Deal Team Six - SoundSage

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Your hosts, Tammie Miller and Tim Oleszczuk, welcome you to another Deal Team Six podcast. Today, they address the difficulties an entrepreneur endures when it comes to funding and starting a business, and how incredibly attractive it can be when a large corporation or big competitor offers up capital. Let’s listen to the different possible scenarios!

[2:06] What is a Strategic Buyer? It is another company or potential acquirer in your industry, it can be a competitor, or someone doing something similar to your business.
[3:05] What happens if a larger business is interested in yours? If your company is struggling with capital and resources, it may seem like a great opportunity for a larger player to be part of your company.
[4:22] Why do big companies care about investing in smaller companies? Sometimes a bigger company shows interest in a smaller one due to its technology. An acquisition of a small company can be quicker than dealing with large company bureaucracy and red tape.
[7:11] What ways can a bigger company invest in your company that do not necessarily look like an investment? A specific customer arrangement could be one way (some companies can ask for exclusivity in a particular market or ask for the best pricing offered). Some companies can take a lot of your company’s manufacturing capacity, which in the long-term could really be a growth constraint.
[11:45] Tammie and Tim address the Right of First Refusal.
[14:50] How do you make it work with a large customer investment?
[17:05] If you are thinking about selling a part of your business to raise capital today, it can be very difficult to sell your business later when you are trying to exit. Make sure you structure those relationships correctly.

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Tammie Miller and Tim Oleszczuk, your hosts, welcome you to another episode of the Deal Team Six podcast. Today they talk about management presentations, those situations when you are starting to bring back prospective buyers, and they are getting to the next layer of a sale process. This is an excellent opportunity for them to listen to specific aspects of the company. During management presentations, the sellers get to know the potential buyers, which is a great time to ask questions. Tammie and Tim are disclosing the questions discussed in today’s episode in a blog post titled “Questions You Should Ask the PE Firm During Management Presentations.” Check out the blog at www.tkomiller.com/blog

[2:09] First Question - How often do you visit your portfolio companies?

[9:03] Second Question - How big is your fund? Where are you in its life cycle?

[13:22] Third Question - What are some things that a private equity group might offer to a portfolio company other than cash?

[16:48] Fourth Question - Are acquisitions part of the growth strategy?

[21:02] Fifth Question - Can I call the current or former CEOs of your other portfolio companies?

[22:58] Sixth Question - How do you typically finance your transactions?

[24:21] Seventh Question - Which tools do you have to compensate managers?

[26:15] Last Question - Do you charge a management fee?

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Tammie Miller, your host, welcomes you to another episode of the Deal Team Six podcast. In this episode, Tammie has conversations with two entrepreneurs/business owners about their experiences with Advisory Boards.

Today’s guests are Jarrod Lopiccolo, CEO and Co-Founder of Noble Studios, a creative digital performance marketing agency based in Reno, Nevada and Tom Nelson, President of Nelson Container Corporation, a privately held high-quality, full service, box manufacturer based in Germantown, Wisconsin.

(9:27) As an interesting aside, both Jarrod and Tom work with their wives in their companies. They share their secrets to successfully integrating family and work and knowing when to separate the two.
(15:24) What is the difference between an Advisory Board and a Board of Directors? An Advisory Board provides advice or insight but has no governing power or control and no fiduciary responsibility for shareholders or owners. Some companies have both an Advisory Board and a Board of Directors. Jarrod talks about how he decided to have an Advisory Board rather than a Board of Directors.
(19:03) Tom shares how he inherited an Advisory Board but later decided he needed to have his own.
(22:51) How do you best use your Advisory Board? Jarrod shares his three-problems method.
(30:33) Tom talks about the specific talents he was looking for when searching for members for his Advisory Board.
(33:00) What should the board composition look like? Jarrod shares his interesting perspective about it: “Never put a lawyer or an accountant on your advisory Board.”
(36:10) How do you ask people to be on your Advisory Board? Tom shares his experience when asking people to be part of his Advisory Board, which is usually met with curiosity and gratefulness.
(41:25) Jarrod shares his perspective on Term Limits (since an Advisory Board shouldn’t be thought of as a permanent commitment).
(47:01) The entrepreneurial life can be a little lonely. Advisory Boards provide both positive and negative feedback, which is greatly needed for entrepreneurs to keep on learning.
(52:23) What about entrepreneurs that dislike the idea of having an Advisory Board? Where should they go for guidance? If an entrepreneur does not like the vulnerability implied in having an Advisory Board, they could network; Tom explains this idea.

