Mergers & Acquisitions

If you work in M&A long enough, you’ll hear the term “good will” used to explain how deals are valued.

Our firm is a “sell-side” investment bank. We prepare and advise successful companies and take them to market for acquisition.

In every one of our LBM deals over the past two years, acquirers have used a “price effect” model to determine the sustainable EBITDA of the business.

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.

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

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

OPEX % is a key performance indicator, and every buyer analyzes it closely.

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

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.

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.