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Will cracks in the foundation disrupt a strong market?

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Best practices for sourcing deals

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A thoughtful approach to merging after the acquisition

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Winners are forged in the fire of economic duress

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Contents

President’s Letter

President’s letter

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Strong market disruption?

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Developing, executing buyside strategy

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ACG Cleveland: Another year of opportunity By JOHN W. GRABNER

Managing risks during an acquisition

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Private equity website best practices

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Managing expectations

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Secrets to M&A success

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Best practices for sourcing deals

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Preparing your family office for M&A

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The role of insurance

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Preparing your business for sale

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Neutralize deal killers

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Cybersecurity assessments

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Blockchain and M&A

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The value of IP

13

Minority recapitalizations

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Considerations for the next recession

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Merging after an acquisition

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Tax issues during a sale

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Distinguish yourself to win more deals

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From purchase price to cash

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Risks, benefits of a rollover

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Navigating the inevitable recession

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Robust valuations — for now

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Deal Maker Awards

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ACG Officers and Board of Directors

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Women and young professionals in ACG

21

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friend of mine who owned a manufacturing company with about 185 people approached me last year with thoughts of selling his company. He had spent his entire life focused on growing the company, so had no idea what to do when it came time to sell it. As you can imagine, there was a personal attachment, so getting the Grabner best advice was very important. Through ACG I was able to introduce him to:

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accounting firm that provided tax guidance and other advice surrounding the transaction ● A law firm that specialized in mergers and acquisitions ● An investment banking firm who could provide introductions to potential buyers ● A private equity firm with a focus in making acquisitions in his industry ● An insurance brokerage firm proficient in representation and warranty insurance products ● A commercial banker who could assist with the monetary aspects of the transaction ● A wealth management professional to develop a plan for himself and this family After selecting his team, a successful sale of his company was completed, which accomplished all the objectives he set forth when he made the decision. I don’t think I could have been nearly as helpful if it weren’t for my experience and involvement with ACG. My point is that ACG, the Association for Corporate Growth, is a network of 14,500 professionals and business leaders involved in middlemarket mergers and acquisitions.

With each year, ACG, and in particular the Cleveland chapter, improves by listening to its members and the business community. This year we have focused on three initiatives: YACG (Young ACG): Growing our membership to one of the largest in all of ACG. YACG is a platform for young professionals to develop their network and learn through the valuable event content. If you are in the early stages of your career, this is a place to get involved.

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Partnering: ACG Cleveland is strengthening its brand by part-

nering with other associations and organizations in Northeast Ohio. As a member of ACG Cleveland, you not only get to network with our 500-plus members, some events have been expanded to include other prominent groups as well.

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DealSource: DealSource, in only its second year, is a must-attend event exclusive for investment banking firms and private equity firms and is part of our Deal Maker Awards day. If you are in business, either professional services or industry, ACG is an association you should join and participate. You and your business will benefit from meeting some of the amazing people and organizations by being a member of this transformative and growing association. John W. Grabner is president of ACG Cleveland and business development leader vice president at Hylant. For more information about ACG Cleveland, visit www. ACGcleveland.org.

ABOUT ACG ACG is a global organization focused on driving middle-market growth. Its 14,500 members include professionals from private equity firms, corporations and lenders that invest in middle-market companies, as well as experts from law, accounting, investment banking and other firms that provide advisory services. Founded in 1954, ACG is a global organization with 59 chapters. Learn more at www.acg.org. ACG Cleveland serves professionals in Northeast Ohio and has 500 members. For more information, visit www.ACGcleveland.org.

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Will cracks in the foundation disrupt a strong market? A closer look at trends, expectations in M&A By ALBERT D. MELCHIORRE and DANIEL M. BOWMAN

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n 2019, we saw trends and results very similar to 2018. Average deal size and EV/EBITDA multiples remain high across industries and geographies, with median multiples in North America reaching doubledigits. While the value of transactions appears to be leveling, it continues to be a good time to be a seller. There Melchiorre is a supply and demand imbalance, as an increasing number of companies are looking to use M&A to bolster growth and eliminate competition. This has caused valuations and multiples to remain high, even as total transaction volume decreases. The number of buyers in the market has increased due to the large amount of capital available to be deployed. Debt financing costs remain low as the Federal Reserve has decided to lower interest rates in order to drive further business investments. Additionally, the amount of equity capital available remains near record numbers across both private equity and corporate balance sheets. According to Pitchbook

and S&P Capital IQ, U.S. private equity firms currently have more than $690 billion in cash available, and nonfinancial companies in the S&P 500 have over $1.5 trillion of cash on their balance sheets. The economy is on a solid footing, but we have started to see mixed signals in a few areas. First, the prolonged trade war is starting to impact business to a greater degree. The direct impact on businesses with crossBowman border operations and relationships is obvious, but we have also started to see a negative indirect impact as the uncertainty has led to more caution across peripheral players. Crossborder M&A activity with China has fallen to the lowest level in a decade after reaching highs in 2016 to 2018. Additionally, while bankruptcy filings are still low, according to the American Bankruptcy Institute, we have seen the first upward trend (3.2%) in 10 years on a trailing 12-month basis. This has led to an increase in distressed transactions in the market. In looking at transaction activity on a geographic basis, we have seen local activity trending in the opposite direction of total global activity.

According to S&P Capital IQ, the number of M&A transactions globally has decreased around 8.5% on a twelve-month basis, while the number has increased modestly in the U.S. and Northeast Ohio markets, 0.7% and 2%, respectively. Additionally, while average deal size has increased globally and nationally by 10.2% and 8.9%, deal sizes have decreased in the

local market by 1%. On a forward-looking basis, political uncertainty in the U.S. looms as the trade war continues, and a changing political landscape could significantly change the M&A market. Potential tax increases after the general election may entice business owners to consider a sale sooner than they would have in a stable environment.

Potential changes to the White House and Congress may also adversely impact the level of investment from foreign entities. Additionally, overall uncertainty may lead buyers to prioritize transactions in more stable industries and geographies. Despite these uncertainties, we expect the M&A market to remain strong in the coming year. Potential buyers have capital to expend and are fighting for a finite number of sellers. Competition is high across industries, and buyers are willing to pay high multiples to grow their businesses and participate in the overall economic growth in the U.S. Overall, we expect 2020 to be another great year for sellers. Al Melchiorre is president and founder of MelCap Partners and Dan Bowman is senior associate at MelCap Partners. Contact them at 330-239-1990 or at al@melcap.com.

Roetzel & Andress LPA Corporate M&A Team We’re dealmakers who are committed to meeting your objectives. We’ll get your deal across the finish line. Learn more at ralaw.com

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5 questions for developing, executing an effective buyside strategy BY JAMES IRWIN

will succeed only through blind luck.

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uccessful acquisitions do not happen without thought, planning and execution. Careful consideration of five key questions can help acquirers conduct buyside campaigns that deliver the intended results.

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Why are we pursuing acquisitions, and what do we want to achieve? The decision to pursue acquisitions can result from a build-up of excess cash, an offensive desire to grow and gain market share, a defensive need to protect the core business and markets, or any number of company-specific issues. Whatever the reason, the strategic rationale must be clear, and the criteria for what is being sought must be carefully determined. To define the specific criteria and strategic gaps to be pursued for fulfillment, owners and executive teams must methodically consider the specific products, services, technologies, markets, customers and geographies being sought and the financial profile that is expected, including revenue size and profitability metrics. An acquisition fix.pdf 11:55 search without clearly1defi11/4/19 ned objectives

With objectives defined, how do we identify and develop actionable options?

Successful acquirers develop a discrete and manageable list of target companies with attributes that potentially fulfill the strategic goals of the organization. Considerable effort must be invested to generate, research, refine Irwin and consultatively prioritize this list of targets. The vetted list needs to be sufficiently large so that the likelihood of finding an interested seller is high, while not providing so many targets that the strategic merits are only distantly aligned. Acquisition targeting is not about quantity, but rather quality. Once the target list is determined, outreach to each identified company can begin with the goal of creating an active dialogue with each target’s key decision-makers and positioning the interested party as the “buyer of choice.” This process takes time, and it is not uncommon for multiple approaches over AM weeks/months/years to be required be-

fore a seller is ready to engage with a buyer. Sellers may only respond to initial advances in a guarded manner due to competitive worries. Building rapport with a target is paramount to success, as barriers must be reduced to extract sufficient information to determine whether additional time should be invested to further pursue each target.

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Just because we’ve found an actionable target ready to engage in sale discussions, are the deal terms proper? Finding an actionable target is wonderful, but the true strategic fit and specific transaction deal terms will dictate success or failure in the long run. Time, money and organizational resources must be committed to thoroughly assess the target and accurately make this determination. While most buyers focus primarily on valuation and minimizing purchase price, this is only one component of longterm success. Effective due diligence must be performed by a committed team of subject matter experts accurately assessing alignment against organizational objectives, business operations and cultural fit, versus providing a “rubber-

stamp approval” simply to move a target forward. Utilizing diligence findings to support negotiation of a market-based purchase agreement provides protection that value is not “lost” through the final transaction terms.

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Are we ready for integration upon deal closing?

The outcome of integration determines the absolute success or failure of any given transaction. Successful integration processes ensure that organizational alignment occurs, cultures are meshed, synergies are achieved and operational excellence continues. Integration objectives are typically best achieved through a thoughtful and interactive idea exchange between both buyer and seller. Best practices can be shared among organizations in a collaborative style that builds mutual trust versus a heavy-handed “we do it this way, and only this way” approach.

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Was the acquisition ultimately successful?

