Mergers & Acquisitions

John Wagner - working capital peg

Beware of financial engineering

For successful, growing companies, there is simply no need to allow an acquirer to pay you with your own money.
John Wagner - working capital peg

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

Here’s how to credit COVID-19 losses to earnings when selling your company.
John Wagner - working capital peg

Revenue is not profit

In each and every deal we do, potential acquirers will want to know the revenues, sure, because that will show the orders of magnitude of the EBITDA.
John Wagner - working capital peg

Do you get a check for inventory at closing?

I can't tell you how many company sellers wrongly calculate the dollar value of inventory when they are tallying up their company’s worth.
John Wagner - working capital peg

Losing control during an earnout period

When there is a disagreement between an acquirer and a seller about the value of a company, yet determination to get the deal done, an earnout is often put in place.
John Wagner - working capital peg

Always shop the deal (almost always)

You never know who your buyer will be, and it’s imperative that—short of accepting a market-clearing price—you take the offering of your company as far and wide as possible.
John Wagner - working capital peg

Why companies sell for less, or don’t sell at all

Why don't companies sell getting top dollar, or sometimes not selling at all? Here are a few reasons.
John Wagner - working capital peg

Taming unrealistic valuation expectations

When selling at a time of strong growth, some owners want the valuation of their businesses pegged not where they are now with financial performance.
John Wagner - working capital peg

Why strategic investors pay more

What are the value implications of a strategic acquirer versus a non-strategic acquirer? It’s simple math.
John Wagner - working capital peg

Acquiring new leadership can ding your valuation

An acquisition is a natural time for leaders to cash out, but you should avoid acquiring new leadership in advance of a sale.

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