective. One important concept is to provide all information upfront to avoid surprises. The second is identifying who within your management and employee group is a source for valuable information about the company and including them in the process if possible (17:40)
Rob Humble, Senior Vice President of Strategy and Corporate Development at IAS, joins the show to share his thoughts as a buyer on legal issues that arise in diligence. For Bob, a big concern is the trend in legal activities (21:21)
Rob talks about how an ongoing legal situation with financial implications could very well have an impact on valuation (21:48)
Gina’s closing thoughts on today's discussion on legal diligence: The three key takeaways are, 1) it is never too early to get your attorney involved to prep for diligence; 2) legal issues will not necessarily kill the deal, but should be addressed early; and 3) sellers need to know where the bodies are buried and need to discuss the issues with their advisors upfront (22:35)
Featured guests bio and contact information:
Rob Humble
Email: [email protected]
Rob Humble leads strategy and corporate development for IAS. Before coming to IAS, Rob held strategy and corporate development leadership roles with financial services firms NetSpend and Rent-A-Center. Prior to his time in financial services Rob held strategy, finance, and operations roles at Fortune 500 companies spanning the automotive, defense & aerospace, and chemical industries.
Rob earned his bachelor's degree in mechanical engineering from Washington U. in St. Louis, graduating magna cum laude. He also holds an MBA from Harvard Business School.
Rob lives in Austin, TX with his wife and two young kids. He enjoys hanging out with his family, distance running, binge-watching the hottest TV shows, watching Oklahoma Sooners football and indulging in random interests including knitting, furniture building, and home improvement.
Will Turner
Email: [email protected]
Will Turner has more than two decades of experience in corporate and securities law, primarily with application to cryptocurrency, fund formation, investment transactions, and mergers and acquisitions. He also advises clients on matters involving capitalizations, project finance, restructurings and joint ventures. Will is well-versed in securities offerings, '40 Act work, and corporate governance matters. He also advises clients on distribution, sales, technology and financial services commercial agreements.
Will has represented a number of European companies and investors in their acquisitions, investments, commercial, and regulatory matters in the United States. He has led numerous fund and joint venture formations.
About the Hosts:
Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private-equity backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc. Gina received her BA in Economics and an MBA from the University of Chicago.
Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm’s Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan’s Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University’s Kellogg Graduate School of Management and a Master of Engineering Management from the University’s McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth’s Thayer School of Engineering.
About the Show:
Get the insiders’ take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.