Podcasts about madison dearborn partners

On this episode of The Unlimited Podcast, Brian speaks with Michael Hyatt, one of Canada's most successful tech entrepreneurs and now a leading investor and family office principal. You may know Michael as the co-founder of BlueCat Networks, a global network infrastructure firm that was acquired by private equity in one of Canada's most notable tech exits, a commentator on the CBC News, or as a former guest Dragon on CBC's Dragon's Den. Before BlueCat, Michael co-founded and sold Dyadem, an engineering software company. He is currently Executive Chairman of cybersecurity business Datastealth and also chairs the Hyatt Family Foundation, where they focus on supporting many causes around girls' and women's health, education, and underprivileged communities.  But as you'll hear in this conversation, Michael's story extends far beyond his startup wins.Brian and Michael dive deep into entrepreneurial resilience, how to scale and exit a company, and the evolution from founder to investor. Michael shares hard-won insights from building not one but two highly successful tech companies, his philosophy on hiring, and why letting go as a founder is often the smartest move you can make. They also explore how he built the Hyatt Family Office, the disciplines behind capital deployment, and his role as Senior Advisor at Northleaf Capital Partners.The discussion takes a sharp and candid turn into Canadian policy and innovation, where Michael pulls no punches on what's holding the country back—and what leaders like Mark Carney must do to turn it around. Plus: as the first episode in a series focused on AI, Michael provides his thoughts on the future of AI, what he's seeing as a Fellow at the Creative Destruction Lab, and how he's using AI tools today to vet investments and manage complexity at scale.Michael Hyatt is a tech entrepreneur, investor, and advisor. He co-founded BlueCat Networks (acquired by Madison Dearborn Partners) and Dyadem (acquired by IHS, now part of S&P Global). He is currently Executive Chairman of cybersecurity business Datastealth, leads the Hyatt Family Office, serves as Senior Advisor to Northleaf Capital, and mentors science-based startups through the Creative Destruction Lab. Michael has been named one of Canada's Top 40 Under 40, has appeared on Dragon's Den and The Pitch, and is widely regarded as a leading voice on business growth, innovation, and capital allocation in Canada.Timestamps:0:00 Disclaimer & Intro5:32 Michael's entrepreneurial beginnings11:57 Bringing in new leadership & building tech companies21:25 Working with family25:00 Michael's views on investing30:45 How does bitcoin fit into Michael's portfolio?35:02 Canada as a business environment42:27 The creative destruction lab & AI51:51 Michael's time on Dragon's Den53:43 How is Michael using AI?56:46 Outro

In this episode we speak with Elizabeth Betten, Partner and Co-Head of Healthcare at Madison Dearborn Partners. Elizabeth was recognized by GrowthCap as a Top Woman Leader in Growth Investing of 2024. Madison Dearborn has a history in Chicago that dates back to the early 1980s when its founders built a $2.6 billion management buyout and venture capital portfolio at First Chicago Venture Capital. In 1992, the founders established MDP as an independent firm, and, since then, the firm has raised aggregate capital of over $31 billion, and has completed investments in more than 160 companies. Elizabeth joined MDP in 2004 as an Associate and re-joined after business school in 2008. Prior to MDP, she worked in healthcare investment banking at J.P. Morgan. Elizabeth supports Stanley Manne Children's Research Institute and Lincoln Park Zoo. I am your host RJ Lumba.  We hope you enjoy the show.  If you like the episode, click to follow.

This episode is sponsored by AlixPartners The Disruption Matters special podcast miniseries is back for a third season, and this year, leading industry experts discuss how private markets can best use today's technologies to create value. In this fifth episode, we discuss tech's role in recruiting, onboarding and developing talent. Along the way, we address how best to recruit Gen Z, the limits of AI in this particular arena and how tech is changing the nature of talent management as a discipline. With tech tackling so many of the rudimentary tasks around talent management, human capital professionals will be freed up to focus on the more complicated tasks around motivation, evaluation and leadership. In short, tech may make some duties simpler, but the key challenges of managing people will still need to be addressed by humans. Guests include Christopher P Trendler, managing director and head of portfolio talent at Madison Dearborn Partners; Nicole Jones, talent director, portfolio support group at Advent International; John Sander, principal, portfolio solutions at Lightyear Capital; and Ted Bililies, the global leader of transformative leadership at AlixPartners. Clips - Her. Spike Jonze, Annapurna Pictures, Warner Bros. Pictures - M3GAN. Akela Cooper, Universal Pictures

Harry Kraemer is an executive partner with Madison Dearborn Partners, a private equity firm based in Chicago, and a Clinical Professor of Leadership at Northwestern University's Kellogg School of Management. He previously served as chairman and CEO of Baxter International, a $12 billion global healthcare company. He is also the author of three bestselling leadership books and a sought-after speaker.  Harry joined host Robert Glazer on the Elevate Podcast to discuss his leadership career, why self-awareness is essential to leadership, tips for success as a CEO, and more. Learn more about your ad choices. Visit megaphone.fm/adchoices

In this inspiring episode of the Badass Women in Business Podcast, hosts Aggie and Cristy are thrilled to welcome Marla DiCarlo, an accomplished business and financial consultant with over three decades of accounting expertise and the co-owner of BizNavigators. Marla's storied career has seen her at the helm of Raincatcher as CEO and co-owner, earning accolades such as #1 Business Broker by Inc. Magazine, Best Workplace in 2020, and a spot at #376 on the Inc. 5000 List in 2021. Her leadership in the small business community is further cemented by her recognition among the Denver Business Journal's Top 50 Women-Owned Businesses.Born into a lineage of entrepreneurs, Marla's journey spans a multitude of business disciplines, including accounting, Fractional CFO services, M&A, finance, and management. Her voice is a beacon of guidance for small business associations like Inc., SCORE, SBDC, SBA, and more. Marla shares the invaluable lessons learned from her tenure as Director of Accounting for an M&A and investment group from 2000 to 2008, where she led new business deals, investments, and financing with notable groups such as Credit Suisse First Boston and Madison Dearborn Partners.The episode delves into Marla's transition from her role in mergers and acquisitions to founding a fractional CFO, accounting, and bookkeeping company in 2009, which she eventually sold to a private equity group in 2016. Marla's narrative is rich with insights into the power of decision-making, the importance of embracing risks, and the learning curves that shape a successful entrepreneurial journey.Listeners will benefit from Marla's profound advice on driving business value through financial performance, growth potential, and unique selling propositions. Her personal story of selling Raincatcher and founding BizNavigators illuminates the strategic planning necessary for a fulfilling and prosperous business exit and transition.This episode is a masterclass for entrepreneurs at any stage, offering wisdom on overcoming fear of mistakes, strategic financial planning, and the significance of understanding business financials for long-term success. Marla DiCarlo's journey from a family of entrepreneurs to becoming a venerated leader in the small business space is a compelling story of risk-taking, strategic foresight, and relentless passion for the world of business.Keep up with more content from Aggie and Cristy here: Facebook: Empowered Women Leaders Instagram: @badass_women_in_business LinkedIn: ProveHer - Badass Women in Business Twitter: @badass_leaders

This week's guest, Gina Cocking, is a highly accomplished CEO with a wealth of experience in investment banking, finance, and executive leadership. With a career that spans prestigious firms, such as Kidder Peabody, Madison Dearborn Partners, J.P. Morgan & Co., and Colonnade Advisors, Gina has honed her expertise in financial services and business operations. Her extensive background includes serving as the Chief Financial Officer of Cobalt Finance and Healthcare Laundry Systems, where she successfully oversaw the sale to a strategic acquirer. Gina's board membership at CIB Marine Bancshares, Inc. showcases her commitment to driving growth and value in the banking industry. With a strong educational foundation from the University of Chicago and multiple securities licenses, Gina brings a unique blend of strategic insight and financial acumen to her role as CEO. For her remarkable accomplishments and background, it's pleasure to pick her brain on the secrets of deals, and deal-driven growth. THE IMPORTANCE OF PREPARATION IN DEAL-MAKINGPreparation in deal-making is crucial for ensuring a successful outcome. With her extensive experience in banking and as a CFO of various companies, Gina understand the importance of being well-prepared before entering into any transaction. Companies must be organized and ready for the due diligence process, as it can make a significant difference in the success of a deal – or its failure. Being well-prepared not only increases the chances of a successful outcome, but also helps in avoiding potential issues and conflicts during the deal-making process. For this reason, Gina focuses heavily on coaching clients and potential clients on how to ready for the transactions. Preparation begins far before even engaging with an investment bank. Gina's proactive approach includes: Organizing files Digitizing documents Ensure all licenses are in order THE MINDSET OF A DEAL-MAKERWhile many may think that every businessperson thinks with the mindset of a deal-maker, you'd be surprised to learn that there are a fair few who are more focused on thinking of organic business growth. A deal-maker's mindset encompasses the ability to identify and pursue opportunities for growth through deals. Possessing a deal-maker's mindset and focusing heavily on creating deal-driven growth includes strategic approach to identifying and capitalizing on opportunities for growth through mergers, acquisitions, and strategic alliances. This mindset requires a deep understanding of the deal-making process, and the ability to navigate the complexities of negotiations and due diligence. A deal-maker's mindset also includes the ability to handle the pressures and responsibilities that come with deal-driven growth. A deal-maker must be able to handle the financial and operational implications of the deals they pursue, as well as the potential risks and uncertainties that come with them. A deal-maker should strive to be: Resilient Adaptable In it for the long-term Capable of focusing on the ultimate goal of driving business growth and value creation through successful deals THE IMPACT OF FREEDOM ON BUSINESS AND DEAL MAKINGThere are both personal and professional implications of freedom in the context of deal-driven growth and entrepreneurial endeavors, When individuals have the freedom to make their own choices, it can lead to a sense of empowerment and drive within the business. This can result in a more dynamic and innovative approach to deal-making, as individuals are able to take ownership of their decisions and drive the business forward. With freedom, however, also comes responsibility and pressure. The freedom to make decisions means that individuals are accountable for the outcomes, and this can create a sense of urgency and drive to ensure successful deal-making. To acquire Gina Cocking's team through Colonnade Advisors, be sure to check out their website, and sign up for their distribution list: https://coladv.com/ • • •For my full discussion with Gina Cocking, and more on this topic and topics not featured on this blog post:Listen to the Full DealQuest Podcast Episode Here• • • FOR MORE ON GINA COCKING:https://www.linkedin.com/in/ginacocking/http://www.site2.com Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast. Get deal-ready with the DealQuest Podcast with Corey Kupfer, where like-minded entrepreneurs and business leaders converge, share insights and challenges, and success stories. Equip yourself with the tools, resources, and support necessary to navigate the complex yet rewarding world of dealmaking. Dive into the world of deal-driven growth today!

Today, on The Courage of a Leader podcast, you can be inspired and impressed by Eric Larson, Tilia Holdings Co-Founder, Co-CEO, and Chairman.Eric's mission is to transform the effectiveness and efficiencies in the food supply industry, focusing on food safety, nutrition, and wellness, and sustainability. No small task!!Listen in to discover the innovative ways he's approaching his commitment and take away lessons that can benefit you and all leaders. About the Guest:Eric Larson, Tilia's Chairman, Co-Founder and Co-CEO, started his career as a private equity investor and business builder in 1986. Prior to co-founding Tilia in 2017, Eric established Linden Life Science in 2002, now known as Linden Capital Partners, a leading healthcare focused middle-market private equity firm. Eric was Linden's Chairman and, as its senior investment professional, developed the firm's strategy and organization.Before Linden, Eric was Executive Vice President and Managing General Partner of First Chicago Equity Capital (now One Equity Partners), which he co-founded in 1991. He began his private equity career at First Chicago Venture Capital (now Madison Dearborn Partners), where he was a Partner and Investment Principal.In addition to Tilia, Eric is involved with several technically-oriented organizations, including: the Harvard T.H. Chan School of Public Health (Member of the Nutrition Roundtable); the National Geographic Society; the Illinois Institute of Technology (Trustee and Chairman of its Institute of Design); Center for Higher Ambition Leadership (Executive Fellow); and the Commercial Club of Chicago (member). https://tiliallc.com/About the Host:Amy L. Riley is an internationally renowned speaker, author and consultant. She has over 2 decades of experience developing leaders at all levels. Her clients include Cisco Systems, Deloitte and Barclays.As a trusted leadership coach and consultant, Amy has worked with hundreds of leaders one-on-one, and thousands more as part of a group, to fully step into their leadership, create amazing teams and achieve extraordinary results. Amy's most popular keynote speeches are:The Courage of a Leader: The Power of a Leadership LegacyThe Courage of a Leader: Create a Competitive Advantage with Sustainable, Results-Producing Cross-System CollaborationThe Courage of a Leader: Accelerate Trust with Your Team, Customers and CommunityThe Courage of a Leader: How to Build a Happy and Successful Hybrid TeamHer new book is a #1 international best-seller and is entitled, The Courage of a Leader: How to Inspire, Engage and Get Extraordinary Results.www.courageofaleader.comhttps://www.linkedin.com/in/amyshoopriley/ Link mentioned in the podcastThe Inspire Your Team assessment (the courage assessment): https://courageofaleader.com/inspireyourteam/ Thanks for listening!Thanks so much for listening to The Courage of a Leader podcast! If you got inspired and/or got valuable leadership techniques you can use from this episode and think that others could benefit from listening, please share using the social media buttons on this page.Do you have questions or feedback about this episode? Leave a comment in the section below!Subscribe to the podcastIf you would like to get automatic updates...

Jai Shekhawat is the founder and former CEO of Fieldglass, a cloud-based vendor management software platform that grew to encompass users in 150 countries and more than $60 billion in annual spend, making it the largest such firm in the world. He sold a majority stake in the company to Madison Dearborn Partners, which helped expand the business before selling it to SAP for $1 billion in 2014. Jai talks about the experience from soup to nuts — fundraising, growth, selling and life after.

Jai Shekhawat has built, funded, and sold companies. Now he's investing in and advising other entrepreneurs on their own ventures. His startup, Fieldglass, has attracted funding from top-tier investors like Madison Dearborn Partners, SAP, HLM Venture Partners, and Grotech Ventures.