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Tammie Miller and Joe Froehlich, your hosts, welcome you to another episode of the Deal Team Six podcast. In today’s episode, Tammie and Joe discuss ways to think about real estate in your M&A transaction.

(1:41) Why a buyer may or may not want the real estate. Buyers can be interested in owning a business and its real estate if it is a central part of the strategy, if it is crucial for the business operation, or if there is a high cost of moving. Also owning real estate assures some predictability in the cost going forward in terms of growth and expansion.
(6:07) What happens when the business is not “tied” to the building and can be sold apart from the real estate? What is the benefit for the seller in this case? Most business owners want to sell the business and real estate together, but in some deals, the buyer does not want to own the real estate. Currently, valuations for real estate are considerably higher than valuations on businesses, which is a great opportunity to take advantage of that incremental value.
(11:42) Is it hard to engage in two different transactions (real estate and business)? It is definitely extra work but they do not have to be done simultaneously.
(13:00) What is the role of an investment banker when it comes to the sale of the real estate?
(14:30) Once the real estate is sold, what is the impact on the business sale from an EBITDA point of view? The earnings of the business will be reduced by the amount of the lease payment. This lease will have to be looked at carefully by the buyer of the business.
(20:22) What due diligence can you expect if the real estate remains with the business? The buyer is usually not interested in taking any liabilities pertaining to the real estate.
(23:23) CAPEX decisions: Should a seller make major capital expenditure purchases/changes/additions to our building prior to selling our business? This is a very common question. As a business owner, you have to continue to run the business as if you are going to own it forever, however, you don’t have to make substantial long-term decisions about the business when you are not going to be the beneficiary of them.

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Tammie Miller and Tim Oleszczuk, your hosts, welcome you to another episode of the Deal Team Sixpodcast. Today, they are diving deep into misfortunate events. Both Tammie and Tim have worked in M&A for more than two decades and they have experienced some strange behavior from their clients. Management presentations and dinners have proven to be very stressful moments. Listen to this episode to have a little fun and learn how to ease these crucial moments during a transaction

(2:15) What is a management presentation?
(3:59) What happens in a management dinner?
(5:44) Tammie presents examples of management presentation and dinner fails.
(12:47) Rule #1 for management presentations and dinners: Don’t be gross.
(17:43) Rule #2 for management presentations and dinners: Don’t be rude.

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Tammie Miller, your host, welcomes you to another episode of the Deal Team Six podcast. In this episode, Tammie is accompanied by Scott Wolf and Julia Papastavridis both from Willis Towers Watson, to talk about Rep & Warranty Insurance in M&A transactions, and specifically what sellers should know.

(2:04) What is Rep & Warranty insurance? How to use it and what are its benefits for both buyers and sellers.
(6:32) Why is it better to use insurance vs your new employees for indemnification?
(8:54) What exactly are we insuring?
(17:47) Can the underwriting jeopardize your transaction?
(19:24) What does underwriting entail from the seller and buyer's perspectives?
(25:12) What is the cost and who pays for it?
(42:08) If you are a seller, what does subrogation mean?
(50:13) Why Rep & Warranty insurance is completely different from normal insurance.
(51:18) How to choose the right broker.

If this topic interests you, check out these other resources:

Blog "An M&A advisor will scare away my buyer, complicate things, and cost me a lot of money. If you think any of these things — you're wrong"

Blog "An M&A Advisor Will Not Muddy Your Sale Transaction"

Blog "4 Experts to Turn to During a Business Sale"
eBook: Rep and Warranty Insurance for Small to Medium-sized Transactions

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Tammie Miller, your host, welcomes you to another episode of the Deal Team Six podcast. In this episode, Tammie is accompanied by Lynn Marsh, who is now the President at Road Widener and was formerly COO of a family-owned business that was involved in a sale transaction.

Lynn shares her experience working and contributing to the sale of a family-owned business being a non-family member; she dives deep into the pros and cons while sharing her lived experiences professionalizing and leading this company to success.

● (1:53) Lynn shares the pros of working in a family-owned business.
● (3:57) How did Lynn foster an environment that promoted success?
● (5:11) Lynn talks about what a strategic planning session looked like.
● (5:52) Lynn talks about how to handle the challenges of being a non-family member in a family-owned business.
● (8:17) Lynn talks about using “Behavioral Styles” instead of personality types.
● (10:05) Having a non-family member at a management level provides many opportunities for a family-owned business.
● (12:53) Lynn speaks about how the decision to sell the family business happened.
● (14:45) What happens when some family members are more attuned to the company’s mission and goals than others?
● (17:27) Lynn talks about her work professionalizing businesses.
● (22:07) Lynn shares her experience leading management presentations in the process of selling the business.
● (23:28) Lynn speaks about the process of selling the business.
○ (25:43) Selling a business is like accepting another full-time job. Organizing data is a top priority.
○ (27:47) Lynn talks about the emotional aspect of selling a family company.
● (32:35) How to keep the managing team invested in the company during the sale process.
● (35:40) Lynn talks about the organizational culture during the sale process.
● (36:52) If Lynn had to do it all over again, what would she do differently?