Upon reaching the one-year anniversary of each acquisition, a thorough postmortem regarding the transaction must be completed with intellectual honesty and fact-based data. Is the deal achiev-

ing its intended goals? Is it performing consistent with the forecast performance at time of acquisition? Were expected synergies achieved? What surprises emerged? If starting over on this target, what would be done differently in the evaluation and negotiation phase? The answers to these questions provide a road map of best practices for future acquisitions. Considering and utilizing these five key questions will establish a company as a best-in-class acquirer with successful buyside search, acquisition and integration as recognized core competencies. Involving strategic advisers early in the process with experience in the successful execution of M&A programs can be extremely beneficial for companies embarking upon these pursuits for the very first time or lacking a deep corporate development department. In particular, buyside-focused M&A advisory professionals provide leverage, velocity and continuity for a sustainable acquisition outreach program. James Irwin is managing director at Citizens Capital Markets Inc. Contact him at james.m.irwin@citizensbank.com.

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A deft acquisition plan involves identifying and managing risks BY NEIL J. WHITFORD

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ary Cohn, who recently served as the director of the National Economic Council, issued the following caution: “If you don’t invest in risk management, it doesn’t matter what business you’re in, it’s a risky business.” The same can be said of mergers and acquisitions. The surest way to stumble with M&A is to fail to identify and manage the related risks. An acquisition entails business, operating, financial, tax and legal risks. Business risks may include overvaluation/overpayment for the target company and potential postclosing customer losses. There may be operational risks, including a failure to achieve anticipated synergies or difficulties with the business integration. Financial risks may include deficient financial records and processes at the target company, inventory valuation issues and the potential incurrence of excessive debt to finance the deal. Depending on the structure of the transaction, there also may be material tax risks, such as the target company’s failure to file tax returns, invalid tax elections or noncompliance with state and local tax laws. A business acquisition also raises a host of legal issues. One of the biggest M&A legal risks is noncompliance by the target company with applicable laws. There may be noncompliance with employment laws — such as nondiscrimination laws and wage and hour regulations — environmental laws, anti-corruption or statutes like the Foreign Corrupt Practices Act or cybersecurity and privacy regulations. If the target business includes international operations, the risks relating to legal noncompliance will likely be greater. Other laws may impact the transaction itself and require special notices, filings or approvals, such as a filing under the Hart-Scott-Rodino Act, environmental notice requirements, or notification or payment obligations triggered by recent or anticipated post-closing workforce reductions. A second area of M&A legal risk relates to historical or pending litigation. For example, does the target business have a history of employment-related claims, or has it had any material disputes with key customers, suppliers or other business partners? Has anyone asserted a claim of intellectual property infringement against the target? Do any products sold by the target pose a high risk of product liability claims? Another potential risk relates to the target company’s material contracts, which generally are assumed by the buyer as part of the deal. Those contracts may contain commercially unreasonable terms or require third-party consents in order to complete the transaction. The contracts may impede the buyer’s plans to integrate the target into another business, or may restrict the buyer from engaging in certain business lines

Crains-ACG section-2020-Final.indd 5

after the closing. The best way to identify material M&A risks is through a thorough due diligence review of the target. Due diligence is the buyer’s Whitford investigation of the target’s business, financial, tax and legal affairs. Due diligence helps the buyer to identify material risks and liabilities and

to reveal any impediments to, or hidden costs of, the transaction. Depending on the nature of the acquisition, due diligence may include a deep-dive review of certain risks, such as a quality of earnings analysis by an accounting firm, a customer/market study, an environmental audit, a detailed review of the company’s employee benefit plans and background checks on key personnel. A buyer has the ability to miti-

gate M&A legal risk through the transaction’s structure. Sometimes, the structure of a deal is dictated by tax-related considerations, regulatory requirements or by material contracts to which the target is subject. However, if there is flexibility as to transaction structure, the buyer can significantly decrease its exposure by purchasing the assets of the business rather than purchasing the stock

or other equity interests of the target company. An asset purchase, unlike an equity purchase, allows the buyer to assume only certain liabilities that are specifically identified in the purchase agreement, such as stated balance sheet liabilities and post-closing performance obligations under listed contracts, while leaving behind all of the target’s other liabilities. CONTINUED ON NEXT PAGE

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Growth&M&A

Private equity website best practices

continued from previous page

Another way to decrease M&A risk is through the terms of the purchase or merger agreement. Representations, warranties and covenants made by the seller(s) in that agreement, together with the related indemnification provisions, generally offer a buyer the ability to recoup a portion of the purchase price if the target business proves to be not “as advertised.” An increasingly common way for a buyer to decrease M&A risk is through a representation and warranty insurance policy, which supplements the protection given to the buyer under the purchase agreement. Essentially, the insurer stands behind most of the representations and warranties being made by the seller(s), subject to a policy limit and a retention amount/ deductible. In today’s market, I often see a policy limit equal to 10% of the target’s enterprise value and a retention amount equal to 1% of the enterprise value. If a buyer assembles an experienced deal team and develops and executes on a thoughtful acquisition plan, it can greatly reduce its M&A risk. Neil J. Whitford is a partner in the Corporate and Capital Markets practice group at Calfee, Halter & Griswold LLP and is co-leader of Calfee’s Mergers & Acquisitions team. He can be reached at 216-622-8422 or nwhitford@calfee.com.

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ore than 8,000 companies are already backed by private equity, while $1.7 trillion sits on the sidelines, making for fierce competition for quality deals among private equity firms. If you want to identify the winners in this battle, look to those that are implementing strategic marketing initiatives, including these website best practices. Winners differentiate. For example, ABC Capital is a private equity firm that partners with management to accelerate growth at middle-market manufacturing and distribution com-

panies. Sound familiar? Too many websites describe firms this way. Winning firms, however, relay their value proposition with a clearly deKostka fined, differentiated position. They do it by tightening their target market focus or branding their growth methodologies. It ain’t bragging if true. Too often, private equity firms simply issue a news release announcing an exit and then deposit any reference to it in their website’s “former portfolio company” section. Winners do more. Their web-

sites celebrate stories on how capital infusions changed company trajectories, and they complement these with examples of how their expertise accelerated the benefits of the capital. Champions go further and provide video testimonials from management. Capitalize on marketing automation. Winners rely on tools like Hubspot, SharpSpring and Marketo to automate marketing tasks, such as distributing emails and social media content, enabling them to stay top of mind with prospects and deal sources. These tools also centralize digital analytics so firms can determine which online campaigns are effective.

Optimize for search. These tactics only matter if prospects can find a firm’s website. Winners leverage key search terms, like “growth equity,” into backend coding and frontend content to heighten search engine attention. One litmus test for judging which private equity firms will generate quality deal flow is their website, as winners demonstrate a command for strategy. For a free website assessment, visit roopco.com/web-analysis. Brad Kostka is president of Roop & Co. Contact him at 216-902-3800 or bkostka@roopco.com.

Managing expectations in a high valuation environment By MATT ROBERTS

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ccording to a recent Pitchbook report, buyout multiples remain above 12x EBITDA on a median basis in the U.S., with the report suggesting that we may be in a new norm. While overall multiples have been high, it’s important to understand that some deals will warrant a high valuation while others may not and how industry, market and company-specific dynamics affect value. An owner’s expectations are best set when there is a well-defined plan in place.

That plan starts with the owner understanding what their business is worth, as well as working with a wealth advisor to define what a post-transaction fiRoberts nancial life might look like. If a sale occurs, the wealth advisor can help to determine if the proceeds from the sale can support the owner’s retirement goals. When determining the value of the business, an owner should look internally at: the quality of finan-

cial reports and processes; the current state of operations; constraints in the business; customer dynamics; financial performance and management; and employee capabilities. Some external factors to consider when valuing a business are cyclicality risk, ongoing capital expenditure needs, overall growth potential of the industry, public market multiples, recent relevant M&A transactions multiples, attractiveness to outside investors and willingness of banks to lend into the space. Once a seller has an understanding of their business’ value today, it’s impor-

tant for an owner to consider whether or not they sell now or if they need to take time to improve certain aspects of the business that will increase value at a later point. By doing so, an owner can cut through the noise currently in the market and understand an appropriate valuation range for their business and how to go about maximizing that value. Matt Roberts is vice president of Copper Run. Contact him at 440-787-4694 or mroberts@ copperruncap.com.

TMA Ohio Chapter announces 2019 Lifetime Achievement Award winner!

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Seven secrets to M&A success BY BRANDON FREDERICKS AND RANDY MISCH

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he Quality of Earnings component of the due diligence process is often overlooked, but that oversight could cost you money — or worse, the deal. So, where is the value in QofE? What makes a QofE “best in class”? Here are seven ways to explain the benefits of the QofE process. 1. It’s a QofE, not an audit. Where a traditional audit focuses on balances and prior transactions, a QofE is fo-

cused on the economic earning power on a go-forward basis to maximize the dollar.

low focus on how the earnings are being realized and whether they are in line with accepted practices.

2. Defining “quality” in QofE. Not all earnings are created Fredericks equal. Identifying those opportunities that will generate the most significant return well after the deal is closed should always be the target.

4. Working capital is worth a look. Although it is sometimes overlooked (or not part of the scope), best-in-practice QofE rules would highly encourage scrutiny of the working capital.