The values you uphold are one of the most crucial aspects of leadership. Knowing and promoting those values as a leader helps you influence and govern your team in the right direction. And by adhering to your values, you inspire others to follow and adopt them.   In this episode of Fifth Dimensional Leadership, I interview Harry Kraemer, Jr. Harry is an executive partner at Madison Dearborn Partners, a private equity firm based in Chicago. He is also a Clinical Professor of Leadership at Northwestern University's Kellogg School of Management.  In our conversation, Harry talks about leading and positively influencing people through values-based leadership.   Harry is the author of three best-selling leadership books: From Values to Action: The Four Principles of Values-Based Leadership; Becoming The Best: Build a World-Class Organization Through Values-Based Leadership. and Your 168: Finding Purpose and Satisfaction in a Values-Based Life.   Harry is the former chairman and CEO of Baxter International Inc., a $13 billion global healthcare company. He joined Baxter in 1982 as director of corporate development and was named senior vice president and chief financial officer in 1993. In the following years, he assumed additional responsibility in Baxter's Renal and Medication Delivery businesses, was elected to Baxter's board of directors in 1995, and was named president of Baxter International Inc. in 1997.    Harry graduated summa cum laude from Lawrence University of Wisconsin with a bachelor's degree in mathematics and economics. He received an MBA degree in finance and accounting from Northwestern University's Kellogg School of Management and is a certified public accountant.  Things you will also learn in this episode: Putting things in perspective through math. Three things Harry did as CEO at Baxter that drove success. Distinguishing between values and preferences What it means to be liked vs. being respected. Examples of effective communication and setting boundaries. Quotes: “It's when you get to explain things that you realize you understand it.” - Harry Kraemer   “Values are non-negotiable, must not be compromised, and should be laid out very clearly.” - Harry Kraemer   “As a leader, when you're leading, the goal is not to be right; the goal is to do the right thing.” - Harry Kraemer   “This whole idea of leadership has nothing to do with titles and organizational charts, but it has everything to do with the ability to influence people.” - Harry Kraemer   “The more you know about any topic, the more you know how little you know. - Harry Kraemer   “You can learn something from every single person you encounter, and when that light goes on and you realize how much you can learn by every encounter, it changes your life.” - Harry Kraemer   “Develop a balanced perspective… seek to understand before you are understood.” - Harry Kraemer

In this episode of CEO Perspectives, The Conference Board President and CEO Steve Odland sits down with Harry Kraemer, professor at Northwestern University's Kellogg School of Management and executive partner with Madison Dearborn Partners, one of the largest private equity firms in the US. Odland and Kraemer take a deep dive into all things “board”: how to get on one, how to get up to speed once you've landed a coveted spot, and what makes for a great board member. Tune in to find out: The qualifications of a board member The best ways to go about getting on a board The boundaries between operations and the business judgement of the board Governance principles in public and private companies

In December of 2021, Madison Dearborn Partners acquired Zilliant as a strategic growth investment. John Lewis, an executive partner at Madison Dearborn, became Zilliant's executive chairman following the closure of the deal.     We were excited to welcome John for his first appearance on B2B Reimagined to discuss everything from his prolific professional background to his enthusiasm for Zilliant's value proposition (“You will not find any CEO in the world for whom this is not a top three issue…how to price effectively, how to optimize revenue, profitability, margin and volume”) to his thoughts on what will define the winners of this unprecedented era.  www.zilliant.com

Before you sell your company, even the odds. This episode features guests Mark Achler and Mert Iseri, authors of the recent book, Exit Right: How to Sell Your Startup, Maximize Your Return and Build Your Legacy. Exit Right demystifies how to conclude the startup journey, a perfect complement to our podcast, which focuses more on the exits of larger middle-market companies. As Brad Feld states in the Foreword, “Mert and Mark set the roadmap for how entrepreneurs and business owners can proactively manage the process of getting to a successful exit along the way”. As Jeff says at the start of the interview: Mark and Mert cover so many great informative topics in the book. There is a wealth of tips to guide business owners through what can be a tumultuous process, getting through the exit. There are also so many topics we align with: relationships matter most, planning for wealth, time kills all deals, and the importance of following a best-practice process.  In this podcast episode, we focus on three topics with a lot of meat to each:  FAIR, Mert and Mark's framework for a successful exit, (3:00)  The“Exit Talk” and how we suggest that all companies adopt this practice with their board (15:00), and Who is involved in the Exit Talk and why? (28:00) What is FAIR? Why does it lead to the best transactions? (3:00) Mert: What we realized as we started to gather stories and experiences from M&A bankers, lawyers, serial entrepreneurs, etc is that the real question isn't, “Let's find out who's going to pay the most.” The real question is, “What's the right home for this business? What's the right home for my people? What's the right home for the vision? Who is going to serve our customers the best?” Our view of an exit went from being a short-term transaction to a long-term partnership. The term “exit” is a poor word choice.  You're not really exiting anything. If anything, it's the beginning of a brand new relationship. So when we ask ourselves, “What makes a great home for a startup?” we focus on these four elements that make exits great. FAIR. Fit, Alignment, Integration, and Rationale.  If you have all four of those, it just so happens that you've also found the person who's willing to pay the most for your business, because they will realize the long-term value and they'll price the deal accordingly. Fit is the cultural fit between the two companies. Amazon and Zappos are a great fit. Time Warner and AOL, are probably not a great fit. It's easily described. Can you sit next to this person for four hours and not want to kill them by the end of the meeting? Can you actually make decisions without written rules? Are cultural values aligned? Are the DNAs sort of similar, cousins to each other between those two companies? Alignment is about being aligned with your co-founders, board, and shareholders in terms of the direction of where you want to go. The acquiring company also must be aligned.  We almost always dismiss the alignment that we need from all sides of the table. This isn't two sides looking at each other. This is two sides looking in the same direction. Integration has to do with the plan for how these two companies will come together. We've seen so many examples of this plan of integration being done as an afterthought. It's not just product and sales integration but people integration, finance integration; many, many layers. And all of these stakeholders have different agendas that need to be individually managed.  Rationale. Can you explain to your grandmother why this acquisition makes sense? How are we going to deliver more value to our customers as a result of this partnership? How is two plus two equal to 100 in this context? Mark: There are profound financial implications to the FAIR framework. Let's take Integration. Integration is the ugly stepchild. People always say, “Oh yeah, we'll deal with integration afterward.”  Turns out that in many transactions, it's not always 100% cash. Sometimes there's an earn-out for future performance. If you're not integrated well (you don't have the resources you need to execute your plan), there are some significant financial implications to the earn-out. Then there are the financial implications to Rationale. Transactions are typically based on looking backward using a multiple. When you create a rationale that says one plus one equals a hundred, if it's a strategic investment, you take your product and we plug it into the larger company's sales force or the larger company's customer base. What could we do inside the larger company? What's the impact of your product on the larger company? The way to maximize value is not looking backward as a multiple, but looking forward using the rationale. Strategically, why is the combination so valuable? If you can get everybody aligned around the rationale and the financial implications of that rationale, that's how you're going to drive a better price for an exit. Mert: No one's going to just sit down and tell you, “This is our rationale.” You uncover it. You unearth it over years. That's why we urge entrepreneurs to put their party dresses on. Talk to many competitors. Talk to strategics. Get out the door. You need to build this trusted relationship over time with fundamental questions. How can I help? How can I help you push your agenda forward? How can I help my customers? This is what great partnerships really look like. We're not saying go share your financials with your competitors or give away all your IP to a larger strategy, but you need to be that trusted partner that advances the mission on all sides and creates a situation where everybody wins. Mark: We wrote the book about exits, but it turns out that the decisions that entrepreneurs make at the beginning of their journey have an outsized impact at the end of the journey. Even though this book is really about the exit, there is really good advice there about the beginning of the journey as well. Jeff: That's exactly right. This book is really about the journey.  All of the steps on the journey influence the end. There's so much wisdom in the book and insights about all the things that you can do to proactively get to the right end. Management meetings are oftentimes the first time that business owners meet their potential acquirers, whether they're competitors or strategics, or investors. But the longer that relationship can be developed, the more that you can uncover in terms of the shared common goal of what can we do together. And the best valuation and the best terms will just naturally evolve. What is an “Exit Talk”? How can founders use it to reach alignment in their boardrooms? (15:00) Jeff: The Exit Talk really struck a chord with me. Let's encourage clients and future clients to have these discussions and this thought process through the FAIR framework to really think ahead. Sometimes we as investment bankers get brought in late in the game. But most of our transactions and our best relationships really span years. We get to know the business, the goals, and importantly the people involved, the operators, the owners, the founders, and the investors. Some of these relationships for us span a decade or more. We give them advice on how to grow their companies. This concept of an exit talk is missing from my perspective. Exit discussions are often secretive or clouded in secrecy. It is a very small universe of folks within a company that knows that a transaction is imminent. It's rarely discussed openly among the senior leadership team until late in the game. What you guys propose is proactive. Through your work and sharing your work with my future clients, I'd like them to embrace this philosophy. I love this quote that you said, “Instead of fueling the awkwardness of the exit topic by staying silent, we are putting forward a new norm that we believe the entire industry should adopt, which is the Exit Talk.” Mark: This is one of our favorite topics. But before we dive into the Exit Talk: We are such big believers in trust. Every deal has its ups and downs. It has its emotional turbulence, it's the journey. Trust is the lubrication that gets deals done through to the conclusion. I just wanted to put a fine point on that topic of trust because it permeates everything we do. The Exit Talk.  It turns out that there's a stigma to talking about exits. CEOs are afraid. They're afraid that if they bring up the topic of an exit that their board and their investors are going to think their heart's not in it. They've lost hope. They've lost faith. In the Venture Capital or Private Equity world, we have a time horizon. When you take our capital, you take our agenda, and you take our time horizon. We're looking for X return over Y timeframe. And if you're in year one of a fund, we've got plenty of time.  Let's go build and grow. If you're in year 10 of a fund, we've got to start returning capital back to our LPs. With the Exit Talk, what we're proposing is that once a year, maybe your first board meeting of the year, you have a regularly scheduled annual talk where the CEO, without fear of being perceived as their heart's not in it, can talk about the exit. The reason it's so incredibly helpful is that you have the luxury of time. If you had 18 months or two years, you have the luxury of saying, “Who's going to be the most likely acquirer? Is it going to be a strategic acquirer? And why? Who is it and why would they want to acquire us? Or is it going to be a financial buyer and what are they looking for? Are they looking for top-line revenue?”  If we're going to sell to somebody who really cares about growth, we may invest a little bit more heavily in sales and marketing. If it's somebody who is more financially oriented and really cares about EBITDA, we might tighten the ship and focus on profitability.  It gives you the luxury of time to get your intellectual property in order, make sure that every single employee has a signed agreement, and make sure that trademarks and patents are filed appropriately. Get your data room pristine. If you have the luxury of time, you can optimize and present your business. And you could take the time to find the best bankers and attorneys who really are going to represent you well. Mert: An outcome of this talk doesn't necessarily have to be “we're ready to sell, or we're not ready to sell”. It can also be an opportunity to start prototyping some of the theories around how you add more value to your customers. This is a great centerpiece for what we believe an exit should be reasoned around. This will help our customers faster/better than what we could do on our own by just raising more money or gathering more capital or resources. For instance, if you are going to have a strategic alignment with a larger company like Google, but you're not ready to sell, it's still an opportunity to start a relationship. Maybe we work on a mutual customer together. Maybe we create some content together where we tell our stories and we share our wisdom with theirs. You want to start charging up that trust battery over time. When you are ready, you are a known entity. The reality is these M&A (Corporate Development) leaders want to buy companies from trusted entities. They don't want an egg on their face either. They want to know the company that they're investing in. They're not viewing this as an acquisition, they're really viewing it as an investment. They want to know they can trust you. They want to know that you can go the distance. It's a really difficult thing to do to create that kind of trust. You're not going to rush through trust. You're going to build it incrementally over years. Even the identification of a strategic partner when you're not ready to sell is extremely valuable because that's an opportunity to generate a relationship. Find out what their priorities are. See if your solution helps move those numbers forward.  Mark: We're big believers in empathy. We have an empathy framework. There are three rules of empathy: 1) It's not about you. It's always about the person sitting across the table from you. 2) Do your homework.  Deeply and truly understand what's important. Mert just said, “Go listen to the quarterly earnings report.” They're going to tell you what they care about. 3) Bring a gift, add value. When I say bring a gift: what can you do? If you're an industry leader, provide some thought leadership about where the market's heading. Share new bits of technology. Not only can you gain knowledge about their strategic direction, you can also share knowledge and be thought of as a trusted thought leader.  If you take those empathy rules and apply them to building relationships over time, that's how you're going to earn trust. Jeff: I love the idea of a trust battery and charging that up over time. You can't do that overnight. You can't do that in one management meeting. You can't do that in a really compressed timeframe. You really need to start early and think about what you can bring to the table. What can you bring as a gift to add value to somebody else so that they can see the value in what you are bringing?  That's really the roadmap that you guys layout in your book: what steps can we take proactively to get to the best outcome. Who is involved in the Exit Talk, and why? (28:00) Mark: Let's separate out the annual exit talk from an actual transaction process. The exit talk is a board of directors-level conversation. Maybe you bring in one or two top lieutenants into that conversation, depending on the relationship between the CEO and maybe one or two C-suite members. But that's a board-level, strategic conversation that's not for the whole company. (For an actual transaction process), there are lots of different ways of handling it. My own personal opinion is that there is a dance that takes place starting as an aperture that broadens over time. One of the challenges with telling any employee about a transaction is human nature. “What's that mean to me? Am I going to have a job? Am I going to get fired? Am I going to become rich? What are my stock options worth?” One of the challenges is that not all deals happen; deals fall apart all the time. So the team has to have their eye on the ball. For the CEO, when they're going through a transaction, it can be all-consuming.  We've seen instances where companies started slowing down, missing their numbers because the CEO was distracted and not focused on running their business.  The way I think about it is starting with the CEO and the board, keeping a really tight circle of information. And then as the conversations start to broaden and deepen in a transaction, then people are going to start the due diligence process.  Make sure your C-suite is involved and your executive team is involved. The people who are going to be part of the due diligence process, obviously you're going to have to inform them. I don't think it's a great thing to just wake up one morning and say to your entire employee base, “Hey, guess what? We just got sold.” There's a middle ground someplace in that continuum. Try to keep it confidential through most of the process. As you start to get to certainty you need to start opening it up so it's not a surprise to everybody. Mert: There's one major stakeholder that hasn't been discussed and I just want to bring that up, and that's your family. Most founders overlook that and think of this transaction as a business event. This is a life event. Your family is a humongous stakeholder. We want to highlight that this is a critical component of whether an exit happens or not. What's happening with your family is just as important as what is happening with your board and other stakeholders. Mark: I couldn't agree with you more. It's not just us, it's our families and our loved ones too that have a stake in this. Jeff: It goes for all key constituents, starting with the family and then moving down to the board members and the C-suite and figuring out what's the right communication style and method and frequency. These things are really critical decisions that most folks don't really spend the time thinking about. Mark: One of the questions we ask CEOs is: when you're done with the transaction, will your employees come back to work for you in the next company you start? Will your investors want to invest in you in the next company you start? Will the biz dev lead of the large company who goes on to the next company, are they going to want to buy your next company? I think what many entrepreneurs fail to understand is that the relationships you build and your legacy live on way past the deal and the transaction.  We're big believers in servant leadership and that the best CEOs don't view life as a zero-sum game. They make sure that they take care of their customers, their employees, and their investors. They try to find the balance of supporting all relationships over time. ABOUT OUR GUESTS While a successful entrepreneur may exit a handful of companies in their lifetime, large buyers close deals all the time. Without decades of experience in mergers and acquisitions, founders don't have the tools they need to get the best results for themselves, their teams, or the new parent company. Through dozens of interviews with M&A leaders at the biggest Silicon Valley acquirers—as well as attorneys, bankers, and founders who have been through the trenches—Exit Right delivers the hard-earned lessons that lead to successful exits. From negotiation to valuation to breaking down a term sheet, managing legal costs, and handling emotional turbulence—this unparalleled guide covers every critical aspect of a technology startup sale. Learn where deals get into trouble, how to create alignment between negotiating parties, and what terms you should care about most. Above all, learn how to win in both the short and the long term, maximizing your price while positioning your company for a legacy you can be proud of. Author Biographies An early employee of Apple and Head of Innovation at Redbox, Mark Achler has been creating and investing in tech startups since 1986. Today, he is a founding partner of MATH Venture Partners, a technology venture capital fund, and an adjunct professor at the Northwestern Kellogg School of Management. Mert Iseri co-founded SwipeSense, a healthcare technology company acquired by SC Johnson in 2020. Prior to that, he co-founded Design for America, a national network of students using design thinking to create social impact, now part of the IBM Watson Foundation. He is currently an Entrepreneur in Residence at MATH Venture Partners. Socials Mark Achler Mert Hilmi Iseri Book About the hosts Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc. Gina received her BA in Economics and an MBA from the University of Chicago. Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million. If you enjoyed this episode, please subscribe and consider leaving us a short review:

