Mergers & Acquisitions

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.
John Wagner - working capital peg

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 - working capital peg

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 - working capital peg

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 - working capital peg

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?
John Wagner - working capital peg

When is a deal priced?

Most companies seek acquisition when they are on an upward trend, putting up numbers each month that are higher than the previous month.
John Wagner - working capital peg

Don’t let the COVID-19 pandemic devalue your LBM business upon sale

For LBM companies that are now in the process of seeking acquisition—indeed for almost every company—the COVID-19 pandemic has suppressed sales revenues and resulting EBITDA.

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