3. Laser focus on earning capabilities. Sound expertise will al-

5. Keen eye on adjustments. Any deal is bound to have adjustments

Misch

Best practices for sourcing deals BY KELLIE WORK

W

ith the amount of dry powder out there and the number of private equity firms increasing, the questions facing private equity professionals are: How do you differentiate your firm, how do you make sure you are in front of the right people at the right time, and how does this translate into a solid deal sourcing strategy? Before discussing best practices, the

January January20, 20, 2020 2020 S7

most important starting point is to define what differentiates your firm. What makes it unique and stand out? When you walk away from a meeting, what key Work element should stick with the individual and give them a reason to think of you for a future opportunity? Once you have your differentiator, there are several best practices that

can help with sourcing. First, delivery of your message should be done at multiple levels and channels including newsletters, email blasts, social media campaigns, phone calls and the most effective way — in-person meetings. These meetings can be at industry conferences, ACG events or direct calling in target markets. They are the best way to build a personal connection, convey interest, explain your investment criteria and differentiator.

— due diligence, buyer, seller and pro forma adjustments. Allowing the QofE team to evaluate this independently can bring some peace of mind to a sometimes confusing and complex process. 6. Robust risk evaluation. Professionals with a sound understanding of financial statements and the risk they present to their respective companies, their stakeholders and their industries can bring a value-added layer to QofE. 7. Custom-built procedures. The advantage of QofE is that no two QofE are alike. The goal is to assess whether the specialized procedures would proNext, use your network. The people around you can be an important asset for sourcing or securing meetings. Don’t be afraid to reach out and ask for help, especially if your contact has an established relationship with the company. Deals can come from almost anywhere, so letting your full network know what you’re looking for can help. Lastly, follow up. One important practice that is often missed is the follow up. Just because you have had a meeting with someone, you still need to follow up to reinforce the discussion. Everyone is inundated with new ideas

vide the needed level of value for the deal to close. Experienced M&A teams take pride in learning of the needs and issues of every deal and can help facilitate an unmatched value proposition. Brandon Fredericks, CPA, is senior manager at Apple Growth Partners. Contact him at 216-674-3737 or bfredericks@applegrowth.com. Randy Misch, CPA, is Cleveland managing partner and principal at Apple Growth Partners. Contact him at 216-674-3754 or rmisch@ applegrowth.com.

and other firms trying to convey their message. If you aren’t consistently in front of your network, you will be out of sight and out of mind. With all of the competition, it’s important to employ a sourcing strategy that includes these elements as well as being creative, flexible and persistent. Don’t forget to have fun, in whatever method you choose. See you out there. Kellie Work is vice president of business development at CapitalWorks LLC. Contact her at kwork@capitalworks.net.

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t continues to be a seller’s market with respect to merger and acquisition activity in most industries, which means it is not unusual for multiple buyers to compete to acquire a selling company. This can put unprepared family offices interested in purchasing a business on the losing end of a competitive bid process. To win these bids, family offices should seek to capitalize on their unique position in the marketplace by highlighting how they are different from other potential buyer groups such as private equity or strategic buyers that seek to fold the target business into an existing business within the same or similar industry. As one can imagine, the purchase price is typically the main consideration when a seller evaluates multiple bids from potential buyers, but many sellers also focus on factors such as speed to close and the buyer’s culture.

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Given the competitive M&A landscape, sellers often run a competitive bid process through an investment banker to maximize the value received by sellers at the closing of a sale transaction. A competitive purchase price is almost always the barrier to enter a subsequent round of the bid process. Offering the highest purchase price will usually lead to exclusive negotiation rights to acquire the business and hopefully a closing on the purchase of the business. Family offices should be prepared to “pay to play” and offer a purchase price that is competitive with private equity and strategic buyers. Since a family office often has multiple investments through various investment vehicles, it potentially allows a purchased business a longer timeframe within which to achieve success. Family offices should evaluate any new acquisitions in the context of its current portfolio and the projected time it will take to make any newly acquired business successful. It may be the case that initial losses from a newly acquired business could offset the gains of other investments.

Demonstrate speed to close

An M&A strategy within the family office allows for diversity in the portfolio and encourages various family members to be involved. However, it is important that M&A activity is conducted in a thoughtful manner that aligns with the family’s goals, but also with a commitment to speed. Just as a private equity fund carefully determines its acquisitions, the same must occur within the family office. Strong leadership within the family office is important when developing an overall plan for acquisitions. This plan can include setting up an investment committee of involved fam-

ily members to facilitate quick and standardized methods to responding to acquisition opportunities and putting together a consistent team of advisors such as an attorContini ney, wealth manager, accountant and insurance broker so that the family office can quickly seek professional guidance. Putting these processes in place could allow a Wensink family office to be more nimble in its decision making as compared to larger competitors in private equity or the bureaucracy that is often seen with a strategic buyer.

Focus on your culture

Oftentimes, the wealth held in a family office was originally generated by one or more closely held businesses. This may result in a family office having multiple generations of family members involved in the business with different skillsets. Family offices can focus on their diverse professional cultures when describing the expertise of their team and demonstrate a clear succession plan. It is not unusual for the owners of a target company to remain with the business after the closing or have their own daughters and sons running integral pieces of the target company. A family office environment may be attractive to selling owners because they see a cultural fit where they can still have that feeling of working for the success of a family enterprise. A family office will not have the same pressure as a private equity fund to sell the business again within three to seven years to achieve a return for their investors. Owners and second generation leadership can feel more confident that the business will have time to grow in a more stable leadership environment. A family office seeking to win the M&A game, however, should not lose sight of its ultimate purpose. It should seek to integrate the M&A goals with the larger goal of transitioning leadership in the management of wealth generated by the family office to the next generation. As the family diversifies into different businesses, younger family members can devote their time and expertise to develop any newly acquired business and gain key skills that will enable them to continue to grow and manage the wealth of the family. Christal Contini is a member and cochair of the Mergers and Acquisitions Practice Group at McDonald Hopkins LLC. Contact her at 216-430-2020 or ccontini@mcdonaldhopkins.com. Katherine Wensink is a member in the Tax & Benefits Department at McDonald Hopkins LLC. Contact her at 216-348-5729 or kwensink@ mcdonaldhopkins.com.

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Insurance a key player in driving desired deal outcome BY KYLE ANTHONY

I

nsurance is like a solid defensive game plan. It’s needed to win championships, but can often receive the least amount of attention unless something goes wrong. What if you could change the narrative and leverage insurance to drive results on behalf of your private equity team? It would require a clear game plan with the ability to demonstrate a proven track record that not only protects against risk — but predictably manages an ongoing process on behalf of both your fund and portfolio companies. 1. The best diligence goes beyond risk to identify and quantify value creation opportunity. Solid deal decisions require a clear understanding of the risks surrounding insurance, human capital and compliance. With comprehensive diligence, insurance and risk management teams bring clarity to complexities and risks of an investment by developing a comprehensive, datadriven, actionable assessment. Superior deal outcomes are achieved when opportunities to create value are identified pre-close. This critical first step requires turning a spotlight on underper-

forming insurance and total reward strategies. Quantifying the potential outcome of correcting these underperforming strategies provides the financial Anthony sponsor and portfolio company an opportunity to prioritize initiatives and create a targeted end state – or financial aspiration for the future. Risk management and human capital teams support both financial sponsor and portfolio company alignment. For example, Oswald recently worked on behalf of a portfolio company to help identify cost savings opportunities, potential compliance deficiencies and opportunities for the company’s 401(k) plan without adding cost. Based on 401(k)data requested, including fee disclosures and the current investment line-up, Oswald projected a $50,000 fee reduction on the current $15 million plan. The portfolio company’s process and time investment was minimal. Fee disclosures from all parties were secured, and a comprehensive benchmarking analysis on fees was developed. Through this approach, the portfolio company closed compliance gaps, increased employee engagement with the

benefit and secured a $50,000 reduction in plan cost without changing vendors. 2. Put a spotlight on the business and identify potential pathways to improve. Driving operational value creation may require creative or disruptive approaches to the risk and human capital management strategy. A comprehensive evaluation should examine a long-term proforma to illustrate a complete spectrum of strategies. From discrete, incremental program changes to a more radical program overhaul, an effective strategic plan allows companies to fully evaluate potential opportunities without disregarding them due to historical bias or barriers to execution. Insurance providers can help provide companies with greater choice and control to select from various prescriptive pathways. 3. Stay laser-focused on key initiatives. New and emerging risks along with a tight labor market and multi-generational workforce make it pretty easy to get distracted and overwhelmed in today’s complex business environment.

Key initiatives enhance the leadership team’s ability to remain focused on the risk management and human capital initiatives that matter most. It takes a unique approach to drive operational value while enabling the leadership team to remain focused on running the business. We recently worked with a middle-market portfolio company that had been acquired, with plans to grow quickly. The company was struggling to manage its existing human resource information, time and attendance oversight, growing FLSA concerns and complex payroll structure. The chief human resource officer knew the company likely would face issues from both an operational and compliance standpoint due to the expansion. We assessed the company’s current systems and helped identify an opportunity to migrate to an updated platform solution that ultimately helped the portfolio company reduce its human resource information system budget by more than $400,000. 4. Integrate action plans and monitor processes for effective execution. A recent study conducted by Maine Point, a leading operations consultancy,

found a majority of executives in the industry are worried about the execution of private equity-driven roadmaps and action plans. Insurance and risk management teams can help support day-to-day execution and monitor key performance indicators such as Total Cost of Risk and Total Compensation and Reward as a percentage of total revenue. Successful outcomes across risk management and human capital key initiatives can be predictably achieved when the leadership teams (1) establish a tactical plan that identifies the timetable and responsibilities of various stakeholders and (2) define a series of data points that will be used to track progress and success. 5. Identify opportunity, drive results and maximize value. From identification of liabilities and gaps to resolving compliance concerns and driving results, insurance and risk management teams can help private equity funds drive significant enterprise value and achieve superior operational results. Kyle Anthony is director of the Strategic Accounts Group at Oswald Companies. Contact him at kanthony@ oswaldcompanies.com.