This episode continues with our “industry spotlight series” where we focus on specific trends and opportunities in middle-market M&A transactions. Our previous episodes have covered four industries in which Colonnade has played a significant role as an M&A advisor to both buy-side and sell-side clients. We add F&I Agencies & Payment Plan Providers as industries where we deeply know the dynamics and players so as to provide exceptional service to clients who hire us to assist them in a transaction. Colonnade has studied the F&I Agencies and Payment Plan Provider markets for the last 20+ years. We have worked on nearly 30 M&A transactions on the buy-side and the sell-side. We have gotten to know the industry players and the buyers. We've identified some high-opportunity M&A plays that could help to drive even more value, scale, and customer satisfaction in the industry. Spotlight on F&I Agencies (1:00) In this first part of our episode, we answer the following questions: Where do F&I agencies sit in the F&I ecosystem? (1:00) What does a typical F&I agency look like? (7:00) What is going on in terms of M&A and what are the value drivers in the industry? (9:00) What is driving M&A transactions right now and what are some potential M&A plays? (12:00) Where do F&I agencies sit in the F&I ecosystem and what value do they provide? (1:00) Gina: Between the F&I administrators and the F&I office and the dealership, there are F&I agencies. They are independent agencies with independent agents. They are like insurance agents. They bring together the product administrators and the dealers.  Gina:  The agents have deep knowledge about the products they represent. They can train the F&I office on those products and how to sell the products. They also act as the middle man or the interface with the administrator. They are one distribution arm for the administrators, which makes them critical in the ecosystem. They are a valuable component of the overall F&I ecosystem. Jeff: The F&I agency is a particular point in the value chain. It's a differentiator. Some administrators sell to dealers through a direct sales force, others use F&I agents.  Gina: There are administrators who go direct to dealers, but most administrators also use independent agents. They may have a direct sales force, but they have independent agents also. The only sector where that seems to not always be the case is selling into independent dealerships. You tend to see more direct agents that are employed by the administrators selling into the independent dealerships. Gina: An important component of what the agents do is help the dealership with reinsurance. Reinsurance is an important component of a dealership owner's profits. For every contract, every F&I product that is sold, there is a reserve set aside for future claims. F&I agents are usually very fluid and educated in talking about reinsurance and making sure that the dealership has the right reinsurance programs. So they deal with reinsurance, they do training on products, they do training on how to sell products. They sometimes help with staffing in the F&I office, and they'll help with some of the technology that is between the F&I office and the administrator. Gina: F&I represents a third of a dealership's profits. Everybody within the organization and affiliated with the organization is going to make sure that F&I runs smoothly. What does a typical F&I agency look like? (7:00) Gina: There are well over 100 independent agencies, and approximately 75%-80% of F&I agencies are less than 10 employees. There are very few large agencies. There are a few that are scaling, but there really aren't many. There is only one national agency that comes to mind and that's Vanguard (owned by Spectrum Automotive). Vanguard has been very acquisitive in building out its agent network. We also see Brown & Brown, which is a P&C insurance brokerage. They've been acquiring F&I agencies over the last few years. I don't know if they have a national footprint yet, but they're probably getting pretty close. And then you have acquired a lot of small agencies. ​​Jeff: The Brown & Brown example is an interesting one that we've watched over the last five to six years as they've entered the industry. We've always thought their participation in the F&I agency world makes a lot of sense, given the parallels to the P&C distribution market. What is going on in terms of M&A and what are the value drivers in the industry? (9:00) Gina: We think that the M&A market for F&I agencies will continue to be hot in 2022. (See Gina's cover article in Agent Entrepreneur, 2022 M&A Predictions for F&I Agents) Agent value is driven by a couple of different factors. One is diversification. One of the challenges for these small agencies, just like any small company, is having all of their eggs in one basket. An F&I agency may have one dealership group that represents 40% of sales. That is a gating factor to trading and getting the highest possible value. Agencies that have significant concentration, which I call greater than 15%, trade at a lower multiple than agencies that have little concentration. Another value driver is size. We look at the number of W-2 employees (as well as financials). Jeff:  Important when you go to sell these companies: Who owns the dealer relationships? And what's the risk of attrition in a transaction? Gina: A lot of diligence needs to be done in these transactions to really understand the nitty-gritty of who, not just on paper but in practice, owns the relationships. What is driving the M&A transactions right now and what are some potential M&A plays? (12:00) Jeff: It sounds like an industry that could be rolled up further. Following the playbook of the P&C insurance distribution market, you got a lot of mom and pops out there and a few large players.  Gina: Both Brown & Brown and Vanguard Dealer Services (Spectrum Automotive) are rolling up agencies. The rest of M&A activity we see is not a roll up, but administrators buying agencies. National Autocare and Portfolio Group have been very inquisitive. There are many other administrators who bought one, two, three agencies, as they attempt to lock in their distribution channels.  Gina:  There should be another roll up of F&I agencies. There should be a private equity firm that's coming in here saying, “I'm going to put a hundred, $150 million to work and we're going to leverage it. And we're going to buy up 20 F&I agencies. We're going to make a super-agency with national coverage.” That could be uber-successful for everybody involved. It just hasn't happened yet. Jeff: The folks that are acquiring are paying pretty high multiples, and that's a challenge. Any new entrant would have to go in and go big pretty quickly. They'd have to find a platform that they can scale and put a lot of capital to work while holding their nose as they pay big prices upfront. Gina: A lot of the M&A activity we have seen is with an older generation that is retiring. There's also some leakage happening where the younger, talented, hungrier F&I agents are like, “I get it, I can do this.” They leave and go start their own agency. I think we'll see that next-generation starting to trade in about a year or two. Gina: I have one last point I want to cover about F&I agency M&A: what's driving the activity. First of all, there's a lot of money looking for deals. There are private equity firms backing administrators that need to grow inorganically. But we also see a lot of M&A activity at the dealership level. They're getting bigger. Big dealership groups are buying up other dealers, independent shops, and dealership groups.  Every time one of those transactions happens, the agent that represents the target dealership is at risk of losing that client. Dealership M&A is driving F&I agency M&A. I think that this is the question that keeps a lot of agents up at night: Are they one or several M&A transactions away from losing a significant portion of their relationships and their livelihood? Spotlight on Payment Plan Providers (18:00) In this second part of our episode, we answer the following questions: How do payment plan providers add value to the auto F&I sector? (18:00) How big is the industry and who are the biggest players? (23:00) Why are payment plan providers a favorite industry of Colonnade? (25:00) What is going on in terms of M&A and what are the value drivers in the industry? (29:00) How do payment plan providers add value to the auto F&I sector? (18:00) Jeff: Payment plan companies came out of the ground around 20 years ago. They started as an offshoot of the insurance premium finance market, which we've talked about in a previous podcast. Fundamentally, this market is designed to help consumers purchase F&I products cost-effectively. Whether you're in a dealership (point of sale) and the F&I person says, “This VSC is going to cost you $3,000” or whether you get a piece of mail about an extended auto warranty (aftermarket), once you get sold on buying the coverage, the questions is always: Do you want to write a check for three grand or do you want to finance it over two or three years?  In most cases, the VSC/extended auto warranty gets financed. That's where these payment plan companies come in. Jeff: At the dealership (point of sale), the payment for an F&I product typically gets rolled into the auto loan. It's just one of the line items in the auto loan, and you (as the consumer) pay it off as you go. There are some payment plan providers that focus on point of sale at the dealership, allowing a consumer to finance the product outside the auto loan. In the aftermarket, which is really where we see these payment plans flourish, it's a different dynamic. If you're on the phone with a direct marketer and you agree to buy the coverage, you can put 10% down and pay over 18 or 36 months, depending on the payment plan. Interestingly, they're interest-free and cancelable at any time. And as you continue to drive your car and assess the usefulness of the product, you can cancel it at any time. If you cancel it, all you do is call up the seller or the administrator and say, “I want to cancel my payment plan.”  In that case, you get a portion of your money back (the unearned premium). It works in a similar way to the insurance premium finance market. The contract is earned over the life of the product. If it's a five-year product and you're one year into it, you might get 80% of the money back. The payment plan company is indifferent because it will just get their pro rata share back from the administrator and seller. The seller will sell the product to the consumer, and if they attach financing to it, the seller will collect the 10 or 15% down payment. The payment plan company will insert themselves and front the rest of the money to the administrator and to the seller. The administrator has to front some money to the CLIP (1) provider, but the revenue to the seller and the admin fee gets fronted by the payment plan company. Jeff: Our Industry Report on this sector goes into much more detail about the industry. How big is the industry and who are the biggest players (23:00) Jeff: We estimate this is about a $5 billion a year originations market. There's not good data. We've done a number of studies over the years and think that's the size of the market. It grows with auto sales and the adoption of products. It's grown considerably over the last several years. There are probably 10 independent players in the market. There are just a small handful of large players. The biggest players are PayLink, which is owned by Fortress and Milestone. Walco is the next biggest, and they're growing nicely. This is the Walder team that previously ran Mepco and Omnisure, and they've started up a new finance company that's growing quite rapidly. Mepco is a large player, they're top three, that's owned by Seabury. There are other smaller players like Budco, Line 5. Service Payment Plan is a big company in the dealer space, again different dynamics but similar product offering. PayLink, Omnisure, and Mepco really dominate the aftermarket space. Folks like Service Payment Plan dominate the dealer (point of sale) channel. Why are payment plan providers a favorite industry of Colonnade? (25:00) Gina: I love the payment plan business because it is so low-risk. What the payment plan companies do is hold a cash reserve on each funding in case the underlying consumer cancels. And that happens. There are a lot of cancellations in the direct consumer marketing of vehicle service contracts. As we've discussed before, it's not because the contracts are bad contracts, but it's because consumers actually have transparency. In the case of vehicle service contracts rolled into an auto loan, consumers don't get a breakout every month of the components of their auto loan that they're paying. They don't see that 80% of your auto loan payment is for the car, 10% is for the vehicle service contract, et cetera, cetera. But when a consumer is financing or using a payment plan for a vehicle service contract in the aftermarket, they have complete transparency as to what that cost is for. And if they decide as a household, they no longer need that product (they need to redeploy that payment to something else like their mortgage), they can cancel. The payment plan businesses have a cash reserve for this. So it is a very low risk business and has great returns. Jeff: Some of these companies have several hundred million dollars of portfolio and each contract starts out at $3,000 and burns down. These are very granular portfolios. You're not going to take a big loss on any particular contract. Unlike the insurance premium finance industry, the incidence or likelihood of fraud is negligible, and the risk here is quite low given the granularity. We like the short duration of these assets. We like the low loss rates. Generally, these transactions are priced at a 15% to 20% unlevered return. They're very high-yield. There's no credit risk. We're not doing anything with consumer credit risk.  We really don't care. We're just managing relationships with sellers and administrators. All those dynamics are favorable to this lending universe. I love this business. It's a niche industry, $5 billion is not the $50 billion commercial P&C market, but it's meaningful and growing. What is going on in terms of M&A and what are the value drivers in the industry? (29:00) Jeff: There really hasn't been much activity as there's a limited universe of players. Some of the administrators are vertically integrating and getting into the payment plan industry. We worked on the initial sale of Mepco to Independent Bank almost 20 years ago. We sold PayLink (which used to be called Warranty Finance Company) to Oxford Financial. It's now owned by Milestone and Fortress. Omnisure: Ed and Paul Walder started up that business from scratch and grew it to a couple hundred million dollars of receivables. We advised on the sale to Fortress.  PayLink and Omnisure merged in 2017 and put together two leading players in the industry. The other important transaction to mention is Seabury's acquisition of Mepco out of Independent Bank in 2017.  Most recently Walco has come out of the ground. Walco was started in early 2020 by Ed and Paul Walder again, starting up another competitor in the sector. They've grown considerably in recent years and are doing a great job building out that business. We don't see a ton of M&A activity per se, but it's a really interesting market. Part of the challenge from an M&A perspective is that there has not traditionally been a deep bank buyer universe of this product and that confounds me a bit. For all the reasons we mentioned, this is a really interesting, dynamic asset class. It's very similar to insurance premium finance, which has a number of large banks in the sector and a number that want to get into it.  The collateral structure looks very similar, except that payment plan providers have higher yields, higher return on assets, and even lower losses. And there's no fraud. I think there's a real opportunity for forward-thinking banks to embrace this asset class and do quite well with very little risk. (1) A CLIP is a commercial liability insurance product that covers the contractual obligations of the insured. A full reimbursement CLIP would indemnify the insured commercial entity for all monies it expends to fulfill a contractual commitment.   About the hosts Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc. Gina received her BA in Economics and an MBA from the University of Chicago. Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering.

Greg Peters has led Zilliant for nearly 20 years as president and chief executive officer. He makes his long-awaited debut on the podcast to tell us why right now is “the most exciting time since I've been in the company.”   In these 20 years, Greg has helped navigate Zilliant and its customers through economic ups and downs and seismic go-to-market shifts. Most critically, Zilliant was the first price optimization software provider to transition to 100% cloud-native SaaS nearly a decade ago. In this episode, Greg has a candid conversation with Chief Marketing Office Lindsay Duran on the thinking behind that fruitful decision, Zilliant's recent acquisition by Madison Dearborn Partners, his take on the future of intelligent commerce in B2B, and much more.   Register for MindShare 2022 www.zilliant.com

Today, I am so excited to introduce you to Marla DiCarlo, Co-Owner and CEO of Raincatcher, which helps business owners buy and sell incredible companies. She shared some amazing insights on what it takes to get sellers to want your business and what practices to integrate into your business from day one! In this episode: How to integrate thinking about your business's exit from inception so you can maximize your impact Marla's journey from social worker to CEO of Raincatcher Why it's important for you to integrate an exit strategy into even the beginning stages of starting a business Marla's 8 Value Drivers that your potential buyers are going to be looking at The power of process flowcharts and how to use them in your business What the Switzerland structure is, what customer/employee/revenue concentration are and why they're important Why growth potential and differentiation are crucial when you want to grow and sell your business Marla's best advice for you to consider for the long-term well-being of your coaching or consulting business Why creating an impact is near to Marla's heart and how Raincatcher contributes to the small business community and how she can support you Marla DiCarlo is an accomplished CFO and business consultant with more than 30 years of professional accounting experience. As co-owner and CEO of Raincatcher, helps business owners get their business ready to sell so they find the best buyer and get paid the maximum value for their business. Marla has a Bachelor of Science in Accounting and is a member of several professional organizations. From 2000 to 2008, Marla worked as Director of Accounting for an M&A and Investment group that specialized in the purchase, capitalization, and management of real estate and businesses in various industries. While there, she was responsible for new business deals, investments, and financing. She worked with groups such as Credit Suisse First Boston, ISS Group, Venture West Group, and Madison Dearborn Partners. In 2009, she opened Kaizen Business Results, a fractional CFO, accounting, and bookkeeping firm, to help small business owners understand the story behind their numbers and get to the next level. Marla is an accomplished speaker and has taught classes with her local SBDC and SBA, plus various lenders, and banking institutions. As a serial entrepreneur and small business owner, Marla has helped over 500 small business owners to grow and scale their business. "From day one, you can start to work on reducing owner dependency for the future by documenting processes and putting systems in place." — Marla DiCarlo To learn more about Marla and her work, check out her website. You can also connect with her on Facebook, Instagram, LinkedIn, and Twitter. Let's meet Marla DiCarlo. Marla DiCarlo Show Notes

Brent Grinna began his career in investment banking in Chicago at William Blair & Company and then Madison Dearborn Partners. Prior to founding EverTrue, he received his MBA with honors from Harvard Business School.With Brent's leadership, EverTrue participated in Techstars Boston, was selected as a winner of MassChallenge, and secured top investors, such as Bain Capital Ventures. Brent serves as a Board Member for the Brown University Alumni Association Board of Governors and Board Director for the Brown Football Association. He lives in Rhode Island with his wife and three boys.

