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Episode 118

3/9/23

Topic: How to Expand Your Business Through M&A

Guest: Dan Gordon & Donnie Shelton



In this episode we discuss:

  • Why the pest and lawn mergers & acquisition market has been very active in the past few years

  • How valuations were originally being driven up by strategic buyers — and now it's coming from private equity firms

  • How smaller companies can get into the M&A game

  • Donnie's experience acquiring other companies

  • Why having the right customers is the biggest factor in your success

  • How you can find opportunities for targets

  • The role of nondisclosure agreements (NDAs) and nonsolicitation agreements

  • Advice for "kicking the tires" and "going under the hood"

  • The letter of intent (LOI) and what it entails:

    • Purpose/overview

    • Buyer and seller information

    • Purchase price

    • Payment terms

    • Assets to be included in the sale

    • Liabilities

    • Due diligence

    • Closing

    • Confidentiality

    • Exclusivity

  • Types of companies are ideal targets

  • Red flags to look out for

  • What due diligence entails:

    • Organization

    • Office lease

    • Vehicle details

    • Operational details

    • IT details

    • Committed contracts

    • Assignability of any customer contracts, if needed

    • Insurance information

    • Employee benefits

    • Taxes

    • Litigation

    • Environmental inquiry

    • Bank statements and financial information

  • The reality of deal fatigue

  • Why it's important to be on the same page when it comes to integration

Resources:

Notable: "A really good deal is one where everybody's a little pissed off at the end. That's been my experience." —Dan Gordon

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