Bryan Graiff: Merger & Acquisition (M&A) Both Sides of a Deal, As an Employee

Merger & Acquisition interview for buyers, sellers and employees

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Bryan’s Background: 

• Graduated from Univ of Ill.
• Arthur Anderson in 1992: 6 yrs and volunteered to do everything he could. Never shyed away from a tough assignment.
• Went back to get MBA along with CPA.
• LMI Aerospace Corp Controller through IPO: Did a lot of improvements and got into operational director
• Astaris: Took through a sale process.
• Waylon Securities CFO: Private, family owned business, $40M and grew to $120M while he was there.
• Then CFO / COO for Life Uniform: Private Equity owned business. Largest retailer of medical uniforms. 5 years. 10 acquisitions. Sales process through strategic offering in mid-2013. Was CEO when it was sold.
• Partner in Charge, Transaction Advisory and Litigation Support Practice at Brown Smith Wallace

• Help us understand and demystify what M&A is.
• What is due diligence? Is performed in an acquisition / sales. Done to ensure what you’re buying is what you expect it to be. It’s valuation, testing earning. Kicking the tires to ensure you get what you think you’ll get. Companies are often sold by investment banker/ business boeker. Company is stating certain facts to support their valuation. Transactions are similar to large personal transactions: cars, homes, etc.
• When is it a merger v. acquisition?
  • Certified Mergers & Acquisitions: really means acquisitions and sales divestitures.

• Transaction Advisory:

• In Preparation for a sale: Just reading an article about how many businesses have owners who are 55+ years old. Don’t have succession planning, etc. There are many businesses getting ready for sale in the next 10 years.
• • Know what it’s worth. Have a business valuation that will identify current value as well as value drivers and value eroder to create strategies to maximize value.
  • Consider tax situation and corporate structure.
  • Quality financial info: having holes and problems in the information will hurt the valuation.
  • Marketing of the business.
  • Good transaction attorney. There are differences between the personal attorney and a specialist.
• Buyer: Many of the above count the same for buyers
• • Valuation by an independent professional firm will support your negotiations.
  • Signed letter of intent to do real due diligence.
  • Quality of earnings report to confirm what sellers are telling you about future earning potential.
  • Need to consider post-closing transition.
  • Two kinds of buys:
  • • Strategic buys who will have synergies, overlap and redundant positions.
    • Private Equity: May shake up upper management but rank and file middle managers and sales reps are left alone and given time to prove themselves.

• Key employees locked up
• Transition plan for owner, especially, if they are the brand.
• Vendor agreements
• Cultural challenges
• Are there synergistic opportunities?

• Try to get involved. You may not be on the deal team but there’s a lot of work to do. Many people don’t want to do it.
• Be positives and step up. See the opportunities and long-term payoffs.
• Never be shy about volunteering.
• Has seen it on the sell side too. Some will put their resume together and gossip. Others will dive into the issue, roll up their sleeves and help. Put best foot forward for buy team. Strategic buyers will look for the best and brightest to keep.
• Don’t ever take a victim mentality.

• Good To Great: Jim Collins.