If this topic interests you, check out these other resources:
When Your Family Squabble Impacts Your Family Business
Quality of Earning Reports as Part of a Sale Transaction: The Who, The What and The Why
Communicating With Employees Once You’ve Sold Your Company

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Tammie Miller and Tim Oleszczuk, your hosts, welcome you to another episode of the Deal Team Six Podcast. Today they are accompanied by Brian Webb founder and CEO of Avontus Software and Ali Hajighafouri, Sales Director for Avontus, to talk about scaffolding, software, data, and technology.

Before Avontus, there was a lack of user-friendly software for scaffolding and formwork companies. Avontus saw an opportunity to vastly improve the way this market operates. Avontus now has offices in three continents to support over 4,000 end-users that rely on their software every day. Avontus’ software also manages scaffolding in about 80 percent of the refining capacity in the U.S., and the majority of the top 10 industrial scaffolding companies are using their software. As Avontus has grown and changed, they have always stayed true to their core belief in helping customers find the best solutions for their individual needs.

(2:00) Brian shares his background
(8:25) Brian talks about the beginning of Avontus
(12:40) Brian talks about his first customers
(13:43) The evolution of Avontus from offering a spreadsheet program for scaffold tracking and management to consulting and software
(19:00) Brian explains the matter of Avontus’ inventory
(22:07) Simple ways to track your inventory
(26:03) Brian talks about Avontus’ vision which is for a scaffolding company to have every software needed, except accounting
(28:52) Ali explains what 3D, 4D, and 5D technologies are about
(33:20) If you’re not keeping inventory, you’re losing inventory
(34:44) Ali talks about how to approach the slowdown after acquiring equipment
(36:58) Utilization in the scaffolding industry
(45:20) Ali talks about virtual and augmented reality
(53:15)The importance of visual communication from the earliest stages of the customer relationship
(56:28) Software is getting very specialized
(1:03:37) Scaffolding companies need technology for safety

If this topic interests you, check out these other resources:

Blog: 7 Things to Think About When Selling Your Scaffolding Business
Blog: 8 Things Buyers Look at When Buying a Scaffolding Company
Blog: Scaffolding Inventory Control

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In this episode of the podcast, Tammie Miller and Tim Oleszczuk, your hosts, are joined by Jim O’Rourke who is the former president and CEO of A&A Manufacturing. Jim sold to private equity and is sharing in this episode the details about this process, the pros and cons, and how he rolled equity as part of that transaction.

[1:28] Jim shares the main aspects of the transaction.
[3:18] Jim shares how they encountered a strategic buyer.
[4:01] Deciding to take the private equity road
[4:45] Jim shares the basics of the structure coming out of the deal.
- [5:22] Jim explains how his role changed, from prior to after the transaction.
[6:10] The deal was finalized in 2007 and in 2008 the economic crisis shook the financing world, Jim shares his experience during those times.
[9:10] Jim shares the particularities of his family business entering private equity.
[10:51] Jim talks about enjoying the interactions and the pressure created by transitioning to private equity.
[17:17] Jim shares why this was a very successful transaction for him.
[18:18] Jim extends his advice to anyone considering selling to private equity.
- [18:35] Go into the process with a really strong management team.
[19:00] Jim shares how he communicated to his management team that they were selling to private equity and talks about their reaction.
[20:54] Jim talks about how employees were introduced to the change of ownership.
[23:00] The process of selling a business is incredibly overwhelming on the management team.
[26:43] Jim gives his advice to those interested in co-investing as a previous owner.

If this topic interests you, check out these other resources:

eBook: The Second Bite of the Apple

Blog: “Rolling Equity in a Business Sale”

Blog: “If You Own a Business, You Need to Care About Private Equity”

Blog: “4 Advantages & Disadvantages of Remaining a Shareholder After an Acquisition”

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In this episode of the podcast, Tammie Miller, your host, is joined in-studio by Dustin Reynolds, Vice President of business development at Badgerland Disposal. Dustin is an accomplished entrepreneur and leader who focuses on developing talent, innovation, and creativity while streamlining operating efficiencies to decrease costs and promote organizational growth. He is energetic with a winning mentality that leads to results, success, and developing diverse teams to achieve exceptional results.

