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Mergers & Acquisitions

John Wagner - working capital peg

Mind the spread between OPEX and EBITDA

A (hypothetical) Mr. Coyle started two identical lumber dealerships years ago in a thriving area of New England. When he retired, he gave one location to one son, named Mark, and one to another son, Chris.
John Wagner - working capital peg

Roll-up acquisitions: How they work

The term “roll-up” describes a financial engineering process used by private equity and strategic investors, where multiple smaller companies, typically in the same market sector, are acquired and merged.
John Wagner - working capital peg

How an acquisition’s working capital peg is calculated

As an acquisition closes, the investment banker representing the seller calculates the working capital peg.
John Wagner - working capital peg

Don’t take low acquisition offers personally

A neighborhood friend stormed into my house recently, fuming. He’d just put his house on the market and gotten a bid the very first day.
John Wagner - working capital peg

Creative earnout structures in the lumber and building materials industry

Even with the hot M&A market, where there is enduring support for strong acquisition values, buyers of LBM companies are not exactly splashing cash around like drunken sailors or newly elected presidents.
John Wagner - working capital peg

Already have a buyer? Why even use an investment banker?

Our investment bank will often get a call from a company that has just been approached by an acquirer.
John Wagner - working capital peg

How to pocket cash from your balance sheet in the sale of your company

In a debt-free/cash-free sale, you, the seller, must resolve any long-term debt out of the proceeds of the deal at the closing.
John Wagner - working capital peg

Time is the enemy in deal making

An acquirer spots your business, gets the deal book from your investment banker, and then—all of a sudden—there’s a rush of conference calls.
John Wagner - Acquisition offers

What explains the white-hot LBM M&A market?

There was already a steady low-boil of M&A activity in early 2020. But then, last November, fuel was thrown on the M&A bonfire.
John Wagner - working capital peg

Leveraging the seller

When you get an offer for your company, the first thing your eyes will jump to on the letter of intent is the TEV, the Total Enterprise Value, a.k.a. the amount that the buyer is offering for your business in sum total.

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