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:
Dan's PCT article about private equity investors: "Private Ayes"
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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