McCARTHY LEBIT CRYSTAL LIFFMAN EXPECT MORE. GET MORE. 216-696-1422 McCarthyLebit.com

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Sell-side strategies: preparing your business for sale

GROWTH MARKETING FOR PRIVATE EQUITY

BY STEVE C. SWANN

T

here are a myriad of diligence issues that can adversely impact purchase price and sometimes kill the deal. While there is no absolute on completely avoiding these issues, there are several areas owners should consider as they evaluate selling their business.

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1. Sell-side representatives. Most business owners are far from experts at selling a company. Build a strong transaction team, which may include a banker, an attorney and tax professionals to help navigate the sale process and generate the highest possible return on the transaction. 2. Accounting v. economic earnings. GAAP earnings from audited financial statements don’t accurately represent economic earnings. Look back at least three years to develop a normalized picture of earnings while also considering other potential accrual versus cash earnings adjustments.

DEAL SOURCING

3. Depth of management team. If there is not much depth in the management team, build a capable, diverse team to ensure the transition and future success of the business.

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TMA Ohio Chapter announces 2019 Turnaround/Transaction of the Year winners!

4. Customer and products. Concentrations of revenue and profit with a small number of customers or products can negatively affect valuation. Diversify your customer base and consider

E

We are proud of the achievements of these TMA members and celebrate their specific accomplishments with this year’s award. To the winners, thank you for your hard work and contributions in the turnaround field. Turnaround Management-Transaction.indd 1

Crains-ACG section-2020-Final.indd 10

5. Vendors. As with customers, you’ll want to reduce concentrations of material or Swann services with one vendor or sole-sourced product sourcing and diversify. 6. Excess net working capital. Excess NWC can be difficult to argue for additional purchase price. Start by improving receivable collections, managing down inventories and maximizing vendor payment terms at least 12 months prior to the sale. Then the seller can convert excess NWC into cash ahead of the sale. 7. Tax issues. Tax professionals can help identify potential exposures ahead of the deal and properly posture issues with buyers. Examples include valuation of net operating loss, accelerated tax-basis depreciation, inappropriate deductions/expenses and verifying income and tax compliance practices. Ideally, sellers should begin to address and mitigate these common diligence issues years in advance of going to market. Steve C. Swann, CPA/ABV, CFE, is a partner of Transaction Advisory Services at Bober Markey Fedorovich. Contact him at 330-255-2417 or sswann@bmfcpa.com.

Neutralize deal killers through early planning BY MICHAEL W. SCHAUER

The Ohio Chapter of the Turnaround Management Association congratulates the winners of the 2019 Turnaround/ Transactions of the Year Award (pictured from left to right with the chapter president): Sheldon Stone (Amherst Partners), Stacey Alatis (AloStar), Dan DeMarco (TMA Ohio Chapter President), Brian Phillips (Amherst Partners) and James Morden (Amherst Partners). Not pictured: Don Luciani (Amherst Partners)

expanding into new product offerings.

veryday errors and oversights can turn into deal killers when subjected to the pressure and timeline of a closing. Identifying and mitigating deal killers requires early planning and objective evaluation of a company’s value proposition. The earlier this review occurs, the better. Deal killers often reside in the very things that make a company appealing to a buyer. A seller’s familiarity with the target allows her or him to value different components of the business, from customer goodwill to branding. Careful early analysis of the components of a company’s value narrows the hiding places for potential deal killers and allows for more efficient review and subsequent mitigation efforts when problems are found. If the seller attributes value to revenue and profitability, the buyer will want to review the target’s top vendors and customers and contracts with them. If the seller attributes significant value to intellectual property, the buyer will want to understand what efforts the seller has taken to protect that intellectual property, such as non-disclosure agreements, pat-

ents, limiting access to trade secrets and employee invention assignments. Gathering and reviewing these materials early on (or identifying their abSchauer sence) allows a seller to evaluate and remedy any gaps without the pressure of due diligence and closing. Buyers expect the sellers to justify a company’s value and will focus on the seller’s evidence of that value, as well as industry-specific concerns such as government regulation and data security. Sellers of closely held companies frequently overlook deal killers, sometimes due to a lack of objectivity and sometimes because they don’t see the need to engage professionals in the early stages of the sale. Those behaviors lead to unnecessary expense and allow deal killers to escape detection. Avoid these costs and deal killers through early planning and objective discussion. Michael W. Schauer is an associate at Schneider Smeltz Spieth Bell LLP. Contact him at mschauer@sssb-law. com.

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Cybersecurity assessment an essential part of due diligence BY MICHAEL D. MAKOFSKY

W

hether you are a buyer or a seller, due diligence is a critical part of any M&A transaction. Among other things, due diligence can uncover risks and vulnerabilities. Of all the potential issues associated with a business, cybersecurity must now be considered one of the most important. Cyberattacks, data breaches and other malicious hacks have become more prevalent and more sophisticated. Such Makofsky invasions can be very expensive to work through or could cripple a business. Further, threats and vulnerabilities can remain undetected for a long period of time. An acquiring entity may not discover the issue until after the closing. By then, the damage may be catastrophic. That’s why it is crucial to conduct a thorough cybersecurity assessment during due diligence.

‘‘

What are the operational needs and expenses going forward?

with a successful transaction.

Through proper due diligence, buyers can identify and understand the state of a company’s cybersecurity, assess risks in advance and take proactive measures to help

Michael D. Makofsky is principal at McCarthy, Lebit, Crystal & Liffman Co. LPA. Contact him at 216-696-1422 or mdm@ mccarthylebit.com.

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Through proper due diligence, buyers can identify and understand the state of a company’s cybersecurity, assess risks in advance and take proactive measures to help with a successful transaction.

‘‘

Buyers should develop a cybersecurity checklist for potential targets. This should include not only an analysis of current status, but also of integration — how to meld two different systems into one company-wide network without risking safety. Such a checklist can include the following: Take an inventory of all desktops, laptops and other devices as well as applications such as email and other software. ● Conduct a cybersecurity audit of systems to determine the current state of cybersecurity and to identify potential vulnerabilities. Third-party cybersecurity firms have the software and experience to properly assess the situation. ● Does the company utilize cybersecurity software? Is the software updated consistently? ● What is the company’s data recovery plan in the event of an attack? ● How does a target’s cybersecurity protocols align, or not align, with the buyer? ● What are the main security considerations for integration? ● What strategic initiatives need to be implemented to support a smooth integration?

Tempe, AZ

Gonvarri MS Baja California Phoenix, AZ & Tijuana, Mexico

has been acquired by

has been acquired by

a portfolio company of

Huron/Sandusky, OH

has been acquired by Pittsburgh, PA Denver, CO

has been acquired by

a portfolio company of Lexington, MA

Shelby, OH

McAllen, TX

Valley View, OH

has acquired certain operating assets of

has been acquired by

has sold a significant equity interest to

Detroit, MI

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has been acquired by

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Beachwood, OH El Paso, TX

Crains-ACG section-2020-Final.indd 11

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The intersection of blockchain and M&A Smart contracts expedite, simplify deal closing BY GREG WATKINS AND TED MOTHERAL

M

&A closings don’t always go as planned, and in some cases can be considered coordinated chaos. Parties often work around the clock in hopes of meeting the infamous wire deadline, typically resolving final issues on the day of closing. Once handled in an archaic “roundtable” fashion, and sometimes still, the closing process lags behind technological advances. In a sense, closings remain roundtable, except the table is electronic and extends over lines of communication. However, even closings that use electronic means still require a verbal or written confirmation to release funds which, for some reason, seems outdated. As roundtable closings evolved to telecommunicated closings, the current method will also evolve. Deal closings

will eventually be streamlined through the use of smart contracts. A smart contract is similar to a written contract; each party has its set Watkins of obligations, except with smart contracts, the obligations are written in computer code. Smart contracts utilize blockchain technology — a decentralized ledger — and are self-executing, thereby eliminating the need for any additional confirmation to wire funds. Applying smart contracts to realworld practice would allow parties to codify the series of closing conditions. Each party would indicate its satisfaction of each condition unilaterally, without the need for individualized communication to the other party. Once all closing conditions are satisfied, the smart contract would

self-execute and immediately wire funds to the receiving parties. Blockchain technology continues to gain momentum, and Motheral its applications are being recognized in various industries. The above example, although simplified, shows that blockchain technology has a place in M&A as well and likely all across the legal industry. Greg Watkins is an attorney at Walter | Haverfield who focuses his practice on corporate transactions and blockchain technology. He can be reached at 216-928-2917 or at gwatkins@walterhav.com. Ted Motheral is a partner at Walter | Haverfield. Contact him at 216-9282967 or tmotheral@walterhav.com.

Congratulations to all 2020 ACG Cleveland Deal Maker Award honorees! Calfee, Halter & Griswold LLP congratulates our clients Edgewater Capital Partners, MobilityWorks and MRI Software on being named 2020 ACG Cleveland Deal Maker Award recipients. Calfee’s Corporate and Capital Markets practice is one of the largest and most prolific in Ohio, handling a significant number of complex and sophisticated transactions for clients around the country and globally. Doing deals isn’t just our clients’ business, it’s ours. Together we are driving success in the middle market in Northeast Ohio and beyond.

