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Mergers & Acquisitions

John Wagner - working capital peg

Selling into an inflationary market

As always happens, we will cycle out of a down market and use the lessons learned to grow even more valuable companies in the future.
John Wagner - working capital peg

Parsing out deal elements as a percent of TEV

Buyers of LBM businesses are overwhelmingly private equity groups, and they think of deal elements (like senior debt, subordinate debt, seller’s notes, earn-outs, and escrows) as a percent of the total they pay for your company.
John Wagner - working capital peg

Congrats are in order! Your GPMs held steady!

A curious question has come up among some buyers we deal with who are acquiring LBM businesses.
John Wagner - working capital peg

Anatomy of a deal

There can be as many as four deal elements that make up an offer to acquire your company.
John Wagner - working capital peg

Five types of EBITDA

EBITDA is a term with a time-worn, clinical definition. It stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
John Wagner - working capital peg

Three types of acquirers

There are three general classes of buyers that might acquire your company: 1) A Strategic Buyer (strategic), 2) a pure Private Equity Group (PEG), 3) a Merchant’s Bank.
John Wagner - working capital peg

The value of a good CPA

Fact is, a good CPA is worth their weight in gold, and well worth the expense to retain one.
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.

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