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Posts Tagged ‘Maturation and Acquisition’

HD Repair Forum Releases Details for 3rd Annual Event, March 24th-25th

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The HD Repair Forum announced the release of its’ educational program and agenda for this years’ installment of the only event dedicated to the heavy-duty collision repair market. The two-day event is filled with a fast-paced agenda, with speakers from industry leading companies and individuals driving change in the industry. Some of the topics include:

  • Frame, Cab, and Trailer Repair
  • Advanced Driver Assistance Systems (ADAS), Scanning, and Diagnostics
  • Business Strategy and Employee Relations
  • Steering, braking, and other key repair knowledge
     

The speakers and content for this program are a derivative of the work, input, and direction of the HD Repair Forum Advisory board www.hdrepairforum.com/advisory-board

HD Repair Forum Advisory board member, James Svasaand of Penske Truck Leasing states, “What makes the HD Repair Forum unique is that we have direct input on the content, speakers, and direction of the conference. As a result, it’s an event created for the people, but more importantly by the people in the industry.” 

The HD Repair Forum continues its goal to expand and include other industry stakeholder groups. For the first time, a bus manufacturer (Prevost) will be presenting at the conference. HD Repair Forum Advisory board member, Mark Polzin of Budget Truck & Auto added, “We repair cars, trucks, RVs, and buses. I’m thankful Prevost will be at the event. Their participation will shed light on some areas the industry can clearly benefit from, as it relates to the availability of parts information and repairability.” 

To see a complete list of speakers, content, and education programs visit: www.hdrepairforum.com/agenda

Online registration information for the event can be found at www.hdrepairforum.com/register

Any questions or comments can be directed to Brian Nessen and Jennie Lenk.  

The Demystification of M&A – Part 4.a. SOPs in M&A

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In our previous articles, we broke down the numerous motivations from both a buyer’s and a seller’s perspective morn considering a merger or acquisition (“M&A”). Now it’s time to look at the M&A process.

There are exceptions to every rule, except the rule that there’s always exceptions to rules…

No two collision repairs are identical. Similarly, no two M&A deals are exactly alike. In the more than 100 closed deals that I have participated in (and the few hundred more that didn’t close), there was always a wrinkle, an exception. However, also like collision repair, there are certain steps that typically are followed in every deal – some SOPs. Here’s a breakdown of the major steps in the M&A process, and for those who have had an unpleasant marriage experience, please pardon the analogy:

Beautifying: Just like blueprinting a collision repair job, proper planning is critical to maximizing the outcome of a deal. For a buyer, this includes securing financing, ensuring the existing company is stable enough to function effectively, without the owner for an extended period of time, lining up key vendors, deputizing a deal team, etc. For a seller, the process begins months to even years earlier and is focused on areas such as having clean financials, tightening up operations so that the shop is meeting or exceeding widely-followed KPIs, shoring up key referral sources, vendors, and employees, and performing any deferred maintenance. Savvy sellers also assemble a dream team of advisors (i.e., a tax expert, transaction attorney, and a banker/broker if the deal is sufficiently large), and they perform the same due diligence on themselves that a buyer eventually would do. If there’s a skeleton in the closet, it’s far better for the seller to find it than a buyer.

Courting: Finding a deal means very different things to a buyer and a seller. Buyers tend to prefer exclusive deals, those deals that no other buyer is involved (a.k.a., “non-auction deal flow”). This requires a proactive, disciplined system of regularly contacting potential targets, along with playing an active role in the industry by attending events, like the HD Repair Forum. As for sellers, the process of identifying a potential buyer is very different. Oftentimes, this is left to the seller’s banker/broker; DIY sellers typically reach out to people they know, including peers and competitors. The critical take-way at this stage is to preserve confidentiality. Once the word is out that a shop is for sale, referral sources get concerned and key employees (i.e., those most desirable by your competitors) get mobile.

Dating: Once a few potential suitors have been identified, it’s time to spend some time together. Shrewd buyers will ask for as much data as possible about the seller’s referral sources, financials, customers, employees, and facilities & equipment. Shrewd sellers will already have this package prepared and formatted to tell a story that makes the business look most attractive to potential buyers. This may require different versions if there are multiple types of buyers. Typically, a walkthrough also occurs at this stage so the buyer can assess capacity and necessary capital expenditures to integrate it into its existing operations (Note to sellers: conduct the walkthrough at night!). The buyer’s goal at this stage is to complete a valuation of the business and identify the key deal terms.

Our next article will focus on the latter stages of completing a deal. Stay tuned!

Comments / questions / criticisms? Are you contemplating a deal that might fit into one of these categories and you want to ensure you’re making a sound decision? Feel free to e-mail me: john.walcher@veritasadvisorsinc.com – I’m happy to explore the circumstances with you. Our next article will explore the anatomy of a deal. Until then, happy dealing!