Calfee’s Corporate and Capital Markets Practice Contacts Jennifer L. Vergilii | jvergilii@calfee.com | 216.622.8568 Thomas M. Welsh | twelsh@calfee.com | 216.622.8529 CALFEE.COM | 888.CALFEE1 | INFO@CALFEE.COM ©2020 Calfee, Halter & Griswold LLP. All Rights Reserved. 1405 East Sixth Street, Cleveland, OH 44114

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What is your intellectual property worth? Chances are you don’t know BY JAY MOROSCAK

Y

ou only have to look at the changes at the top of our stock indexes — including Apple’s recent trillion-dollar market valuation — to see there’s been a seismic shift in the reasons why one company is worth more than others. The 10 largest companies by market capitalization are now dominated by technology firms. Intangible assets, such as intellectual property, have replaced tangible assets as the major source of corporate value. Today, more than 84% — or $19 trillion — of the S&P 500’s market cap is represented by intangible assets. Yet most businesses have a difficult time quantifying the value of their IP or that of potential mergers

and acquisitions targets. This makes IP difficult to protect and affects value in M&A transactions. Aon and the Ponemon Institute’s Moroscak 2017 Global Cyber Risk Transfer Report highlights a serious gap between companies’ efforts to insure cyber assets versus physical ones. Companies surveyed devoted four times as much budget to insuring physical assets as they did to cyber assets. That insurance gap is particularly striking given the average potential loss to information assets ($979 million) compared to property, plant and equipment ($770 million), according to the report. At the same time, companies surveyed indicated

they felt it was more likely they’d experience a loss to information assets than to their physical ones. Companies that fail to properly value their IP face serious and punitive difficulties when they are confronted with a patent or trademark lawsuit or embark on a takeover deal. While many companies find it confusing to put a price tag on their IP, there are tools that can help. Companies that measure the value of their IP portfolios accurately will be better positioned to protect those assets and will realize the maximum return from their innovation efforts. Jay Moroscak is a senior vice president in the Cleveland office of Aon. He can be reached at 216-272-2155 or jay.moroscak@aon.com.

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As advisors, we understand that finding the right opportunity is critical to portfolio companies and private equity firms when expanding geographically, adding a product line or increasing market share. Clark Schaefer Hackett is skilled at maximizing the value and minimizing the risk of an acquisition through quality of earnings analysis, tax due diligence and tax structuring consultation. From the initial investment and growth of the portfolio through the divestiture of an investment, our experienced, full service private equity and transaction advisory services team is dedicated to serving the unique needs of middle market private equity funds.

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Visit cshco.com for more information.

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Taking chips off the table

CRITICAL INSIGHT MEETS TRUSTED RESULTS. WHERE

Minority recapitalization an ideal bet for some business owners BY BROOKE HRADISKY

T Avoid surprises. Our national experts provide thorough buy and sell-side due diligence and quality of earnings assessments so you can make informed transaction decisions.

Mark B. Bober, CPA/ABV, CFF, CVA mbober@bmfcpa.com

Steve C. Swann, CPA/ABV, CFE sswann@bmfcpa.com

he vast majority of a typical private business owner’s wealth is tied up in one significant asset — her business. A considerable exit in the future may allow the business owner to experience a meaningful liquidity event and implement a comprehensive estate plan. However, all businesses are susceptible to an unpredictable catastrophic event (internal or external) that could put a business sale at risk. As such, we implore business owners to ask themselves — or even better, their wealth managers — should you be holding nearly all your eggs in one basket? Would your wealth manager do it in your stock

market portfolio? If not, how is your private company stock any different? A minority recapitalization is one solution that allows Hradisky owners to “take some chips off the table” while maintaining both ownership and operating control. In a minority recapitalization, debt and equity capital is used to fund a significant distribution to the owner. Typically, 10% to 40% of the business is transferred as part of attracting junior capital. The investor taking a minority equity position will most likely be a financial or family office sponsor in conjunction with a senior commercial lender. Of course, the value of the business owner’s remaining equity ownership post-transaction depends on the company’s financial metrics (future

revenue and profitability, long-term debt), growth capital needs and percent ownership retained. The most apparent benefits include: creating liquidity and diversification of assets; retention of operational control and majority ownership; benefit and discipline of having a partner to help with strategic decisions; and the opportunity to deliver and have follow-on transaction options. Looking at one’s public stock portfolio in conjunction with private stock is often overlooked — and minority recapitalizations are often ignored when considering transaction options to be vetted as an alternative to no action or to a full sell-side transaction. Brooke Hradisky is a vice president at Carleton McKenna & Co. Contact her at 216-523-1962 or bah@carletonmckenna.com.

M&A considerations for the next recession

F Strategy. Valuation. Risk. Aon helps clients protect and create value from their organization’s most important asset – intellectual property. Contact us today to learn how we use proprietary data, analytics and technology to provide a comprehensive approach to intellectual property strategy, valuation and risk. Jay Moroscak | 216.272.2155 | jay.moroscak@aon.com or visit aon.com/intellectualproperty

Crains-ACG section-2020-Final.indd 14

aced with the reality of the compressed holiday season and the unlikelihood of signing a letter of intent or even finding an M&A transaction that would have generated interest before the end of 2019, many of my clients’ thoughts shifted toward 2020 and the effect an economic downturn may have on a small to medium-sized business owner’s ability Humphrey to sell or purchase in the M&A market. In the past and particularly with regard to the last recession, the high multiples of the pre-downturn economy gave way to significantly lower multiples driven by more expensive or less-available capital as the downturn took hold. The cycle of lower multiples and less available capital served to drive the small- to mid-sized companies out of the M&A marketplace or caused such smaller players to become targets rather than acquirers. As we look ahead, an expected continuation of the availability of capital fueled by the lessons of a robust capital market seemingly disconnected from economic and political vagaries suggest that the impact of an upcoming recession on the M&A market may not be so dramatic. Recent past recessions caused in large measure by perceived abuses in the banking industry resulted in a dra-

‘‘

The upcoming recession, however, will be received more as the expected cyclical downturn of a healthy, running economy than evidence of fundamental flaws in a failing economic structure.

‘‘

BY ROBERT M. HUMPHREY

matic impact on availability of capital as banks came under attack from everyone, from the borrowing public to numerous regulatory enforcement groups. The upcoming recession, however, will be received more as the expected cyclical downturn of a healthy, running economy than evidence of fundamental flaws in a failing economic structure. Hopefully, this more tempered approach will allow the M&A market to find support at higher activity levels than were experienced in prior recessions. As always, the best prepared buyers and sellers will find the most M&A success in any recession and should be encouraged to seek the advice of experts in planning in 2020. Robert M. Humphrey is a shareholder at Roetzel & Andress LPA. Contact him at 216-615-4830 or rhumphrey@ralaw.com.

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A thoughtful approach to merging after an acquisition BY TONY PAPARELLA

K

nowing how to successfully integrate an acquisition can be learned from the inside or out. When a business is built on helping clients integrate new member companies, it can be easy to spot potential trouble. But, when that growing business needs to manage its own acquisitional integration, it becomes personal. In both cases, beware the overly simplistic timeline. After a deal, companies aiming for the operational, strategic and financial benefits of sharing infrastructure are often so Paparella intent on merging services and employees, they often fail to establish realistic timetables for their system integrations. Most transactions include a transitional service agreement, so the seller can temporarily provide infrastructure support, such as accounting, IT, and human resources after the transaction closes. But the timetable of TSAs is often miscalculated, leading to unexpected expenses of “renting” administrative systems after due dates or dropped balls on quality transitions. Hospital and health system mergers and acquisitions can be particularly troublesome when a complex array of active and legacy clinical, administrative and financial data needs to be transitioned to a different system. If the conditions of an M&A TSA miss the details and miscalculate timing, what happens next can be frustrating, including unmet expectations, costly deadline extensions and sullied reputations. That’s the outside wisdom of a service provider well-versed in managing legacy data. The insider view of an acquirer is more personal, meaning it focuses on people and culture and, much like legacy data transitions, cannot be rushed. The addition of a significant employee population requires careful planning to achieve the benefits of new talent, better teaming and expanded capabilities. In our case, a significant investment of private equity created the opportunity for two fast acquisitions to help realize our visions of growth and innovation. The employees who joined us came from successful companies and brought new energy and priorities to the old regime – offering a welcome shift in culture. By trumpeting the

Crains-ACG section-2020-Final.indd 15

changes and celebrating the new, expanded offerings throughout the organization, we built a shared sense of pride that permeated the entire staff. The lesson to listen openly and evaluate the power of people, capabilities and culture

has been a lesson we learned more than any in 2019, thanks to our new colleagues. Tony Paparella is founder and chairman at MediQuant. Contact him at tonyp@mediquant.com.

Our reach is growing. CHICAGO | Arthur Mertes Arthur.Mertes@TuckerEllis.com 312.256.9407

CLEVELAND | Jayne Juvan Jayne.Juvan@TuckerEllis.com 216.696.5677

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From our Cleveland roots, we have grown our corporate, securities, and M&A practices and expanded our bench strength to bolster our national footprint. With service out of Cleveland, Chicago, and Los Angeles, whether you are completing a complex transaction, raising capital, or managing day-to-day activities, we have the expertise and practical advice to help you exploit business opportunities. TuckerEllis.com

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Sell-side diligence – tax issues to consider during a sale

B

usiness owners spend countless hours building their businesses. When it comes to selling their businesses, however, owners often overlook the importance of due diligence work and preparation. Ignoring or de-emphasizing tax due diligence can result in significant transaction erosion, or worse: failed transactions, lost time and distraction from normal business operations. Sellside due diligence prepares sellers for negotiating the highest price possible with buyers and helps to avoid common pitfalls that can impact a deal. The benefits of tax due diligence and advanced preparation before a sale include: Optimal transaction value Exposure of transaction risks and potential liability ● Opportunity to assess oversights in advance of entertaining buyers ● Increased negotiation power ● Enhanced control and credibility throughout the transaction cycle ● Higher probability of closing the transaction ● ●

‘‘

Although it is important to focus on all aspects of tax — including federal, state income, franchise and gross receipts, sales and use, employment Boergert and property tax—and unclaimed property funds, there are certain aspects that could create risk for sellers and opportunity for buyers.

sellers should ensure they know the particulars.