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This episode continues our series of "industry spotlights," in which we focus on specific trends and opportunities in middle market M&A transactions. This episode focuses on the automotive reconditioning industry, a $5.4 billion industry that is highly fragmented and ripe for consolidation. Colonnade has extensive transaction experience in the automotive services industry and has been the sell side or buy side M&A advisor on many of the automotive services industry transactions that have taken place over the last decade. Colonnade has insider-level mastery of the drivers of valuation, competitive positioning, business trends, relevant metrics, and the right buyer universe, enabling us to provide superior deal execution to our clients. Colonnade recently published a white paper on the automotive reconditioning industry. The white paper is available here. In this episode, we answer the following questions: What is automotive reconditioning? Why do automotive dealerships outsource reconditioning? What is the industry size, and who are the largest participants in the industry? What are the value drivers for automotive reconditioning companies? What are the M&A trends in the automotive reconditioning industry?   What is automotive reconditioning? (02:10) Gina: Automotive reconditioning is the process of making a newly acquired vehicle retail-ready. Dealerships get cars in a couple of ways. On the new side, they get it directly from the OEMs, and on the used side, they may be buying it from auctions or taking vehicles as a trade-in. Used vehicles need to be reconditioned to be car lot ready.   Do dealerships have an in-house reconditioning department? (04:17) Gina: The majority of dealerships outsource reconditioning.   What is the size of the automotive reconditioning industry, and who are the industry participants? (05:01) Gina: We estimate that the automotive reconditioning industry is a $5.4 billion market. It is comprised of mainly single technician entrepreneurs, a technician who is skilled in a specific trade. When a dealership outsources reconditioning, they are probably outsourcing it to three to five reconditioning technicians that are independent contractors.   What types of dealerships typically outsource automotive reconditioning versus having it in-house? (06:25) Gina: The largest dealerships are the most likely to outsource because they realize how inefficient it is to have highly paid employees reconditioning cars.  They could use that time doing much more valuable service lane work. Independent dealerships and smaller dealerships tend to have automotive reconditioning done in-house.   How many companies are in the automotive reconditioning industry? (07:50) Gina:  We don't really see many companies of scale. Based on the number of dealerships out there, we estimated as many as 40,000 independent technicians nationwide doing this type of work.   Why do dealerships outsource automotive reconditioning? (09:57) Gina: Skilled technicians are expensive and in high demand at dealerships. Outsourcing automotive reconditioning helps to keep up the profitability of the dealership.   Why do dealerships need to make vehicles retail ready as quickly as possible? (10:30) Gina: New and used vehicle supplies are low, and demand is high. Low supply and high demand are driving prices of cars to an all-time high, so dealerships need to get vehicles retail ready as quickly as possible.   How do dealerships manage relationships with multiple outsourced automotive reconditioning vendors? (13:02) Gina: It is a lot of process management, and there is some software to manage the process, but still, managing five different vendors is inefficient, especially if the dealers do not control their daily activity because they are independent.   Who are the largest participants in the automotive reconditioning industry? (14:05) Gina: The largest in the industry is Dent Wizard. Some companies, such as Streamline Recon, are located in large metropolitan markets, and they may have some scale. But, aside from these companies, there are not many companies of scale. This industry is very fragmented.   What systems or processes do automotive reconditioning companies need to scale up? (16:16) Gina: There are a couple of reconditioning workflow management software available, which seem to be critical to any dealership technician relationships that they want to run efficiently. There is room for the adoption of robust workflow management software in the reconditioning process.   Does automotive reconditioning include fixing a vehicle's mechanical issues? (18:00) Gina: The mechanical part, making sure the car runs without banging noises and that it starts and stops, is all done before it gets to the reconditioning center. Automotive reconditioning is all about appearance.   How does the collision center industry compare with the automotive reconditioning sector? (19:10) Gina: The collision industry is a very different market. The work is largely being paid for by insurance companies in the collision industry and has nothing to do with dealerships. So, you do not see collision centers doing reconditioning work very often. They are very separate businesses.   What are the value drivers for automotive reconditioning companies? (20:38) Gina: Value drivers include size, number of employees, scale, and diversification of revenue. Also, process management is an important component.   What are the M&A trends in the automotive reconditioning industry? (22:34) Gina: We will see quite a bit of M&A activity in this space over the next decade. It is a profitable industry that is important to dealerships. Dealerships outsource automotive reconditioning to several vendors, which is inefficient in terms of process management. Automotive reconditioning companies that can do it all for dealerships will be the winners.     Host Information   Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Brookfield, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses.   Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families.   About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.

My guests today are Daniel Goldberg and Tim Schlidt, founders of the Palo Santo fund. The two them an their really impressive team got a big plan for the coming years: investing across the new psychedelic ecosystem and funding a new paradigm in well being.Palo Santo's diversified investment fund is helping to increase the supply of clinically effective and accessible mental health and addiction treatment solutions needed in today's world. Daniel Goldberg began seeing mental health as part of a spectrum and not something that needs to be so pathologized.As a founder of Palo Santo and Bridge Investments, Daniel has been actively investing with and supporting inspired entrepreneurs for 20 years. Years ago he saw the transformational potential of psychedelic medicines and has developed a deep network of relationships across the psychedelic research and business communities. His passion for the space is purpose‐driven and science informed. He is thrilled to be a part of Palo Santo's mission of supporting promising treatments while ensuring widespread access to safe, legal, and effective solutions. Tim Schlidt brings extensive knowledge investing across life sciences and healthcare services, and has held a lifelong passion for understanding and improving treatments for CNS disorders. He believes psychedelics are poised to shift the paradigm in mental health treatment and his primary mission in co-founding Palo Santo is to invest in companies and solutions that allow for broad access to those most in need of mental health care. Prior to co-founding Palo Santo, Tim covered the life sciences and health care services sectors as a private equity investor at Madison Dearborn Partners and an investment banker at J.P. Morgan and Greenhill. We talk about Daniels and Tims personal psychedelic experience they had BEFORE the founding of Palo Santo, the shift and the incredible change they saw coming, when a new generation of scientists engaged in psychedelics, about the psychedelic pharma model and what compound is Daniels and Tims favorite and we chat about what will possibly be happening and what I will see, if I would dare to take 5 MEO DMT: but that will happen on the next episode. https://www.palosanto.vc

This episode continues our series of "industry spotlights," in which we focus on specific trends and opportunities in middle market M&A transactions. This episode kicks off several episodes around the finance and insurance ("F&I") products industry, estimated at $80+ billion in size at the retail level. Specifically, this episode is all about vehicle service contract ("VSC") administrators.   Colonnade has extensive transaction experience in the automotive F&I products industry and has been on the sell side or buy side M&A advisor on many of the significant F&I products transactions that have taken place over the last decade. These transactions are complex and require an investment banking team with deep industry knowledge. Colonnade has insider-level mastery of the drivers of valuation, competitive positioning, business trends, relevant metrics, and the right buyer universe, enabling us to provide superior deal execution to our clients. In this episode, we answer the following questions: What is a VSC? What types of car problems are covered under a VSC, and how does it differ from car insurance coverage? What is the F&I products ecosystem? What are the economics of a VSC? What is the value of VSCs to consumers? Who are the major players in the VSC administrator industry? What are the consolidation trends in the VSC administrator industry?  How are VSC administrator companies valued?     What is a VSC? (02:30)   Gina Cocking:  A VSC is like a warranty but cannot be legally called a warranty. OEMs can only offer warranties. Essentially, a VSC is covering any mechanical failures on a vehicle, which can range from problems with the engine, electronics, windows, and others.   What types of car problems are covered by VSCs? (02:38)   Gina Cocking: Different VSCs cover different car problems. Some have full coverage, and others are more limited. Car buyers may also buy a tire and wheel contract, a key fob contract, or an appearance protection contract. There is a whole slew of products that can cover mechanical failures, which are noninsurance-related problems.   What is covered by car insurance versus a VSC? (03:00)   Gina Cocking: Collusion damages, such as if a driver gets hit by another car or runs into a stop sign, are covered by insurance. VSC covers all mechanical failures.   How often are VSCs purchased with cars? (3:40)   Gina Cocking: About 51% of cars sold in the United States through franchise dealerships are sold with a VSC attached to that car.   What is the F&I products ecosystem? (03:46)   Gina Cocking: Dealerships are the primary distribution channel as they are selling the F&I product to consumers. Third party marketers also sell VSCs.   The VSC administrators adjudicate the claims. For example, when a consumer has a mechanical failure, they will contact the VSC administrator, who will work with the repair facility to ensure that the repair facility is paid for any claims. If it is an administrator obligor, they are responsible for the payments for the claims.   F&I agents are the intermediary between the administrator and the dealership.   What are the economics of a VSC? (05:16)   Gina Cocking: VSCs are profitable products for dealerships and other sellers. For example, if a dealership sold a VSC to a consumer for $3,000 (VSC usually costs $2,800 to $3,500), the administrator probably sold it to the dealer for $1,000, and $500 was paid to an F&I agent. Therefore, the dealership is going to make a $1,000 profit on the sale of the VSC. Part of the $1,000 paid to the administrator covers administration costs, and part of it goes into the trust to pay for future claims. VSCs are typically a five-year contract. The funds held at the trust will earn out over five years and will be used to pay future claims. Any excess funds in the trust are remitted back as profits to the dealership or whoever owns the trust.   What is the typical F&I product penetration rate on vehicles sold? (08:04)   Gina Cocking: Public dealerships have shown F&I product penetration rate greater than 100% on average per vehicle sold last year, which means they are selling more than one product. Penetration rate continues to increase primarily driven by returning customers who have had good experiences with these products and dealerships' increased marketing efforts around these products.   What is the value of VSCs to consumers? (10:53)   Gina Cocking: There is a correlation between the increase in sales of VSCs and other vehicle warranty products and the rise in consumer electronics. If consumers have a service contract on their phone, they should also have a service contract on their car, a valuable asset.   The peace of mind component of service contracts, particularly VSCs, is why consumers are adopting these products. It is an excellent financial management product, but it is not necessarily a product for everyone. For example, some people do not need a VSC because they essentially can self-insure (i.e., have the funds to pay for repairs). However, 40% to 50% of Americans do not have $400 of assessable cash at any given time to pay for an unexpected repair, so these products are a necessary financial planning product to protect one of the most valuable assets, a car.   In the past, VSCs have had a bad reputation due to claims being denied. What are some of the top reasons claims are denied? (13:42)   Gina Cocking: Generally, what I see are when claims are denied is that they are usually made during the blackout window. Most VSCs will have a 30-day window post-purchase where you can not make a claim for anything that happens in the first 30 days. The reason for that is adverse selection. The other reason is that it might not be covered by the VSC, which is usually pretty clear in these contracts.   Who are the major players in the VSC administrator industry? (16:52)   Gina Cocking: The two largest VSC administrators that are non-OEM are JM&A and Safeguard. Other administrators include RoadVantage, IAS, and APCO. In addition, there are insurance companies that own administrators. For example, Fortegra owns Smart AutoCare as its warranty administrator, Assurant owns the Warranty Group, and AmTrust owns AAGI.   What have been the consolidation trends in the VSC administrator industry? Why are companies integrating, and what are the benefits? (18:35)   Gina Cocking: Vertical integration brings synergies and distribution. Administrators are locking up distribution channels by buying F&I agencies and buying other administrators. When administrators acquire another administrator, it could increase the geographic footprint and bring in a new market.   Insurance companies are buying administrators because there is some vertical integration by taking out part of the cost structure. Part of the cost structure is called Contractual Liability Insurance Policy ("CLIP"). An insurance carrier provides the CLIP, which is essentially a backstop to the funds put in the trust to pay for future claims. If there are not enough funds in the trust to pay for claims, the CLIP will ensure that the insurance carrier will provide the funds to pay for the claim. There is an expense associated with purchasing a CLIP, so an administrator that vertically integrates with an insurance company will take out some of the expense in the cost structure and recognize some synergies.   The number one driver of M&A activity in the industry is private equity firms, which have been investing in the F&I products sector for over ten years because of the dynamics of the industry. Favorable industry dynamics include large industry size, industry growth, high margins, and high cash flow. Private equity firms often acquire an administrator then make add-on acquisitions to increase distribution and recognize synergies in the expense chain by taking out a layer of the cost structure.   How are VSC administrator companies valued? (24:51)   Gina Cocking: Administrators are valued, typically not on GAAP, but modified cash accounting basis. GAAP accounting matches expenses and revenues with the life cycle of the product. Under modified cash accounting, revenues are recognized at the time of sale because these products are rolled into an auto loan, and the administrator gets payment upfront. The expense associated with reserve for future claims and the CLIP, all the contract-related expenses, are recognized at the time of sale. For a growing business under modified cash, earnings will be higher than under GAAP accounting.   There is real value to the insurance funds in the trust to pay for future claims for an administrator obligor. The products are structured to a certain loss ratio, which is claims divided by the premiums remitted to the trust. Income from the trust should be included in the value of the company.   Other drivers of value in this industry include geographic reach, concentration with dealership groups, and size. Client concentration is important because most private equity firms will not invest in a company if greater than 15% or 20% of its revenues come from a single source.  Size matters because bigger companies are worth more than smaller companies.       Host Information   Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Brookfield, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses.   Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families.   About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.  

Join David Nour on this episode of the Curve Benders podcast as he hosts Harry Kraemer, Jr., an executive partner with Madison Dearborn Partners, a private equity firm based in Chicago, Illinois, and a Clinical Professor of Leadership at Northwestern University's Kellogg School of Management, where he was named the 2008 Kellogg School Professor of the Year. Harry is the author of three bestselling leadership books: From Values to Action: The Four Principles of Values-Based Leadership, Becoming The Best: Build a World-Class Organization Through Values-Based Leadership. and Your 168: Finding Purpose and Satisfaction in a Values-Based Life. He is the former chairman and chief executive officer of Baxter International Inc., a $12 billion global healthcare company. He became Baxter's chief executive officer in January 1999 and assumed the additional responsibility of chairman of Baxter's board of directors in January 2000. Harry joined Baxter in 1982 as director of corporate development. His twenty-three-year career at Baxter included senior positions in both domestic and international operations. In 1993, he was named senior vice president and chief financial officer, responsible for financial operations, business development, global communications, and European operations. Over the next several years, he assumed additional responsibility for Baxter's Renal and Medication Delivery businesses. He was elected to Baxter's board of directors in 1995 and was named president of Baxter International Inc. in 1997. Before joining Baxter, Mr. Kraemer worked for Bank of America in corporate banking and for Northwest Industries in planning and business development. Mr. Kraemer is active in business, education, and civic affairs. He serves on the board of directors of Leidos Corporation, Dentsply Sirona, Option Care Health, Performance Health, and Alcami, and on the board of trustees of Northwestern University, The Conference Board, NorthShore University Healthsystem and the Archdiocese of Chicago Finance Committee and School Board. He is a member of the Dean's Global Advisory Board of Northwestern University's Kellogg School of Management. He is a member of the Council of CEOs, the Commercial Club of Chicago, the Economics Club of Chicago. He is a past member of the Business Roundtable, the Business Council, and the Healthcare Leadership Council. Mr. Kraemer graduated summa cum laude from Lawrence University of Wisconsin in 1977 with a bachelor's degree in mathematics and economics. He received an MBA degree in finance and accounting from Northwestern University's Kellogg School of Management in 1979 and is a certified public accountant. For his outstanding leadership and service, he received the 1996 Schaffner Award from the Kellogg School of Management. Harry enjoys jogging, tennis, skiing, and reading, especially world civilization. Harry, his wife Julie, and their five children live in Wilmette, Illinois. More info on Harry at www.harrykraemer.org. #CurveBendersBook --- Send in a voice message: https://anchor.fm/david-nour/message

In this episode, we covered: Lessons Learned from Tiger Woods on Brand & Excellence The Economics behind Consumer Investing Brand vs. Branding Value-Add Investing The Future of Audio Content-Driven Commerce And much more.... Please Enjoy!Rick Desai is the Head of Investments at Listen Ventures, an early-stage consumer-focused venture capital firm based in Chicago. Prior to joining Listen, he co-founded Dashfire, a Chicago-based startup studio that built and invested in over 40 businesses. His social entrepreneurial endeavors in urban Indian slums have earned him a Clinton fellowship. He began his career with Lehman Brothers in investment banking and Madison Dearborn Partners in private equity.You can find Listen Ventures on their website, Twitter, Instagram, and Linkedin, Rick on Linkedin & Twitter,  and Listen's podcast- “Overheard: Where Venture Meets Culture” on Spotify & Apple Podcasts.Restaurant Recommendation: Giant RestaurantManifold Group is a venture holding company based in Chicago with offices in Dallas, Los Angeles, and soon Atlantic Canada. Early stage private investments represent an extraordinary investment opportunity, but existing investment models in the space leave much to be desired.Manifold is a new model for growth in the new economy, designed to create and capture value at the early stage through synergies across its venture fund, incubation and acceleration studio, and advisory firm. Learn more about Manifold at https://www.manifold.group.

