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Mergers & Acquisitions


Where are acquisition values holding?

In the LBM sector, the 10% Adjusted EBITDA margin is fairly common for companies that have a relatively small proportion of commodity lumber in their product mix.

Are you paying yourself FMV rent?

Most companies in the LBM sector have a separate LLC that owns the real estate where they have located their businesses.

Adjustments to EBITDA revisited

Readers of this column know that adjustments to EBITDA are one of my favorite topics.

Watch the spread between GPMs and OPEX %

OPEX % is a key performance indicator, and every buyer analyzes it closely.
John Wagner - working capital peg

‘10 and 10’ companies hold value in any market

Selling your business in an inflationary period doesn’t necessarily mean selling it at a discount.
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.

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