Tax attributes

Sales and use tax

Analyzing the tax attributes of a business through the sell-side process can be valuable to a seller when it poses a potential benefit to the transaction. Attributes such as net operating loss carryovers, business credit carryovers, minimum tax credits and capital losses should be considered.

Employment tax

Employment tax can be a risk for sellers. Tax authorities are focused on misclassification of employees as independent contractors and could impose tax penalties or interest if a misclassification is found. The classification of workers as independent contractors depends on the circumstances of each situation;

The landscape of sales and use tax changed overnight when the U.S. Supreme Court rendered a close 5-4 decision in South Dakota v. Wayfair, overturning the physical presence standard for the sales and use tax nexus that had been in place for 26 years.

Sales and use tax has become an increasingly complicated area where pitfalls can occur. The landscape of sales and use tax changed overnight when the U.S. Supreme Court rendered a close 5-4 decision in South Dakota v. Wayfair, overturning the physical presence standard for the sales and use tax nexus that had been in place for 26 years. Almost every state has enacted legislation due to the Wayfair case. In the wake of the Wayfair decision, businesses need to understand how to navigate the new world of state online sales taxation and its economic nexus thresholds. These thresholds create a collection and filing responsibility for businesses, thus causing potential tax

exposure (if not collected) they may not have anticipated. Understanding the changes in state legislation is important, but even more important for sellers is determining how the decision will impact their business and what steps their company should take. Sellside tax due diligence is the first step.

Income tax

Even before the dust has settled for the sales tax implications of Wayfair, states are expanding the interpretation of Wayfair to relate to income tax. Although economic nexus standards relating to income, franchise and gross receipts tax have existed in some states and are a growing trend, Wayfair has accelerated the enactment of such legislation in states where no such rule existed. This trend is expected to expand as states continue to look for money.

‘‘

BY KERI BOERGERT

Pennsylvania, Hawaii, Massachusetts and Texas have enacted or proposed rules that will impose an economic nexus threshold for corporate net income tax purposes. Failure to file in the required states would pose risks to buyers that they may not want to deal with or may want reimbursement for under the terms of the transaction. As business owners assess opportunities to sell, tax exposure risk and its impact on a sale should be a critical area of concern and assessment. Working to correct potential areas of concern prior to buyers becoming involved can minimize risk and maximize the value of a business for the seller. Keri Boergert is a principal at Clark Schaefer Hackett. Contact her at kboergert@cshco.com

Risk Management & Human Capital Strategies From an Investor Mindset

Risk Management Employee Benefits Corporate Aggregation Retirement Plan Services Representations and Warranties Insurance

OswaldCompanies.com/PrivateEquity

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Driving Operational Value From Diligence to Divestiture

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Set yourself apart to win more deals BY STEWART KOHL

W

ooing the owners of successful businesses is a big ingredient in any successful buyout recipe, and it’s more important than ever in what’s a stunningly competitive and pricey market. Pitchbook recently reported that purchase price multiples hit a staggering 12.9x in 2019, as low interest rates and other factors goose the market for high-quality companies. Naturally, an investor must be willing and able to pay up to win competitive races for great companies. But that’s not always what wins the race. While all prospective buyers may be offered a similar deal price, the seller will choose the company that has the best track record for closing a deal quickly and bringing to the table the right knowledge and team to accelerate growth. Quality investors spend the diligence period developing a rapport with the company management team, demonstrating industry experience and knowledge, explaining its resources and laying out a clear plan that includes an aggressive add-on strategy. These attributes demonstrate the ability to stand out as a buyer in this crowded and competitive field. Here at Riverside, we’ve made more than 600 investments — averaging about 50 a year — and we’ve learned a lot along the way. Here are some tips: Be a partner. Respect what made the company an attractive opportunity by encouraging the seller to reinvest alongside you and, when appropriate, even retaining management or board positions. They know the company exceptionally well, and aligning interests is often a powerful catalyst for growth. Bring more than money. This is a big surprise to many people, but competitive processes can be won without being the highest bidder. Demonstrate to the seller that you have a clear plan for making the company bigger and better — and the resources to execute that plan. This provides assurance that the company is in good hands, while offering the seller what we call the “second bite of the apple” when they benefit from the growth of the company during the hold period. This second bite can be even bigger and sweeter than the first when we accomplish our shared goals.

apply deep industry knowledge and talent to get the best results. Earning the experience needed to build a successful track record means Kohl developing extensive understanding, networks and capabilities in specific industries. Focus on

how your experience aligns with the goals of the seller. Prepare. A comprehensive plan explaining your short- and long-term goals – and the strategies and tactics you intend to employ to achieve them – will go a long way to impressing a choosy seller. It also makes great business sense. Integrating a growth plan into your due diligence process is not only

wise from an investment perspective, it’s also a great way to showcase all the tools and capabilities you can offer the seller’s company. This is by no means a comprehensive list, but these are a handful of ways that one can stand out in today’s hypercompetitive market. It’s also notable that these are examples of good investing

101. That’s no accident – the best outcomes usually happen when we align interests with the companies in which we invest. It’s a great habit and one the best assets demand. Stewart Kohl is co-CEO of The Riverside Co. Contact him at 216-344-1040 or info@ riversidecompany.com.

The team that gets your deal done! If your family office is seeking to purchase a business, every deal involves complex issues. Our highly accomplished M&A team has executed hundreds of acquisitions and divestitures from start to finish. Talk to us about our extensive experience working with families to diversify their portfolio of companies. Let us help you through every stage of the process to get your deal done.

Patrick Berry

Co-Chair

Christal Contini

Co-Chair

Christopher Hawley Brian Jereb

Michael Riley

Michael Antovski

David Kall

Roger Shumaker

Todd Baumgartner Jeffrey Consolo

Bernard Karr

Kelsey Smith

Jason Klein

Frank Wardega

Richard Cooper

Nicole Kline

Carl Grassi

Michael Meaney

Katherine Wensink Michael Witzke

Ilirjan Pipa

Amy Wojnarwsky

Show your experience. Saying you can do something and pointing to org charts and offices is one thing. Get references and demonstrate what you’ve done with powerful case studies and compelling numbers that prove you can accomplish your goals. Specialize. Growing any company is complex and challenging. Doing so without expertise in the pertinent industry makes it even harder. Focus on investing in sectors where you can

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Be mindful of benefits and risks when considering a rollover

Translating purchase price to takeaway cash at closing BY PETER SHELTON AND MITCHELL GECHT

A

greeing on the purchase price for your business is an important first step in any sale process. However, it is crucial to understand the distinction between base purchase price and the amount of cash you ultimately take home. Thoughtful consideration of the following terms in middle-market transactions can prevent unwelcome surprises: (1) cash-free/debt-free; (2) earn-outs; (3) rollover investments; (4) working capital adjustments and (5) escrows. “Cash-free/debt-free” means the seller pays off indebtedness at or prior to closing, but keeps (or gets paid for) cash and cash equivalents. Earn-outs can be used to bridge the gap in perceived business value, but they can be tricky in their drafting and application. As a seller, ensure that payment is triggered on topline earnings, rather than profits which can be manipulated. Also, set forth clear ground rules for operation and measurement of the business during the earn-out term to ensure a fair chance to hit target numbers. Rollover investments are common, particularly with private equity buyers.

They limit the amount of cash proceeds at closing, but offer a tax deferral and the opportunity to participate in future upside in the business. Shelton In most transactions, purchase price is adjusted upward or downward based on the amount of working capital at closing relative to a target amount. Establishing the right working capital target is critical. Whether based on a trailing 12-month or six-month analysis, or some other adjusted approach, be sure to account for seasonality and other trends that impact the business. The working capital adjustment should ensure a fair deal for both sides, not a manipulation of purchase price. Escrows funded out of the purchase price are used to ensure seller obligations for any working capital adjustment in favor of the purchaser and any purchaser indemnification claims for breaches of representations and warranties. An amount (typically, 10% of the working capital target amount) is held in escrow and released upon final determination of working capital, and an additional

amount (typically 10% to 20% of the purchase price) is held in escrow for a 12-18 month period to satisfy indemnification claims. Gecht However, Representation and Warranty Insurance, a popular product in middle-market transactions, will materially reduce the amount of purchase price held in escrow for indemnification claims. In RWI deals, the parties often split the deductible under the insurance policy, which results in an indemnification escrow equal to .5% to .75% of the purchase price. Consider these items early in the sale process, and you will avoid surprises at closing. Peter Shelton is a partner with Benesch’s Corporate & Securities and Private Equaity Practice Groups. Contact him at 216-3634169 or pshelton@beneschlaw. com. Mitchell Gecht is an associate in Benesch’s Corporate & Securities and Private Equity Practice Groups. Contact him at 216-363-4631 or mgecht@ beneschlaw.com.