We are excited to focus today’s episode on the final phase of our unique 16-week sales process. Today we are focused on phase four: exclusivity/documentation. We invite you to listen to episode 001 for more information about phase one (pre-marketing), episode 002 for more information about phase two (go to market), and episode 0016 for more information about management meetings: https://www.coladv.com/podcasts/002/ Other episodes dive deep into technical aspects and tactics used in middle market and mergers and acquisitions. We also invite you to download our 16-week sales process timeline for more information on how Colonnade Advisors typically approaches the process of selling a company: https://coladv.com/wp-content/uploads/Four-Phases-with-graphic.pdf In our deep-dive discussion on exclusivity/documentation, the word “scary” comes up quite a few times. Rather than being scary from a horror film or haunted house, this scary is more like cold feet before a wedding. That’s because exclusivity/documentation is when you pick your partner and take a leap of faith with a single buyer. You’ll learn that in this phase of the sales process, we are not yet on the homestretch. In fact, our discussion unveils the many challenges of this phase of the sales process that must be simultaneously and actively managed. You’ll hear that this phase of the sales process almost feels like a crescendo. Our job at Colonnade is to manage this increasing set of workstreams and pull off a successfully closed deal. Then, as you’ll hear in the podcast episode, it’s time to celebrate. Key topics covered in this episode: • Preparing for the shift of power from seller to buyer • The importance of the letter of intent ("LOI") negotiations • How to select the winner (while keeping others warm in the background) • Who’s involved during the exclusivity/documentation phase • How long the process takes, and how much it costs • Pitfalls that we have encountered during this phase and how Colonnade mitigates these risks with our clients What is the exclusivity and documentation phase, and how do you get up to this point? (01:07) Gina: "This phase occurs when a seller is exclusive with a single buyer—we have received several bids and determined the winner. Both parties sign an LOI at this phase, and the seller agrees not to provide information or engage with any other potential buyers. The seller is essentially going off the market, which can be a bit scary because if the deal does not move forward with the exclusive buyer for some reason, then we will have to go back to the other bidders." What tasks need to be completed during the exclusivity and documentation phase? (02:11) Gina: "During exclusivity and documentation phase, we work through the confirmatory due diligence, which often involves a buy-side quality of earnings report. Also, during this period, we negotiate, finalize and execute the definitive purchase agreements and work through any related regulatory tasks to close." Is it possible for sellers to go through the exclusivity and documentation phase with multiple potential buyers? (03:18) Jeff: "In large transactions, it is possible to run multiple parties through this phase, but it typically does not happen in middle market deals.” What is the importance of the letter of intent (LOI) negotiations? (04:13) Jeff: "LOI negotiation is critical because we want to nail down all the topics that we think are going to be critical in negotiation and final documentation before we commit to one party. Hammering out these key topics ahead of time also expedites the process." Is the highest price generally selected as the winner? (05:05) Jeff: "Business owners do not always pick the highest price. It is also about picking the best terms." Listen to Colonnade’s podcast episode 007: Striking a Deal: Price & Terms: https://www.coladv.com/podcasts/007/ Once a seller is exclusive with a buyer, is there a backup plan if the deal falls apart? (05:15) Jeff: "We keep the non-winning bidders warm and engaged in a limited fashion to make sure that we have backups if the deal falls apart.” How do you assess the certainty to close a deal? (06:30) Jeff: "Assessing the certainty to close comes from years of experience working with buyers and thinking through key items such as where is the capital coming from, what their acquisition history is and how likely they are to close on the terms that we have outlined." Are there particular buyer types that are more problematic in terms of the certainty to close? (06:35) Gina: "One group that has caused us problems with the certainty of close in the past is search funds or unfunded sponsors, which are private equity investors that do not have a dedicated fund. These funds tend to bid the highest prices, which is appealing, but they will still need to raise the capital once in exclusivity from institutional investors. Those institutional investors will want to do their diligence, almost restarting the deal process, which creates more risk of the deal not getting done." Jeff: "About ten years ago, family offices were also in this category to some degree. Family offices had smaller dedicated investment teams, so the certainty of closing was considerably lower than traditional private equity firms or a strategic buyer. But that has changed over the last decade where family offices have shifted to become credible buyers." How long does it take to get from signing the LOI to closing? (08:45) Gina: "We generally put 30 to 45 days in the LOI with a provision that both parties can extend the period of exclusivity by mutual written consent based on putting forth best efforts. The time to close depends on the industry. For example, some industries may need regulatory approval or use complex accounting methodologies, which would require more time." What are the components of confirmatory diligence, and how are these workstreams sequenced? (10:06) Jeff: "There is HR, accounting tax compliance, regulatory, legal, IT, and others. Running these workstreams in parallel is key because it is the easiest way to minimize time to close, but you cannot get to the legal documentation until all these other workstreams are completed." At what point do you expect the first turn of the purchase agreement from the buyer? (12:30) Gina: "Pushing to get that first turn of the purchase agreement is very important. We frequently put the purchase agreement in the data room before the LOI, and we expect a markup of it along with the LOI or an issues list, which will help expedite the process.” Who pays for the costs associated with confirmatory diligence and documentation? (13:38) Gina: "The seller pays for the seller's costs, and the buyers pay for the buyer's cost." Jeff: "In the context of a rollover deal, where the company is getting bought by a sponsor, the surviving entity ends up absorbing costs from both sides." What are the typical costs incurred during this phase for sellers and buyers? (14:31) Gina: "The seller can expect to pay for tax counsel or tax accountants if there is tax work to be done, an attorney to assist with negotiating terms, a tax lawyer, and other types of counsels. Buyers can expect to encounter legal fees, accounting fees, consulting fees, IT, technology consulting, and HR consulting." How much does this phase cost for both the sellers and buyers? (14:31) Gina: "Ballpark is anywhere from $75,000 to a couple hundred thousand for a seller. On the buyer's side, a couple hundred thousand easily on diligence for a middle market transaction that's valued $75 to $125 million.” From the seller's side, who is typically involved during the confirmatory diligence phase? (15:55) Gina: "Confirmatory diligence is a big undertaking, and sometimes the knowledge level about the company needs to go beyond the deal team that has been involved to date. At this stage, other people in the company may need to be made aware of the transaction (e.g. sales management, IT, HR, etc.), which can be tricky." What types of issues generally come up in employment contract discussions? (18:57) Gina: "One issue that comes up is pay, which we manage by building out expected compensation levels in the financial model. The second issue is the bonus structure, and the third is vacation. The most important issue that comes up is non-compete, who gets one and what the terms are." Which employees will generally be subject to non-competes? (19:25) Jeff: "There is usually a non-compete for selling shareholders that will be getting proceeds from the deal and non-equity participants that are key to the ongoing entity.” What are the risks associated with employment agreements and non-competes, and how do you mitigate these risks? (20:52) Jeff: "The risk with non-equity participants that are key to the business is that they could choose not to go with the new buyer for whatever reason. This can result in a domino effect from a price change to the deal not happening at all. One tactic that we use is to encourage our seller clients to put in place some type of transaction and retention bonus." Gina: "When Colonnade is working on a transaction, we ask a lot of questions upfront. We will often ask who has employment agreements and what are the terms of those agreements. For business owners that are thinking about selling in a few years, they should be thinking about who their key employees are and how to get them under employment agreements now." What are the different types of employee bonus plans associated with a sale? (23:17) Jeff: "One is transaction bonuses which are for employees who are essentially doing two jobs during the deal process. The second is the retention bonuses that ensure employees are not going to leave when the deal closes." What is Hart Scott Rodino ("HSR"), and how does it impact the transaction? (23:59) Gina: "HSR is one type of regulatory approval that might be needed to close a deal. HSR applies to companies of a certain size, which will need to be approved by the government for anti-trust reasons.” Jeff: "The amount increases every year, but HSR impacts transactions roughly around $80 million in transaction value. There is a filing fee, and it is about a 30-day process.” How long does it typically take from signing the legal documents to closing? Who owns the company during this period? (26:13) Jeff: "It can be 30 days or longer, depending on the different types of approvals. For financial services deals where there is generally regulatory approval, it is often 30 or 60 days. During this period, the seller and buyer essentially both own the company." Can sellers request a break fee if the deal does not close? (27:00) Gina: "In highly competitive, larger transactions, there will be break fees, but in middle market M&A, it's highly unusual to have a break fee. That is because there is not enough diligence that has been done before the signing of the LOI. Without all the information, it is unlikely that buyers will agree to a break fee because they may find out many things during confirmatory diligence." What are typical pitfalls encountered during the exclusivity/documentation phase? How does Colonnade mitigate these risks with seller clients? (28:58) Gina: "One is indemnification, which reps and warranties insurance can mitigate.” Listen to Colonnade’s podcast episode 010: Escaping escrow: Reps & Warranty Insurance: https://www.coladv.com/podcasts/010/ Jeff: "Another pitfall that we have seen involves who owns the intellectual property. To mitigate this risk, we address this issue early in diligence.” Gina: “Another is when the buyers want to speak with the seller company’s top clients. We try to delay that conversation until as late as possible in the process. We want to get to the point where we feel comfortable that we have covered all the major issues, and we're likely to close." Jeff: “The last pitfall that comes to mind is tax, where two parties can have a different view on tax regulations in a given jurisdiction. Our job is to push things forward and cut through all the issues as quickly and efficiently as we can.” What dynamics are typically in play right before a deal closes? (39:02) Jeff: “What I find is when people are the angriest and they're about to throw up their hands, that's when we know we've got a deal, it's sort of where everyone's been pushed to their limits. Everyone's had to give and take, and they're just about ready to walk away, and then the deal signs.” Gina: “And then we celebrate.” Host Information Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Brookfield, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses. Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.

In previous episodes, Colonnade Advisors has outlined our unique 16-week sales process timeline in four phases: pre-marketing, go to market, management presentations/buyer due diligence, and exclusivity/documentation.  Today’s episode focuses on phase three: management presentations/ buyer due diligence. We invite you to listen to episode 001 for more information about phase one (pre-marketing) and episode 002 for more information about phase two (go to market). Other episodes dive deep into technical aspects and tactics used in middle market and mergers and acquisitions. We also invite you to download our 16-week sales process timeline for more information on how Colonnade Advisors typically approaches the process of selling a company. In this episode, we focus on the management meetings, where we introduce our seller clients to a limited set of qualified buyers that have put forth strong offers to buy the company. Management meetings fall on the heels of all the work Colonnade Advisors does with our clients to prepare for this stage of the sales process. At this point in the game, we’ve worked through the list of potential buyers and have narrowed the field to the most qualified. Management meetings are the first time the seller's management team will interact with this limited set of buyers. Thus the title for our episode: Seller and Buyer’s First Date. Key questions explored in this episode are: What purpose does a management meeting serve?  What topics are covered during management meetings? Who is invited? What’s the format for a successful management meeting? How has COVID19 changed how management meetings take place? How do we best prepare our clients?  What purpose does a management meeting serve? (02:15) Gina: "Management meetings are a continuation of the storytelling of the company. It is the opportunity for the management team to tell their story in their own words.  Management meetings are different from diligence meetings—it is not a meeting for potential buyers to ask detailed questions.  Management meetings are the showcase for the management to tell the origin story, to explain in their own words what the business does. And then, very importantly, talk about the growth opportunities.” What topics are covered during management meetings? (04:35) Gina: "Management presentations involve much of the confidential information memorandum but told from management's voice. Additionally, financial numbers are updated from when the confidential information memorandum was released. Sometimes, pages are added to the management presentation specific to the buyers we're meeting with.  Jeff: "When we go to market and have one-on-one conversations with buyers and investors, different themes emerge. Some of them are new and intriguing and bring us down different paths and highlight new growth opportunities. We benefit from the collective insights and questions of up to 100 or more different investors that are looking at the acquisition from their perspective. Once we collect all these thoughts, questions, and comments that buyers ask of us, we weave those themes into the management presentation. It is a collection of ideas that we've been able to cultivate from the market." Who is invited to the management meetings? (08:12) Gina: "From the seller's side, you'll have the CEO, President, the Chief Marketing Officer, the Chief Sales Officer, and the CFO.  Management team members that are leaving post-transaction should not attend the management meeting. (From the buyers’ side) if the buyer is a private equity firm, it will typically include Principals, VPs, and maybe some analysts. If the private equity firm has an investment banking advisor, their banking team will typically attend. If it is a strategic acquirer, the group may be larger. There may be an internal M& team and/or an investment banking advisory team. If the buyer is a private equity-backed company, it will usually be the investment banking advisory team, the strategic core team, M&A team, and some of the private equity firm representatives." What’s the format for a successful management meeting? (12:15) Gina: "Meetings typically take place at the seller's location, either their office or offsite location. Some people will dial into the meeting." Jeff: "Typically, after the management meeting, the group goes out for dinner. Historically, these dinners have been significant in building relationships and deciding who our clients like and who they don't. A lot comes out in these dinners. From the buyers' side, who attends, their seniority, and how prepared they are, are an important reflection of their interest level. The best meetings are interactive, going back and forth, and the attendees don't even touch the (presentation) books." How has COVID19 changed how management meetings take place? (12:47) Gina: "Historically, there are typically four to eight people attending meetings in person. During the COVID pandemic, things have changed. We’ve had Zoom management meetings, and because people don't have to travel, the meetings have gotten larger.” Jeff:  “The management meetings being virtual versus the (traditional) in-person meetings can be challenging. One of the major purposes of these management meetings is to build a relationship between the buyer and seller. An important role we play is working with our clients to manage this relationship-building inside of the virtual culture that we're living in right now.” How does Colonnade best prepare clients for management meetings? (17:41) Gina: "At Colonnade, we will do a profile of each attendee and the firm, a list of questions that they have asked, documents that they have requested, and where we think their interest lies. We also do dry runs with the management team." Jeff: "In preparing our clients on what to present, we will draft the management presentation and then have the management team review it. We spend a lot of time talking through how it might go, particularly with the list of potential questions that we pull together." Gina: “We prepare our clients for questions that are likely to come up. One question almost every management team gets is, 'why are you selling now, or why are you raising capital now?' Another common question is 'what keeps you up at night?' We also prepare our clients for questions to ask of the buyer. One question we encourage everybody to ask is, 'what is your experience in this industry, and what trends do you see in this industry that I should be paying attention to?' Other great questions are: 'describe an ideal partnership for our firms', and 'tell me about some of your other deals that were successful?' Jeff: "It is also good for the financial sponsors to talk about some of the deals that didn't go well. If you can get somebody to open up about some challenging situations/investments they've had, that can be insightful.”My favorite question is: 'beyond the capital, why should we pick you? Why are you the best partner for us?'   At Colonnade, we do our best to prepare our clients and get them ready and through the process as fast as we can." Host Information Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Brookfield, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses. Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.  

