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Mergers & Acquisitions

John Wagner - earnout

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 - earnout

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 - earnout

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 - earnout

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

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 - earnout

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.
John Wagner - earnout

Never be the first to say the price

This is true whether someone is selling a pickup truck or multi-million-dollar lumber dealerships. The seller names a price, and it goes only down from there, never up.
John Wagner - earnout

Structure earnouts to the seller’s advantage

In most deals, the seller believes their company is worth more than the buyer wants to pay.
John Wagner - earnout

OPEX reductions may wipe out pandemic losses

The reduction of sales has seen a coincidental reduction in operating expenses (OPEX), as reduced operations demand less cash.
John Wagner - earnout

Take an acquirer’s view of your company

It's human nature to wonder how you stack up against competitors. Are you as profitable? How does your profit as a percent of sales revenues affect your company’s value?

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