THE LEGAL TEAM THAT

GETS YOUR DEAL DONE

Amanda A. Barreto

James M. Gianfagna

Joseph P. Gibbons

Gregory C. Johnson

Kenneth J. Laino

Michael W. Schauer

Aanchal Sharma

James D. Vail

BY DOMINIC A. DIPUCCIO

R

ollovers continue to be common in private M&A transactions, particularly those involving financial buyers. The term “rollover” generally refers to the event in which a seller receives buyer equity as a portion of the seller’s total sale consideration. According to some studies, approximately two-thirds of private equity fund buyers in M&A transactions last year required sellers to “rollover” a portion of their deal consideration. More than 80% of such transactions involved rollovers, whether required or not. In most cases, seller rollover amounts represented 10% to 25% of total seller consideration. There are many buyer and seller benefits to rollovers. Securing “skin in the game” from rollover sellers who stay on with the target company as key managers is a major driver of rollover requirements for buyers. Providing additional financing support, closing valuation gaps and providing additional negotiating leverage further entice buyers to include this deal term. Providing additional upside and tax deferral benefits are principal inducements for sellers. When presented with offers that include rollovers, sellers and their counsel need to be mindful of the risks associated with rollovers to assess the entire transaction. The following general considerations should be taken into account to evaluate properly the rollover’s risks and rewards: ●

Rollover equity should be pari-passu

with, or equal to, buyer investor equity. Sellers should resist any offers of junior securities. ● Minority equity holder protections DiPuccio should be bargained for and obtained, such as preemptive rights, tag-along rights, information rights, registration rights, board seats or observation rights. Vesting requirements should never be a condition to rollover equity. ● Sellers should review and evaluate all information that is material to their investment decision in the rollover equity. This information includes buyer’s capitalization and resources (paying particular attention to debt terms and leverage), prior acquisition history, business plan, growth strategy, projections and exit strategy. ● Ancillary terms relating to rollover equity buybacks on employment termination or other events, and restrictive covenants (such as noncompetes and non-solicitation clauses) should be understood and acceptable. ● Rollover sellers should understand and be comfortable with their ongoing roles and authority with the buyer moving forward, as well as the terms of their employment. In short, rollovers are here to stay. But sellers and their counsel need to do their homework to evaluate them properly. Dominic A. DiPuccio is chair of Taft’s M&A Group. Contact him at 216-706-3830 or ddipuccio@ taftlaw.com.

MEET OUR BUSINESS AND CORPORATE TEAM 1375 E. Ninth Street, Suite 900 Cleveland, OH 44114 216.696.4200 | www.SSSB-Law.com

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Winners are forged in the fire of economic duress M&A advice to boards for navigating the inevitable recession By CHRISTOPHER J. HEWITT and JAYNE E. JUVAN

T

he psychology of buying and selling companies is much like that of buying and selling individual stocks. Notwithstanding the old adage of “buy low, sell high,” most investors do exactly the opposite. When markets are frothy and exuberance is high, the “fear of missing out” leads investors to buy when stocks are overvalued. Conversely, in the depths of a recession or at a market low, investors often let fear drive their decision-making and begin selling. The same is often true when corporate boards consider acquisitions and divestitures — the fear of failure and legal liability can drive poor decision-making and cause boards to miss out on golden opportunities.

Corporate law supports informed risk-taking It is not unusual for boards of companies — whether they are private or

public – to make decisions that are contrary to those that will fuel growth or become paralyzed during these uncertain times. Many times, they Hewitt become reluctant to make any kind of acquisition or divestiture when the market declines out of fear that their decisions will be scrutinized and second-guessed with the benefit of hindsight. Boards are often concerned about the liability exposure they may face if they make a decision that appears aggressive and fails to accomplish the intended result. Of course, no one can time the market, and it is foolish to try. It’s difficult to predict whether a particular market high is the final one before a true bear market occurs. The market can literally have hundreds of new market highs between the end of the last bear market and the beginning of the next one. Fortunately, both Delaware and Ohio

corporate law recognize these truths and accommodate risk-taking. The essence of the corporate governance paradigm is that boards of directors are not liJuvan able for bad decisions made in good faith on an informed basis without conflicts of interest. At a high level, directors owe fiduciary duties to a corporation, namely the duties of care and loyalty. The duty of care requires the board to act in an informed manner after considering all reasonably available information. The duty of loyalty requires the board to act in the best interests of the company and its shareholders, not in any individual director’s own interest. If the board meets both of these duties, directors have business judgment rule protection. This means that a court will not, in fact, second-guess the decision the board made. Directors are also eligible for indemnification and advancement of expenses in certain

instances, and directors and officers insurance backstops these obligations. Obviously, any acquisition should make sense and should be conducted in a disciplined manner. This concept is true in any market. Once a board determines it intends to make an acquisition, however, its members should not then worry about potential liability even if the acquisition is premature or ultimately fails.

Shrewd boards capitalize on others’ weaknesses in economic downturns

Clearly, near- and long-term market and economic expectations will influence the price a buyer is willing to pay for an asset. But there are as many quality buying opportunities, if not more, during a recession as during economic expansion. Boards should embrace economic downturns as the perfect time to buy new companies, not as the time to pull back. The most common lament that we hear in today’s mergers and acquisitions environment is that companies are priced too dearly, owners have

unrealistic expectations on price and multiples, and there is too much competition for the good deals that are out there. Private equity and strategic buyers, family offices and independent sponsors have trillions of dollars of capital to spend on transactions, and everyone is looking for proprietary deals to avoid this competition and try to lower prices. When the market eventually softens — and it will — those buyers with the intestinal fortitude to buy in a declining market will see less competition and better pricing. Think of Mr. Potter and George Bailey battling for the hearts and minds of the citizens of Bedford Falls during the Great Depression in “It’s a Wonderful Life,” when there was a run on the banks. Mr. Potter offered to buy out the shareholders of Bailey Bros. Building and Loan at 50 cents on the dollar, and Mr. Bailey used his own personal honeymoon money to pay 100%. As he did so, he told the crowd, “Potter isn’t selling. Potter is buying. And why? Because we’re Continued on next page

Investment banking and financial advisory for the global middle market Michael E. Gibbons

216.920.6624 mgibbons@bglco.com

Andrew K. Petryk 216.920.6613 apetryk@bglco.com

Effram E. Kaplan

216.920.6634 ekaplan@bglco.com

Anthony D. Delfre 216.920.6615 adelfre@bglco.com

Securities transactions are conducted through Brown, Gibbons, Lang & Company Securities, Inc., an affiliate of Brown Gibbons Lang & Company LLC and a registered broker-dealer and member of FINRA and SIPC.

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Trends in valuation EB IT DA Multiples

BY ANDREW K. PETRYK

2019 in review

Lawyers with one mission: to advance yours. Our M&A team gets your deal done and done right.

VA LUAT I O N TRE N D S EBITDA Mu ltiples

S T R ATEG IC BUYE RS

1 2.0 x 1 0.0 x 8 .0x 6 .0x 4 .0x 2 .0x 0 .0x

Taftlaw.com

2 00 32 01 4

2 01 5

2 01 6

<$2 50 M

7 .8x

9 .2x

7 .4x

$ 25 0-$ 49 9M

8 .5x

1 0.1 x

1 1.4 x

$ 50 0M +

9 .3x

9 .8x

1 0.3 x

Source: S&P Leveraged Commentary & Data

CapitalWorks Connects in Northeast Ohio CapitalWorks enjoyed another successful year in 2019 with two platform acquisitions from our fourth fund and the sale of a portfolio company from our third, all located in Northeast Ohio. With each acquisition, we connect company owners and managers with our extensive network of industry partners who assist us in building and improving middle market businesses. Our team looks forward to connecting with more owners and management teams in 2020. The below represents our 2019 transactions.

Acquired May 2019

Acquired June 2019

Contact Kellie Work at kwork@capitalworks.net capitalworks.net

We acquire lower middle-market niche manufacturing, value-added distribution and business services companies east of the Rockies and provide them the capital, support and freedom to grow.

Crains-ACG section-2020-Final.indd 20

9 .4x

By the numbers Valuations sustained at elevated levels throughout 2019. Strategic buyer multiples across industries and deal-size spectrums remained within a tight band, with a reported average EBITDA multiple of 9.9x in November for all transactions. Size premiums were evidenced in financial buyer transactions, with a reported EBITDA multiple of 9.6x for enterprise values between $100 to $250 million, which compares to 6.2x for enterprise values from $10 to $25 million. The lending market continues to support deals with accommodative financing, and the pool of available capital continues to swell, as aggressive nonbank lenders compete for additional market share from traditional lenders. In the broader middle market (EBITDA of $50 million or less), total leverage (total debt to EBITDA) rose to 5.4x in November, a near decade-high. Total

1 2.0 x 1 0.0 x 8 .0x 6 .0x 4 .0x 2 .0x 0 .0x

2 00 32 01 4

2 01 5

2 01 6

2 01 7

2 01 8

Nov-1 9

$

<$2 50 M

7 .8x

9 .2x

7 .4x

7 .2x

8 .5x

1 0.1 x

$

$ 25 0-$ 49 9M

8 .5x

1 0.1 x

1 1.4 x

1 1.2 x

9 .1x

1 0.8 x

$

$ 50 0M +

9 .3x

9 .8x

1 0.3 x

9 .6x

1 0.3 x

9 .4x

$

SOURCE: S & P Leveraged Commentary & Data

Source: S&P Leveraged Commentary & Data

Sou

FINA NC IAL B UY ER S FINANCIAL BUYERS 1 2.0 x 1 0.0 x 8 .0x 6 .0x 4 .0x 2 .0x 0 .0x

2 00 32 01 4

2 01 5

2 01 6

2 01 7

2 01 8

Nov-19

$ 10 -$ 2 5M

5 .5x

5 .9x

5 .8x

6 .3x

5 .9x

6 .2x

$ 25 -$ 5 0M

6 .2x

6 .6x

6 .4x

6 .6x

6 .9x

6 .9x

$ 50 -$ 1 00 M

6 .7x

7 .8x

7 .2x

8 .2x

8 .9x

7 .5x

$ 10 0-$ 25 0M

7 .3x

9 .0x

8 .9x

9 .1x

8 .8x

9 .6x

SOURCE: GF DATA®

Source: GF DATA®

leverage in the lower middle market (defined as enterprise values of $500 million or less) averaged 4.9x through November, the second highest reading since 2008. Credit market forces, notably capital flowing into direct lending and the growing dominance of alternative lenders, should provide the appetite and momentum necessary to sustain leverage at or near current levels.