During this episode Tammie and Dustin discuss the following topics:

[1:03] Dustin shares how he got to the point in his career where he is today.
[2:45] Dustin talks about how he fell in love with the industry of waste disposal.
[3:47] Dustin embraced his entrepreneurial spirit.
[7:05] Dustin was surprised by the fast growth of his new business.
[9:43] Dustin shares the step-by-step progress of his business.
[12:58] How is Dustin differentiating his business from the competition?
[15:06] In order to grow you need to invest in your business and capital can be tricky to find
[17:47] Dustin shares how he sold part of his business.
[24:01] Now, Dustin acquires other businesses, and he explains how he positions himself with the seller
[28:22] Dustin shares how the buy-side looks like for him.
[32:18] How does Dustin deal with changing management and culture after acquiring a business?
[36:14] Dustin shares the proper way of recycling.
[41:50] Dustin talks about how his experience as a coach translated to his life as an entrepreneur and vice versa.

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In this episode of the podcast, Tammie Miller, your host, discusses transitioning family businesses to the next generation with guest, Paul Griepentrog. Paul is an Attorney, CPA, and Shareholder at Godfrey & Kahn in Milwaukee, WI. Paul has significant experience working with closely-held and family-owned businesses, with a particular focus on intergenerational business transfers.

In this episode, Tammie and Paul discuss the following topics:

[2:41] What happens when the senior generation is ready to retire but the next generation is not ready to take over?
[8:49] How long should the previous owner stick around?
[13:13] Issues with family dynamics when the business is transferred to one of several children.
[18:57] Cash vs. inheriting a business.
[20:11] Strategy to successfully transfer a family business.
[23:55] How to compensate a child that is not receiving equity in the business.
[27:11] What to do when there is not a “clear” successor.
[28:11] Tammie shares a “horror story” in a family business transfer.
[33:38] Paul shares an example of a successful intergenerational transfer.
[38:50] Who to call first when planning an intergenerational transfer.

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In this episode, Tim Oleszczuk, your host, interviews Marc Wilson, the former CEO of Safway Services. Under Marc’s leadership, Safway grew from a company with revenues of $50 million with 40 branches to one with over $950 million and 90 branches. In this episode of the podcast, Marc shares his vast experience in the scaffolding business, as well as how the industry has evolved over the past 30 years. Marc explains the differences between commercial and industrial scaffolding and talks about the necessary components for a successful scaffolding business considering integration as a fundamental aspect.

Introduction to Marc Wilson – Former CEO of Safway Services

2:13 The Evolution of Safway in the Scaffolding Business

3:50 Begins as a manufacturer
4:00 Starts to open branches
4:18 Starts to rent scaffolding
4:40 Adds erection and dismantle (E&D) of scaffolding
5:15 Expands into the industrial business

6:18 What is the Difference Between Commercial and Industrial Scaffolding?

12:10 Safway expands into multicraft services

13:36 Why was Safway successful at industrial scaffolding while others were not?

15:50 The importance of having the right scaffolding teams for success at growing capabilities

17:00 How Safway used branch compensation to create “ownership” by location

20:40 Scaffolding consolidation in the early 2000s

21:25 Private equity begins to look at the scaffolding industry

24:24 Safway does not sell but PE powerhouse CCMP/JP Morgan buys Brand and Lindsay Goldberg acquires Brock. Both decide to grow through acquisition.

28:08 The importance of standardizing equipment in company integration

29:05 Why financial buyers struggle with commercial scaffolding versus industrial scaffolding

32:27 Safway finally decides to sell in 2009 to Odyssey Investment Partners

37:33 Safway’s growth within the Odyssey portfolio

37:56 Acquisition of Atlantic Hoists in New York City changes Safway’s profile and hoists become an important product offering

43:32 Clayton Dubilier & Rice (CD&R) makes a big bet on scaffolding and acquires Brand. Soon after, adds Harsco/Patent. This was a very difficult combination

48:27 (CD&R) doubles down and pays close to $2 billion for Safway. Still looking to create the synergies expected after the Brand and Harsco acquisitions.

49:45 Let’s really think about integration for a scaffolding business – what does that mean?

52:25 The acquisition of Spider Staging. Did that make sense within the Brand Safway organization?

54:15 There continues to be challenges in the industry. At its core, does scaffolding make sense for financial buyers?

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In this episode, Tammie Miller discusses with Partners, Joe Froehlich and Tim Oleszczuk, the valuation impacts companies are seeing from COVID-19 and weighs those against the potential increases in Joe Biden's tax proposal.

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Deal Team Six: Recent Episodes

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