Harry M. Jansen Kraemer, Jr. is an executive partner with Madison Dearborn Partners, a private equity firm based in Chicago, Illinois, and a Clinical Professor of Leadership at Northwestern University's Kellogg School of Management. He was named the 2008 Kellogg School Professor of the Year. Harry is the author of two bestselling leadership books: From Values to Action: The Four Principles of Values-Based Leadership and Becoming The Best: Build a World-Class Organization Through Values-Based Leadership. In this episode, Harry shares his insights on the importance of relating to those you want to lead. He also offers a simple test on how to know if you have true self-confidence Do you have any thoughts? Please email us at hello@rosenmaninstitute.org. We post new episodes every Monday. “The Health Technology Podcast” is produced by Herminio Neto, hosted by Christine Winoto, and engineered by Andrew John Rojek.  

Jeff Dunn cut his teeth at Campbell Soup Company, but he found his passion as CEO of Bolthouse Farms, a packaged foods company that grew out of a small Michigan farm in 1915. In fact, that passion led him to buy the company back from Campbell’s after selling it to them in 2012. In this episode of Lead With We, I had the pleasure of speaking with Jeff about how differences in company culture led to the buy-back and taking an agile approach to consumer packaged goods. Plus, we discuss how the enormous demand for plant-based foods is reshaping our food system and how COVID opened up a conversation between Jeff and his leadership team about empathy.  Jeff Dunn Jeff Dunn is an Operating Partner at Butterfly and focuses primarily on the agriculture & aquaculture and food & beverage product sectors. Mr. Dunn is currently the Chairman and CEO of Bolthouse Farms and also serves on the board of directors of Orgain and Pacifico Aquaculture. He has over 30 years of experience in agriculture and packaged food, including senior leadership positions with Bolthouse Farms, Campbell Soup Company and The Coca-Cola Company, among others. Prior to joining Butterfly, Mr. Dunn was the President of the Campbell Fresh division of Campbell Soup Company from 2015 to 2016, where he was in charge of building Campbell’s scale and accelerating its growth in the rapidly expanding packaged fresh segments and categories across the retail perimeter. Between 2008 and 2015, Mr. Dunn was President and CEO of Bolthouse Farms, which is a leading processor and marketer of fresh carrots in North America, as well as a leading provider of super-premium juice, smoothies and salad dressings. Mr. Dunn also led Madison Dearborn Partners’ $1.6 billion sale of the company to Campbell in 2012. Prior to joining Bolthouse, Mr. Dunn was President and CEO of Ubiquity Brands, a rollup of several regional snack food businesses. Previously, he spent 22 years in leadership positions with increasing responsibility at The Coca-Cola Company, culminating with his role as President of Coca-Cola North America and Latin America, the largest of the company’s strategic business units. Mr. Dunn is also a co-founder of Acre Venture Partners, a Los Angeles-based venture capital fund that invests in the future of food. He currently serves as an advisor to Farmers’ Business Network, Spoiler Alert and Plenty and previously served on the board of directors of Herbalife and Juicero. This episode of Lead With We was produced and edited by Goal 17 Media and is available on Apple Podcasts, Google Podcasts, and Spotify, or watch this episode on YouTube at We First TV. Resources: Connect with Jeff on LinkedIn Learn more about Bolthouse Farms For case studies and other free resources about purposeful business, go to WeFirstBranding.com

In this episode, Jeff Guylay focuses on the best practices to maximize after-tax proceeds from a transaction. Jeff is joined by featured guest Raj Rathi, co-founder of Rathi Singh Private Wealth Management, to share his insights from helping his clients understand the nuances of how best to manage their wealth. Jeff and Raj discuss the importance of diligently working to articulate one's long-term personal and financial goals and utilize the wealth created in a transaction to achieve those goals. Key takeaways from this episode are: • Planning matters; and the sooner business owners start thinking about these important topics, the better • Assembling a complete team, spearheaded by a trusted private wealth advisor, can materially improve the odds of achieving business owners’ lifelong goals post-transaction through wealth preservation In this episode, Colonnade Advisors addresses the following questions as related to maximizing wealth created in a transaction: Why and how did Raj make the transition from working with corporate clients to wealth management? (02:24) Raj: "My corporate life tended to be transactional, where I would have wonderful client relationships, but sometimes those relationships tend to fade after the transaction has transpired. I realized that I liked to keep those relationships, and I liked to have those flourish a little longer. Also, there is an incredible opportunity for my personal clients to get the value-added services from somebody that can look at their situation from a much broader perspective." "Corporate clients have the benefit of an M&A advisor giving them expert advice on how to navigate every nuance of a transaction. Private clients don't get that same type of benefit. They tend to do things by themselves. There is a tremendous amount of inefficiency that exists in the way private clients manage their assets." "Part of the reason for my transition was the opportunity to work with corporate clients on an individual basis and help them, as a trusted advisor, on the private side. To help them figure out the most efficient structure regarding what happens with their wealth after they sell their business." When should business owners start thinking about post-transaction wealth management structures? (08:35) Raj: The best structures tend to be implemented before a transaction takes place. Colonnade, as a sell-side advisor, is incredibly value-added. You focus on maximizing your clients' pretax return on a sale and also try to highlight that there is a maximization that happens after the sale with the estate taxes and structure." "No client has a crystal ball on exactly when they may sell a business. The best advice is pre-planning never hurts because you don't know when exactly the sale is going to occur." Can business owners work in parallel with an M&A advisor on a sale transaction and a private wealth advisor on post-transaction wealth management? (10:50) Raj: Yes, it can run on a parallel path, but it takes a little bit of work. Business owners will need a good banking team to assist on the actual M&A execution and have a good private banking team that can work with the estate attorney or other key advisors. The critical component here is the more time you have, the better, and if you don't have a lot of time, there are still things that can be done that are quite valuable." Why is it important to consider post-transaction wealth management before a transaction takes place? (12:18) Raj: "Knowing how much of the transaction proceeds you will need for your lifespan, how much of the proceeds you want to give to your children, and to charity, in advance, will allow private wealth advisors more time to research the best approach." "Protecting your kids from creditors or predators can be done pre-transaction, harder to do post-transaction, not impossible but a little bit harder." "With the right structure, the estate tax bill can be alleviated into perpetuity. These are the kinds of things that are better addressed ahead of a transaction." Who is typically involved in the private wealth management team? (14:41) Raj: "Private wealth advisor, accountant, estate planning attorney, and tax advisor." Are there structures to minimize capital gains tax on the transaction proceeds? (18:04) Raj: "Sellers should plan on how much they need in their lifespan. Then plan the amount for gifting to children, grandchildren, or charity. We can use gift structures that are right down the middle of the fairway with what is permissible by the IRS, etc. Sellers would need to check with their tax advisor and the estate planning attorneys, but there are many proven structures." "Marrying what we do on an after-tax basis with what M&A advisors do on a pretax basis can be a home run. With proper structuring, the assets are protected from creditors and predators and can be passed down from generation to generation with minimal tax consequences. What are the three main questions that business owners should be thinking about regarding post-transaction wealth management? (21:40) Jeff: "What are your lifestyle needs? What do you want to give to your kids and grandkids or future generations? And then philanthropically, what do you want to accomplish?" Are business owners generally prepared to answer those three main questions? (25:32) Raj: "Those questions should be asked year in, year out for generations or decades. Many business owners will stress about the transaction side, as they should, but they do not marry it with stressing about the after-tax side, which does matter a fair amount." As a wealth management advisor, what are key factors to consider to advise your clients successfully? (25:50) Raj: "Understanding the risk appetite of the client, which entails hardcore planning and analytics on the client and the family and what they need. We have structural conversations with the client to understand the constraints and navigate that on a real-time basis over many years. Also, building in the flexibility structurally so that clients can adapt over time." Can you give an example of one of your private wealth clients? (26:18) Raj: "One of my clients was a Fortune 500 company CEO who just retired. Over the past ten years, he brought down his estate tax from $30 million to $4 million. The wealth transferred successfully on a multi-generational basis, with charity benefits and tax efficiency throughout the portfolio. That doesn't happen by accident. It happened by continued conversations and being smart about pre-planning and post-planning." Ideally, when is the optimal time for business owners to meet with private wealth management advisors? (31:16) Raj: "A year or two before a transaction would be wonderful, but the reality is most people do not do so for various reasons. When business owners decide to hire an advisor to sell the business, that is a good breakpoint to engage an estate planning person and have a team on a parallel path. Another good breakpoint is when the seller is in the letter of intent phase in a transaction." "Even if business owners engage a private wealth advisor post transaction, there is still a lot of good work that can be done, but it just takes a lot longer." Featured guest bio and contact information: Raj Rathi Email: rajeev.rathi@ml.com Raj Rathi is a graduate of The University of Chicago and Dartmouth's Tuck School of Business. Early in his professional life, Raj was an investment banker with JP Morgan and Lehman Brothers, eventually serving as a co-leader in the investment bank's industrial practice. After working in banking for over 15 years, Raj shifted his business activities to private clients from corporations and co-founded The Rathi Singh Private Wealth Management practice. For the past 15 years, Raj & his team have focused on providing a coordinated approach to wealth management that overlays risk, estate, tax, and portfolio considerations to maximize outcomes for clients. Raj's clientele includes Fortune 500 CEOs, business owners, and individuals with generational wealth. Ultimately he views his role as helping clients understand the nuances of how best to manage their wealth with a purpose and how best to define that strategy based on their goals. Please note that neither Merrill Lynch nor Colonnade Advisors provides legal or tax advice. Please consult with your advisors as appropriate. Host Information Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Brookfield, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses. Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.

In this episode, Gina Cocking and Jeff Guylay discuss the different types of auction processes we use in a sale transaction, including a negotiated deal, a small process, a targeted auction, and a broad auction. Gina and Jeff talk about each approach's pros and cons and why Colonnade advises clients on selecting one versus the other, recognizing that each situation is unique and calls for a customized approach to the market. This episode concludes with a case study of a negotiated process, a broad auction, and a hybrid between a small and targeted auction. In this episode, Colonnade Advisors addresses the following questions as related to the different types of auction processes: What are the four primary types of auction processes that Colonnade ues when helping clients sell their business? (01:52) Gina: "There are four general categories, ranging from the smallest audience to the largest. A negotiated deal involves one bidder. A small auction process generally involves two to five bidders. A targeted auction involves the most likely universe of buyers, ranging from six to 20. Lastly, a broad auction involves contacting a large universe of potential buyers, over 20 parties. There are pros and cons to each of these types of auctions." What are the advantages of a broad auction? (03:42) Jeff: "Broad auction is all about market discovery. All four types of auctions involve competition and market discovery, but a broad auction involves unturning every stone, looking under every nook and cranny, and finding that needle in a haystack that you wouldn't have thought about otherwise." How do we get to the highest value and best outcome with a negotiated auction? (05:14) Gina: "With a negotiated auction, there is one buyer, so there is the risk of no competition. The buyer could decide to change the price or walk away at any time. One tactic that we use is creating a credible threat. As the seller's advisor, we work in the background on creating materials to go to broader auction, if necessary. That is the credible threat: if the deal has a misstep at any point, the buyer knows that we can immediately go to market and get full market discovery." Jeff: "Some sellers do not want to go through a broad auction, so they are willing to get a slightly lower price for the benefit of only dealing with one buyer. In addition to pricing, deal momentum and getting a deal done are also critical. " What are the benefits of running a small process? (08:01) Gina: "A small process has a lot of the same dynamics as a negotiated auction. One additional advantage with a small process is actual competition, so you can compare bids and push bids up to the highest possible bid of that group. A second advantage is that the seller will have a fallback buyer if the first choice drops out for some reason. Another advantage to a small process is confidentiality. Selling a company is a very revealing exercise because the seller has to tell buyers everything about the company. A negotiated deal and small process limit the risk of who is getting the seller's confidential information." What types of buyers are generally in a small process and targeted auction? (10:46) Gina: "In a small process, it tends to be strategics. When there is a smaller universe of potential buyers, it tends to be the ones who really understand the business and are already interested, which are likely to be strategics. Jeff: "A small process is almost always largely comprised of strategics. There is probably a mix of strategics in a targeted auction, maybe have half a dozen strategics and ten private equity firms. That sort of universe can generate meaningful competition." What are the trade-offs between a small process and a targeted auction? (11:27) Jeff: "The workload for a small process and a targeted auction is probably the same, but the seller does lose a little bit of a grip on confidentiality because they are talking to 20 parties instead of two." What is one of the drawbacks of starting with a small group of buyers? (12:17) Jeff: "One of the drawbacks of starting with a small group of buyers in a negotiated deal, small process, or the targeted auction is that it is sometimes challenging, depending on how far along you are in the process, to switch to a broader auction. Sellers have to carefully select the appropriate process upfront." What are the considerations for doing a broad auction? (14:04) Gina: "The most important reason to do a broad auction is full market price discovery.” What is Colonnade's approach to assessing the buyer universe? (14:30) Gina: "Colonnade focuses on specific industries in business services and financial services and the intersection between those two, so we know the private equity universe and strategic buyers in these industries." Does a broad auction require more work for the seller? (15:30) Jeff: "A broad auction does not mean that our clients have to do more work than in a targeted auction. All the materials that we put together are the same. We still have to go through rigorous due diligence, putting the book together, building the financial model, and making sure that the story ties out." What is Colonnade's typical broad auction process? (16:00) Jeff: "We create a curated list of buyers, which is approved by our seller clients, and we approach this broad group with a no-name teaser. We contact this broad group and find out the conversations they are having internally and determine whether there is a fit. Sometimes the most obvious top five names are not interested, so it is good that we went to a broader universe. Our team goes through the list on a no-name basis, then under a non-disclosure agreement with specifics. We work the funnel down through indications of interest, management meetings, final bids, and down to the winner." Is there confidentiality risk in a broad auction when reaching out to 100 or more potential buyers? (17:25) Gina: "The 100 or more potential buyers do not all get the information. In the funnel, the 100 or more get the teaser and NDA on a no-names basis. Then at the next stage in the funnel, after the execution of an NDA, some subset will get the confidential information memorandum, which has a lot of information, but it still is limited. The next subset gives us an indication of interest letter, and we will invite them into the next stage, in which they then have access to a limited data room and perhaps a management meeting. Only that final buyer in exclusivity has access to what can be considered the company's trade secrets and have access to the contracts, etc." Jeff: "The buyer list is highly curated. " Can you give an example of a negotiated process? (19:02) Jeff: "TD Bank was selling a national commercial finance business to Wells Fargo. TD Bank hired Colonnade after they started talking about price. Colonnade's role was negotiating the deal and giving TD confidence that they were getting a fair price and what valuation should be in a broader process—creating a credible threat. We worked diligently to negotiate the deal with Wells Fargo and put a book together so that we were ready to go to market if needed. We had the 40 logical names ready to be contacted at any minute if the deal with Wells Fargo failed, and Wells Fargo knew it too. To Well Fargo's credit, they came through and offered a fair price and came through on the timing and offered a great platform for the team." Can you give an example of a broad auction? (20:54) Gina: "Last year, Colonnade advised Smart AutoCare on its sale to Fortegra, a Tiptree subsidiary. We started with over 100 potential buyers in a broad auction. We received eleven indications of interest, so it was a very robust auction, and we had great price discovery. At the time, we did not go to Tiptree because Fortegra was a supplier to the company. We had three or four LOIs, and we went forward with the winning bidder, and it was a great price. We ended up pivoting away from that buyer because the business owner felt that the private equity firm did not understand his business, so we went to Tiptree. We were able to negotiate a transaction with Tiptree and successfully close. It was a fantastic result." Can you give an example of a hybrid between a small process and a targeted auction? (22:37) Jeff: "A few years ago, we advised ADG on its sale to APCO. APCO had approached ADG and its private equity owner and made an offer. ADG hired Colonnade to run a small process or a targeted auction to the obvious buyers. There were many potential buyers, but we narrowed it to a list of 15 and worked that list to generate competition and drive up the price and terms. APCO, who had essentially triggered the auction, was ultimately the winner, and they paid market price and terms. It was a great outcome for the team." How do sellers determine which auction process is the best option for selling their businesses? (24:16) Jeff: "Each situation is unique, and it depends on lots of different circumstances. It is all part of the pre-planning process that we work with our clients to think about what's going to get the best outcome based on their objectives." Host Information Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Brookfield, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses. Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.