2020 outlook Industry sentiment around deal making in 2020 will likely be characterized as cautiously optimistic. The economy, tariffs and presidential election are top of mind here at home. Additionally, global issues and tensions complicate the picture with their potential to impede capital markets in the form of higher volatility, increased cost of capital and reduced liquidity.

In uncertain times, larger companies equate to safety; this was evidenced in 2019 by higher multiples garnered for larger transactions. And as is typical of this stage of the longlegged cycle, buyers are looking for recession-resilient businesses with demonstrable growth, market leadership, critical mass and high barriers to entry. Valuations continued to hold late into 2019 and early 2020, so timing is favorable for sellers seeking liquidity events. Considerable capital and strong buyer and lender appetites exist to sustain an attractive M&A market for the foreseeable future. Andrew K. Petryk is a managing director and leads the Industrials practice at Brown Gibbons Lang & Co. Contact him at 216-920-6613 or apetryk@bglco.com.

Sold August 2019 to Kinderhook Industries

Celebrating Two Decades

1 0.3 x

FIN

Valuation Trends — EBITDA Multiples

STRATEGIC BUYERS

A strong sellers’ market persisted in 2019, with valuation multiples rising to peak levels. Competition for high-quality deals intensified for both growth-seeking buyers and lenders supporting transactions. The near frenzy-fueled purchase price multiple expansion was underpinned by deal scarcity and the need to deploy capital. Acquisition-driven Petryk growth remains a primary lever in value creation and is keeping M&A multiples for healthy companies strong. Corporate buyers are currently sitting on more than $1.5 trillion in idle cash and face mounting pressure from shareholders to complete transactions to deliver above-market organic growth. Private equity sponsors increasingly are expected to accelerate the velocity of capital investment while also generating market-leading returns in a highly competitive market. Adding to the complexity and competition is an expanding pool ofNov-1 investors, among 2 01 7 2 01 8 9 them family offices and independent 7 .2x 8 .5x both1 0.1 x proven to sponsors, which have 1be 1.2formidable x 9 .1xplayers.1 0.8 x 9 .6x

STRAT EG IC BUYERS

CONTINUED FROM PREVIOUS PAGE

panicking and he’s not. … He’s picking up some bargains.” Those who keep their wits about them should profit handsomely when the market recovers.

This time is not different

As with most other bull markets, especially one that has gone on for over a decade, it seems like this time it is different. There is no reason it

cannot go on forever. But the economy is ultimately driven by human behavior – the Federal Reserve and Treasury can’t bail us out of everything, and eventually there will be another downturn. The catalyst for the turning point is likely to be different from prior recessions, but a recession is inevitable. Now is the time, when the market is at an alltime high, to be especially careful as a buyer. When the market turns,

boards should view it as a good buying opportunity and have the courage to move forward with their acquisition strategies. Christopher J. Hewitt and Jayne E. Juvan are partners at Tucker Ellis. Contact him at 216-6962691 or christopher.hewitt@ tuckerellis.com. Contact her at 216-696-5677 or jayne.juvan@ tuckerellis.com.

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Northeast Ohio’s leading deal makers to be honored ACG Cleveland, Northeast Ohio’s leading organization for merger and acquisition and corporate growth professionals, will recognize the winners of its 24th Annual Deal Maker Awards at 5:30 p.m. Thursday, January 23, 2020, at the Hilton Cleveland Downtown. The Deal Maker Awards are a tribute to Northeast Ohio’s preeminent corporate deal makers for their accomplishments in using acquisitions, divestitures, financings and other transactions to fuel sustainable growth. The 2020 winners are:

Corporate Public Category Parker-Hannifin, a Mayfield Heightsbased global leader in motion and control technologies.

Corporate Private Category MobilityWorks, a Richfield-based national chain of wheelchair accessible van providers.

Buyout Firm Edgewater Capital Partners, an Independence-based private equity firm investing in lower, middle-market performance materials businesses.

Women in Transactions Award Lisa Kunkle, PolyOne Corp.

Emerging Technology MRI Software, a Solon-based provider of real estate software.

F

To register to attend the Deal Maker Awards, visit www.ACGcleveland.org.

Expand your networks with ACG

rom professional development and educational events, to content lunches, yoga retreats and beer n’ learns, ACG Cleveland offers a myriad of ways for individuals to network and learn through its Women in Transactions and Young ACG Cleveland chapter groups.

Young ACG Cleveland

As the largest young professional

Crains-ACG section-2020-Final.indd 21

EXECUTIVE OFFICERS President John Grabner, Hylant Group Past President Dale Vernon, Bernstein President Elect Thomas Welsh, Calfee, Halter & Griswold LLP Executive Vice President, Governance Peter Shelton, Benesch Executive Vice President, Innovation Rebecca White, Kenan Advantage Group Inc. Executive Vice President, Annual Events Jonathan Ives, SCG Partners Executive Vice President, Programs Cheryl Strom, The Riverside Co. Executive Vice President, Brand Matthew Roberts, Copper Run Chapter Executive M. Joan McCarthy, MJM Services

Board of Directors

Women in Transactions

This networking group is composed of women who are active contributors to the deal transaction process, including private equity investors, strategic acquirers, lenders, investment bankers, consultants, transaction attorneys and accountants. This group’s mission is to contribute to the growth in Northeast Ohio middle-market organizations by providing the tools, resources and networks to support female deal makers. WiT aims to bring innovative and educational content that will help women advance their careers and foster leadership opportunities. Networking events are carefully curated and planned to accommodate the interests and schedules of female deal makers. Previous events have included golf clinics, poker night, skeet shooting, wine and canvas, glass blowing, spa days, dressing for success, theater nights and female leader speeches. Both male and female colleagues are invited to support and participate in WiT events. Events are open to any M&A professional, but ACG members receive significant discounts on registration.

ACG Cleveland 2019-20 Officers and Board of Directors

cohort across 59 global ACG chapters, Young ACG Cleveland connects young deal making professionals with peers across all mergers and acquisitions services and roles, including private equity, corporate development, banking, accounting, insurance, wealth management and consulting. Networking and educational opportunities that YACG Cleveland has hosted include: Educational lunch or beer ’n learns: Often providing continuing education for credentialed professionals, these events are hosted at either local member deal making firms or the trendiest watering holes. Host firms educate on topical M&A subjects and open the floor for Q&A sessions. Social networking events: Hosting between two to four social events per year, from informal happy hours to speed networking, these events connect young professionals with the

larger ACG community. These evening events typically attract about 40 to 50 attendees. Special events: Typically once per month, special events include speakers such as business or community executives or a panel discussion. Attendees at Young ACG events primarily consist of ACG members ages 35 years and younger, as well as non-ACG member young professionals. ACG members older than age 35 are welcome and encouraged to attend Young ACG events. Unique among all of the young professional cohorts across ACG, YACG Cleveland has its own governing committee consisting of a chair, events committee and a membership committee. This group meets quarterly to decide on programming and conduct outreach to potential members. In addition to the benefits of ACG membership, Young ACG Cleveland

benefits include: ● Discounts on ACG programming of up to 60% of member rates. ● Access to Middle Market Growth Magazine and ACG JobSource databank. ● Local and national networking opportunities. ● Unique programming crafted by peers. ● Mentorship with strategic pairing with an ACG Cleveland member. ● Improved annual reviews by demonstrating your involvement within the deal community. For information on WiT and Young ACG Cleveland events and membership, visit acgcleveland.org/Cleveland or email admin@acgcleveland.org. Follow the LinkedIn groups at WiT Cleveland and Young ACG Cleveland, and on Twitter @WiTCLE and @YACG_Cleveland.

Charles Aquino, Citizens Capital Markets Tricia Balser, CIBC Mark Brandt, Pease & Associates John Doolos, KeyBanc Capital Markets Michael Ferkovic, BDO USA LLP Bryan Fialkowski, JP Morgan Chase Beth Haas, Cyprium Investment Partners LLC Joseph Hatina, Jones Day Mark Heinrich, Plante & Moran Brian Kelly, PwC Matthew Kolman, Deloitte & Touche LLP John Kramer, RPM International Inc. Brian Leonard, Edgewater Capital Partners Thomas Libeg, Grant Thornton LLP Mindy Marsden, Bober, Markey, Fedorovich and Co. Martin McCormick, FNB Mezzanine Jay Moroscak, Aon Risk Solutions Wes Perry, ADP Jim Rice, Ernst & Young LLP Jeff Schwab, Oswald Companies William Watkins, Harris Williams

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Profile for Crain's Cleveland Business

Association for Corporate Growth and M&A 2020  

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