This is a special episode discussing how to build successful business relationships. In this episode, Gina Cocking, is joined by featured guest Willard Bunn, a managing director at Colonnade Advisors. Willard has previously served as chairman, chief executive, and director of several commercial banks. He has held numerous board positions and has extensive experience as an investment banker. Willard has the ability to build deep relationships with potential clients and industry professionals, resulting in seemingly effortless marketing. One of the key takeaways from this episode is that trust is a critical factor in building a successful business relationship. In this episode, Willard addresses the following questions as related to building business relationships: Before you meet somebody for the first time, do you do any special preparation beforehand? (02:02) Willard: "Yes, there is so much information available on LinkedIn and other sources. When I meet people for the first time, I will search for them and extract what I can. It's helpful when you show up at a luncheon table to know who exactly you're talking to." How do you prepare when you don't know you're going to meet a person? For example, when attending conferences with hundreds of people in a room. (03:11) Willard: "I have found the best icebreaker has always been to ask. ‘What is your business? What do you do?’ Because there is nobody on the planet who doesn't want to talk about his or her business. Once you get that laid out, then you know where to go with the next question." Once you have met a person and chatted for a few minutes, how do you continue with that relationship? What type of follow-ups do you do? (03:57) Willard: "Normally, the follow-up would be an email of some sort. In the email, try to grab onto something in the conversation because that person has met a lot of people that evening, too." How soon do you generally follow-up with someone that you have met? (04:53) Willard: "I try to follow up quickly with an email, so the image is still in their mind. I also think it's helpful to attach something to the email. For example, for Colonnade's marketing, attaching a podcast episode or white paper would be helpful because it gives them an idea of who you are and the company." Do you have any strategies for cold calling or emailing people? (04:53) Willard: "If you are reaching out to someone for the first time, it is a good idea to attach a piece of work that you have done. For people that you're in touch with regularly, it is a good idea to attach a current update to the piece of work. This kind of process can stretch over the years. Building these relationships take time." When you do outreach and do not get a response, how long do you wait before you reach out to somebody again? What strategy is there without making the person feel guilty but reminding them that you're there? (08:19) Willard: "These are situational. I think once a quarter is probably sufficient time to give some downtime, but not to let it lapse either." What are other successful maintaining relationship strategies have you encountered? (09:21) Willard: "When I was running a bank, I was the target for investment bankers, and one of the bankers would send a non-business book every Christmas. I always thought that was a good way to keep in touch via a non-aggressive Christmas present." How do you prioritize maintaining relationships with people? (11:35) Willard: "One of the things that I noticed in the investment banking business was the bifurcation of time. When you get busy with current active deals, how do you simultaneously keep in touch with prospects? It's like everything else in life, you have the work you have to do right now in front of you, but you also have a list on the side of prospects. Communication now is much easier than ten years ago, which makes reaching out to prospects to keep in touch much easier." How do you reach out to people that you have not interacted with much? (13:26) Willard: "During non-COVID times, Chicago offered various events that allow people to meet. One medium that I have used in the past was the speaker dinners at the Economic Club. It gives you an informal, non-threatening environment to try to further a relationship." How do you build trust in a relationship? (15:18) Willard: "That is an important concept. People hire you because they trust you and feel you understand their business. It is hard to know what triggers trust. In my particular case, on the investment banking side, the people we represented, I knew well over several years. When you see how people behave in restaurants with waiters, how they behave on the golf course, and all that kind of stuff, that adds up to form a standpoint that I know this person and trust them, particularly, I can trust them to tell me the truth." Gina: "We also talked about how follow-ups after meeting a person can build trust. It's a good way to start building trust." What is one way to distinguish yourself when following up with business prospects? (18:39) Willard: "You distinguish yourself by actually doing something you said you were going to do. It is super simple, but not everybody does that." How often do you use handwritten notes, and when and why do you do that? (19:45) Willard: "In meaningful situations, I think a handwritten note is a very nice idea. It shows a little extra effort." Gina: "When I left Discover Financial Services, I wrote some of my colleagues handwritten notes a few days before I left. Then, I noticed several people had my note in their cubicles. I think because it was an unusual thing. People kept it and remembered it." What are your thoughts on postcards? (21:26) Willard: "Postcards are a very nice thing to send to people because it lets them know you're thinking of them in out of the way places." We all have limited hours in a day; how do you politely decline someone who reaches out to you, but you may not be in the best position to have a conversation with them? (23:00) Willard: "If someone wants your opinion about something, that is a nice compliment, so you don't want to seem ungrateful. If time is limited, tell the truth that it isn't anything you want to get involved with right now." Do you have any advice for people who are starting their careers and starting to build professional relationships? (25:31) Willard: "I'll give a piece of advice that I got from my father-in-law. When I was working in New York in the 70s, he advised me that I should get out every day and have lunch with somebody, and I did. Some of those lunches have led to great business ideas. My main point is to make sure you are out there seeing people, and lunch is a good time to do it." Featured guest bio and contact information: Willard Bunn III Email: wbunn@coladv.com Willard Bunn III joined Colonnade Advisors as a Managing Director in 2012. Willard has served as chairman, chief executive, and/or director of several commercial banks in the course of his 40-year career. Willard's long career in the banking industry began at Chemical Bank in New York before returning to Springfield in 1978 to serve as Executive Vice President and eventually Chairman and Chief Executive Officer of Marine Corporation, a multibank holding company with $1.2 billion of assets. Following Marine's merger with Banc One, Willard was appointed Chairman and Chief Executive Officer of Banc One Illinois Corporation, which he held until 1994. Willard went on to serve in various management positions with two investment banking firms. Willard served as a Director of Baytree Bank of Lake Forest, Illinois, from its founding in 2000 and as Chairman of the Bank from April 2010 to August 2012. Willard serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Waukesha, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. He also serves on the Boards of Midland National Life Insurance Company and North American Company for Life and Health Insurance, insurance subsidiaries of the Sammons Financial Group. In addition, Willard is Chairman of the Board for the Poetry Foundation, a literary organization, and a Poetry magazine publisher. He serves as an advisory director of Chicago-based Campus2Career Transition Services and a member of The Banc Funds Company's valuation committee. Willard holds a BA from Princeton University and an MBA from the University of Virginia. In addition, he has the Series 79 securities license. Host Information Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Brookfield, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses. Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.

In this episode of Restarting America, Jeremy Greenberg from 97 Switch interviews Brad Zelinger, the founder and CEO of Stride Autism Centers. Throughout the interview, they discuss the impacts of the COVID-19 pandemic on business and society. Zelinger shares how the current health pandemic has affected his company and how he is adapting to new circumstances. Zelinger was inspired to found Stride Autism Centers by his adult sister who has a severe ASD-related disorder called Rett Syndrome. He is personally and professionally dedicated to supporting individuals with complex needs. Zelinger began his career in investment banking at Moelis & Company in New York. Before founding Stride, he was a private equity investor at Madison Dearborn Partners and TZP Group, where he evaluated, executed, and oversaw investments in growth-oriented companies. Zelinger earned an MBA from Harvard Business School and a BBA with High Distinction from the University of Michigan Ross School of Business. He serves on the Boards of Rett Syndrome Research Trust (RSRT) and Aspiritech and is Treasurer of the Illinois Association for Behavior Analysis (ILABA).

Are you living your core personal values? If you look carefully at how you're spending your time, how aligned is it with your core values? It's a great time to step back, take stock, and make some changes that can make a big difference in the year(s) ahead. Our guest Harry Kraemer, author of Your 168: Finding Purpose and Satisfaction in a Values-Based Life, highlights how self-reflection can help create greater alignment and flexibility. A Values Based Life Our conversation covers a lot of ground: Why 168 is his favorite number. After the books he's written on leadership, what inspired him to write Your 168. What a life based on values looks like versus one that’s less so. Why self-reflection is so important – and how it's part of his day. How planning and spontaneity can co-exist. What the transition was like for him when he retired  – and what led him to teach in the MBA program at Kellogg. What a friend and colleague learned from a wake-up call. The role habits play in a values-based life. Why genuine humility and making a difference are key parts of a values-based life. His involvement in the One Acre Fund. The best way to start if you want to make the most of your 168 starting in 2021. __________________________ Bio Harry M. Jansen Kraemer, Jr. is an executive partner with Madison Dearborn Partners, a private equity firm based in Chicago, Illinois and a Clinical Professor of Leadership at Northwestern University's Kellogg School of Management. He was named the 2008 Kellogg School Professor of the Year. Harry is the author of two bestselling leadership books: From Values to Action: The Four Principles of Values-Based Leadership and Becoming The Best: Build a World-Class Organization Through Values-Based Leadership. He is the former chairman and chief executive officer of Baxter International Inc., a $12 billion global healthcare company. He became Baxter's chief executive officer in January 1999, and assumed the additional responsibility of chairman of Baxter's board of directors in January 2000. Mr. Kraemer joined Baxter in 1982 as director of corporate development. His twenty-three year career at Baxter included senior positions in both domestic and international operations. In 1993, he was named senior vice president and chief financial officer, responsible for financial operations, business development, global communications, and European operations. Over the next several years, he assumed additional responsibility for Baxter's Renal and Medication Delivery businesses. He was elected to Baxter's board of directors in 1995, and was named president of Baxter International Inc. in 1997. Before joining Baxter, Mr. Kraemer worked for Bank of America in corporate banking and for Northwest Industries in planning and business development. Mr. Kraemer is active in business, education and civic affairs. He serves on the board of directors of Leidos Corporation, Dentsply Sirona, Option Care Health, Performance Health and Alcami, and on the board of trustees of Northwestern University, The Conference Board, NorthShore University Healthsystem and the Archdiocese of Chicago Finance Committee and School Board. He is a member of the Dean's Global Advisory Board of Northwestern University's Kellogg School of Management. He is a member of the Council of CEOs, the Commercial Club of Chicago, the Economics Club of Chicago. He is a past member of the Business Roundtable, the Business Council, and the Healthcare Leadership Council. Mr. Kraemer graduated summa cum laude from Lawrence University of Wisconsin in 1977 with a bachelor's degree in mathematics and economics. He received an MBA degree in finance and accounting from Northwestern University's Kellogg School of Management in 1979 and is a certified public accountant. For his outstanding leadership and service, he received the 1996 Schaffner Award from the Kellogg School of Management. Harry enjoys jogging, tennis,

In this episode, Gina Cocking and Jeff Guylay focus on valuation - determining what your company is worth. Key takeaways from this episode are: The right valuation methodology depends on the industry and the company Valuation should not be overly focused on the multiple. It also depends on what you to apply the multiple to Market price discovery through a competitive process will drive the highest valuation In this episode, Colonnade Advisors addresses the following questions as related to valuation: What are the different valuation methodologies used? (00:48) Gina: "There are comparable company trading, comparable transaction, and the more complex discounted cash flow valuations. There are also other types of valuation methods that are not relevant to what we do on a day-to-day, so we will focus on the three main ones." At what point in the process is valuation analysis generally performed? (01:12) Jeff: "It is often performed ahead of going to market. Many times, it is ahead of us doing due diligence. We might update these valuation analyses for our clients at various points throughout the process, and we do a gut check on whether we are ready to go to market." What is the value of hiring a sell-side financial advisor in determining the transaction price? (01:12) Jeff: "Ultimately, it is the market that sets the transaction price. The real value of hiring a financial advisor to help sell a business is to get the best price and terms, which is generally achieved through an auction process." What is a comparable transaction valuation? (02:43) Jeff: "It is what the market has offered up to companies that are comparable to the company being evaluated. For example, if a company sold at eight times EBITDA, it's logical to assume that another company that is very similar, or comparable, would trade at eight times EBITDA." What attributes of a target company will impact the comparable transaction multiple? (03:37) Jeff: "The multiple will depend on all sorts of attributes of the specific target company, whether it is growing faster or slower, whether the management team is better or worse, client concentration, or geographic concentration. All sorts of things influence the multiple that a buyer is willing to pay." What is comparable trading valuation, and how does it apply to middle market transactions? (04:17) Jeff: "This involves looking at where the comparable public companies are trading in the public markets. The comparable trading valuation metrics are a little more theoretical for the middle market transactions. It is a helpful metric and something used in negotiations with buyers, but there are all sorts of factors that drive the multiple relative to what you might expect to achieve in the private market." Gina: "Volatility in the public market will impact the valuation of public companies.  You do not see the same day to day volatility in a private transaction. For a middle market company, comparable trading valuation is less relevant because of the size differential." What is discounted cash flow valuation? (06:35) Jeff: "The discounted cash flow valuation is an analysis of the businesses' free cash flows. Then discount the cash flows at a certain discount rate to arrive at the net present value of all those cash flows. The biggest drivers of this analysis include the discount rate, which could be derived using the CAPM model, and a variety of other factors." What industries use revenue multiples? (09:37) Gina: "Pre-profitability companies use revenue multiples. It is often used in high growth type businesses such as software and biotech companies and recurring revenue companies. The revenue multiples can range depending on the industry." What is the rationale for using EBITDA multiples? (10:29) Gina: "EBITDA is a proxy for cash flow and normalizes income between various companies." How do you determine which multiple metrics to use? (11:58) Jeff: "There are many different metrics that buyers and sellers can focus on, and it is generally industry-specific. It is important for the seller and their advisor to focus on what are the right metrics for the seller's business." What are the multiple metrics applied to? (12:34) Gina: "There are a lot of different ways to look at what the metric is. Different methods are used in different industries. Some industries use GAAP accounting, and some industries use some special purpose accounting. There are also add-backs to EBITDA so that anything unusual and extraordinary can be added back to increase EBITDA and valuation." What is the significance of add-backs? (14:18) Jeff: "Add-backs help demonstrate what the company's earnings stream looks like going forward. It gives a sense of the pure earnings of the business." What are pro forma adjustments to EBITDA? (14:58) Gina: "It involves adjusting historical EBITDA for known future or recent arrangements, such as a decrease in expense or increase in operating efficiency. The adjusted EBITDA demonstrates how the business is going to operate going forward." What is synergy in an M&A transaction, and can the seller benefit? (17:13) Gina: "Synergy is when two companies combine, and instead of being one plus one equals two, one plus one equals three. That could be because of expense reductions or revenue enhancements. Buyers will benefit from synergies in the future. A competitive process will increase the likelihood that a seller will get paid for at least a portion of the synergies a buyer may achieve." How does customer concentration impact valuation? (19:26) Gina: "Customer concentration or any distribution channel concentration will typically reduce valuation. Customer concentration involves anything greater than 15%." How does the transaction process impact the price and term? (20:49) Jeff: "There are various factors that could lead to a potential buyer dropping out. Therefore, finding the greatest number of highly qualified buyers and working diligently through the process delivers the best price and term for sellers." What is the difference between enterprise value versus equity value? (21:47) Gina: "If a company has debt on the books, then the debt is subtracted from the enterprise value to get to the equity value." What is the ultimate answer to "What is my company worth?" (23:30) Gina: "Your company is worth whatever someone is willing to pay for it. Our job is to create a competitive environment to yield the highest price and the best terms." Host Information Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private equity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Brookfield, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses. Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.

In this episode, Gina Cocking and Jeff Guylay continue their discussion on deal structuring. Today, the focus is on roll-ups. Key takeaways from this episode are: • Highly fragmented industries are ripe for roll-ups • A roll-up is an attractive exit alternative for companies that are subscale or have an incomplete management organization • Transparency from both the buyer and the seller leads to the most successful outcomes Other episodes in our series about deal structuring include price and terms, earn outs, rollover equity, and reps and warranty insurance.  Later in this episode, Gina is joined by our guest Rob Humble, Chief Revenue Officer at Innovative Aftermarket Systems ("IAS"), to share his insights from executing a roll-up strategy for IAS as the Senior Vice President of Strategy and Corporate Development. In this episode, Colonnade Advisors addresses the following questions as related to roll-ups: What is a roll-up? (01:02) Gina: "A roll-up is when an owner, which could be a private equity owner or a strategic, starts with a platform company. The roll-up adds other companies in the same industry, and they're typically smaller companies than the platform. The add-on companies are rolled into the platform." What is the purpose of implementing a roll-up strategy? (01:34) Gina: "It's a way for a company to increase in size inorganically, quickly, and while doing so, they are recognizing both expense synergies and perhaps revenue synergies." Jeff: "It plays on the themes that we've talked about in other episodes, which is bigger is better, in many respects. Generally, bigger companies are more attractive to a wider audience of investors or buyers." What industries typically do roll-ups? (02:42) Gina: "One industry that comes to mind is the insurance agency industry. We have seen this time and time again, where a private equity firm buys an insurance agency, a large insurance agency, and then they start making smaller acquisitions." Jeff: "The insurance distribution sector is perfect for the roll-up strategy. It's low capital intensity, recurring revenue, and highly fragmented market." What type of companies implement roll-up strategies? (04:29) Jeff: "This strategy works for large public companies, private equity firms, and independent companies." What is the rationale for roll-ups? (05:34) Gina: "One is geographic. Number two, it might be because of specific product knowledge. Number three, it can be to get a specific customer. What is the financial benefit of roll-ups? (06:49) Jeff: "A large platform company is going to trade at a higher multiple than a smaller company. There's arbitrage if a large platform company acquires smaller add-on acquisitions and integrates successfully." Why is integration important? (07:56) Gina: "Sometimes, acquisitions fail because they fail to integrate properly. That is not just making sure everybody is on the same technology system, but integrating cultures, integrating client relationships, and integrating product sets. That is the real challenge in an acquisition." Jeff: "The integration is key to a lot of things, certainly to value maximization over time." How do add-on companies benefit from roll-ups? (10:23) Jeff: "The add-on companies benefit from the resources of the parent company, the larger enterprise. Add-on companies can grow their business, which probably will have some contingent consideration involved in the transaction, and be a part of the success." Gina: "The smaller company, ideally, will have some rollover equity or earn outs that are structured on growth in the company, so you get to participate in the upside." When Colonnade represents a seller into a roll-up, what diligence is done on the buyer? (12:10) Jeff: "We do diligence on the parent company and the financial sponsor. We talk about their track record and history in doing roll-ups. We do diligence on the acquisitions they have done already and the outlook of the combined entity. Part of the consideration to our client is likely going to be equity in this new entity, so we will think about how much to rollover, what's it worth, what are all the conditions around it, and who is in control." What is one of the challenges for sellers in a roll-up? And what are the trade-offs? (13:23) Gina: "One of the challenges for entrepreneurs when they go through a sale process is the sudden realization that they're going to have a boss. Entrepreneurs are entrepreneurs for a reason. They like running the show. It can be a challenge to be part of a larger organization and not be in charge." Jeff: "There are the trade outs with control. Being part of a larger organization, the add-on company benefits from the growth of the larger organization, increased size, and resources for future acquisitions." What is the potential upside for sellers that rolled over equity into the new entity from a financial perspective? (15:63) Gina: "The upside can be enormous. The next exit with the platform could be worth just as much if not more than when the seller went in and did the first transaction." What is your outlook on roll-ups used in transactions? (17:45) Gina: "Roll-ups are used all the time. Going into the next decade, I do not see a slow down in roll-ups as a strategy being deployed by private equity firms." Gina invites Rob Humble, Chief Revenue Officer at IAS, to share his insights from executing a roll-up strategy for IAS as the Senior Vice President of Strategy and Corporate Development. What is the most effective structure for proceeds to the seller for a roll-up? (18:40) • An acquisition under private equity ownership generally comes with an equity component • For sellers that are not looking to be a long-term part of a bigger organization, they are likely maximizing value at closing, which means they are going to value cash and as little earn out as possible • IAS was private equity-owned and was buying companies that bought into the private equity model, which is to invest the executive’s energy, and together produce greater value and then share in that value How do you guide sellers that shy away from roll-ups because they want to protect their employees? (21:13) • As the buyer, be honest and transparent as much as possible throughout the process • Sellers can build a deep trust with the buyer and can trust that the deal that they entered into together is going to work out for not only what the buyers’ strategic intent is, but sellers’ as well • It is best if the buyer can collaborate with the sellers on what are the ways that they can be more efficient together How do you get business owners comfortable with working for someone post the transaction? (23:33) • It comes back to honesty, transparency, and as much diligence both ways as possible. What would you tell a business owner that is getting ready to sell into a roll-up strategy? (23:51) • Get prepared and get organized. Perform diligence on your own company before you let somebody else look at your company • Sellers should understand why they want to sell then find a buyer that they believe meets that criteria Featured guest bio and contact information: Rob Humble Email: rhumble@iasdirect.com Rob Humble is the Chief Revenue Officer at Innovative Aftermarket Systems. Before coming to IAS Rob held strategy and corporate development leadership roles with financial services firms NetSpend and Rent-A-Center. Prior to his time in financial services, Rob held strategy, finance, and operations roles at Fortune 500 companies spanning the automotive, defense & aerospace, and chemical industries. Rob earned his bachelor's degree in mechanical engineering from Washington University in St. Louis, graduating magna cum laude. He also holds an MBA from Harvard Business School. Rob lives in Austin, TX with his wife and two young kids. He enjoys hanging out with his family, distance running, binge-watching the hottest TV shows, watching Oklahoma Sooners football and indulging in random interests including knitting, furniture building, and home improvement. Host Information: Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a privateequity-backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Brookfield, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses. Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.

In this episode, Gina Cocking and Jeff Guylay continue their discussion on deal structuring. Today, we explore reps and warranties ("R&W") insurance. In this episode, we cover: · What is R&W insurance? · What is the pricing of R&W insurance? · What is the process to obtain R&W insurance? Key takeaways from this episode: · R&W insurance is a tried and true product, and securing it will not slow down the pace of a deal · Smaller deals, down to $10 million in size, can still get R&W insurance · R&W insurance is a great way for a seller to get more cash at close, rather than having 10%+ of the purchase price tied up in a multi-year escrow Other episodes in our series about deal structuring include price and terms, earn outs, rollover equity, and roll ups.  Later in this episode, Gina is joined by our guest Mike Wolf, who specializes in R&W insurance at Willis Towers Watson's M&A Group. In this episode, Colonnade Advisors addresses the following questions as related to R&W insurance: What is R&W insurance? (00:27) Jeff: "R&W insurance insures the seller and buyer from a breach of representation and warranties in the purchase agreement. " What is the difference between R&W insurance and an escrow? (01:27) Jeff: "R&W insurance avoids utilizing an escrow. An escrow is deferred consideration that is withheld to make sure that these reps and warranties survive and that they are fulfilled post-transaction." How often is R&W insurance used in transactions? (02:38) Jeff: "R&W insurance is a relatively new concept in the M&A world." Gina: "It really came into being about seven years ago. Now, it is used in almost 95% of all transactions." What is the purpose of R&W insurance? (02:48) Gina: "In a purchase agreement, there's always a section called reps and warranties regarding the company and the seller. The seller has to represent fundamentals such as that the organization is in good standing, is licensed in the state, and the sellers have the authorization to do the transaction and have the consents. " What are other typical reps and warranties in the purchase agreement? (03:45) Gina: "There is usually a representation that the capitalization is correct, all subsidiaries are listed, the financial statements are in GAAP or other accounting standards used, there is an absence of undisclosed liabilities, the contracts are true and all have been disclosed, all obligations to related parties have been disclosed, all real property has been disclosed, all intellectual property has been disclosed, listed, and truthfully identified, litigation has been disclosed, privacy and data security representations are made, taxes have been paid, and employees and labor matters have been disclosed." What is the typical coverage amount? (06:12) Gina: "The coverage is typically 10% to 15% of the purchase price. For deals under the size of $50 million, the coverage percentage may go up.” What is the typical premium for R&W insurance? Are there any other fees? (07:11) Gina: "Typically, we see premiums between 3% to 5% of the coverage amount. Economically, it does get cheaper with more coverage. Small deals are more expensive on a percentage basis; larger deals get a break. Another fee is the underwriting fee charged by the insurer, typically around $50k." Who pays for the R&W insurance? (08:50) (13:29) Gina: "This is where the negotiation comes in. Everybody has a different view. The buyer wants the seller to pay; the seller wants the buyer to pay." Jeff: "It is really a buyer's policy. No matter who is paying the premium or who is paying their share of it, it is the property of the buyer." Why do buyers prefer R&W insurance versus an escrow? (09:51) Gina: "Buyers do like R&W insurance. A breach of a representation and warranty can cause a lot of conflict between the seller and the buyer when there is an escrow, especially when the seller is continuing to manage the company. It's easier if there is a breach of representation and warranty and the buyer goes to the insurance--no conflict." What is Colonnade's typical process in representing sellers to negotiate who is paying for the R&W insurance? (11:02) Gina: "At Colonnade, when we ask for the indications of interest, the letters of intent, or bid letters, we ask the buyers to indicate whether they are going to pay the premium for the R&W insurance. Some buyers will pay the full amount, some won't, and some will pay a portion of it. It is a negotiated point. Another negotiated point is who pays the underwriting fee." What is the process of obtaining R&W insurance? (12:26) Gina: "The process starts very early. It starts when the seller is picking their legal counsel. It is important that the seller has legal counsel that has experience with R&W insurance. Also, the seller or buyer will need a broker." Why is the broker's role in obtaining R&W insurance? (13:37) Gina: "The broker will work with multiple insurance companies to get the best rate and the best coverage.” At what point during the transaction process should buyers or sellers speak with a broker? (13:37) Gina: "The proper time to speak to a broker is once the LOI has been signed and you have entered the exclusivity period." Generally, how long does it take to obtain the R&W insurance? (15:31) Gina: "Generally, it takes only one to two weeks to get through the underwriting process. For a 60-day exclusivity, contact the broker day one of 60 days, but probably around day 30 or day 35 is when the representation and warranty process in terms of getting the coverage starts." Jeff: "The timing is really important. Brokers and carriers are pretty aggressive these days, so they will move pretty quickly.” Who are the dominant carriers and brokers for R&W insurance in recent years? (19:19) Gina: "For brokers, two that I've seen a lot are Willis Towers Watson and Lockton. There are many carriers, including AIG, Zurich, Hartford, Allied, and Berkshire. The brokers will know who the right carrier is for the right types of companies.” Gina invites Mike Wolf, who specializes in R&W insurance at Willis Towers Watson's M&A Group, to share his insights. What is the typical cost of R&W insurance? (21:40) Mike: "Similar to other insurances, there is the premium, which is usually 2.6% to 3.3% of the limit purchase. Second, there is the underwriting fee, which is generally $30,000 to $50,000. Third, there are surplus lines, taxes, and fees, which is another 2% to 5% of the premium. Lastly, there is a fee to the broker to facilitate these products." What items are not covered by R&W insurance? (25:21) Mike: "There are the standard exclusions such as asbestos and PCBs, underfunded pension plans, certain types of NOLs and tax attributes. Right now, COVID-19 has become an interesting exclusion. Transfer pricing is sometimes an exclusion. In addition to the standard exclusions, there are deal-specific exclusions. Deal-specific exclusions arise either at the stage of getting the quotes or during the underwriting process." What are the common things that come up during underwriting? (30:38) Mike: "It depends on what the target does. The common themes are wage and hour, employee independent contractor issues, SLSA issues, anti-corruption and bribery." What size deal is too small for R&W insurance? (32:15) Mike: "Everybody will tell you something different, but I think $10 million." What is the typical brokerage process? (36:15) Mike: "Phase one is going out and getting the quotes, which doesn't take very long, and we don't charge any money for that. The first non-refundable fee is once the client selects an insurer, which is when the process really gets started." Featured guest bio and contact information: Scott Wolf: Email: scott.wolf@willistowerswatson.com Scott Wolf is a Client Relationship Director at Willis Towers Watson. Scott specializes in assisting strategic and financial buyers and sellers with transactional insurance, including reps and warranties insurance, tax insurance, and contingent liability insurance. Since joining Willis Towers Watson in 2017, Scott has worked on over 100 transactions involving representations and warranties insurance, ranging in enterprise value from approximately $9 million to $3 billion. Scott's prior experience includes working as an associate at DLA Piper, an associate at Gould & Ratner, and an associate at Kirkland and Ellis. Host Information: Gina Cocking: Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners, and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private-equity backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Waukesha, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses. Jeff Guylay: Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.

Gregg Garrett, discusses how transforming an organization is a lot like baking a cake. Gregg then speaks with Sean Killian, President North America, Atos Medical. Sean shares insights he has gained as a global citizen and observations he has made as he pivoted his career from industry to industry. Of course, he speaks about his top three who include mentors who taught him to bring structure to unstructured situations, inspirational leaders in the world of sports, and day-to-day confidants who help him scale. And you have to hear what he has to say about what it’s like to become the president of a company in the midst of a pandemic. About Sean Killian Sean serves as President of North America for Atos Medical, a PAI-portfolio healthcare company that serves customers in the laryngectomy space. Prior to joining Atos earlier this year, he was on the executive team of Performance Health, a portfolio company of Chicago-based Madison Dearborn Partners, where he was VP of Global Strategy and GM of Specialty Products. Previously, Sean was Global Head of M&A Strategy at Mondelez International and, prior to that, a Principal at The Boston Consulting Group in its Chicago office. Show Highlights Segment 1: Overview 1:07      Why do over 70% of transformations fail? 3:01      Transformation is like baking a cake. 6:52      Sean Killian: His journey began with journalism and consulting that led him around the world and back to his current role in the medica. industry. Segment 2: The “Top Three” 14:06   Sean’s “Top Three” beings with mentors who give perspective on the tools you need, connecting it to where you are today as an individual on a development curve, and playing a role model 16:39   Weighing mentor quality vs boss quality. 18:02   Hints for leaders: Be structured. Get into the 80/20 – what really matters. Have a plan and execute that plan. 20:47   Sean’s “Top Three” expands with a speakers, personalities, and leaders in the world of sports, such as Jim Valvano & Brian Kelly from whom he can gain life advice. 23:05   There aren’t lines between the workplace and personal life; it just is. 26:12   Modeling for your team that it is okay to make a mistake is really important. 28:28   Sean’s “Top Three” concludes with day-to-day confidants who help him scale including Mauricio Atry. Segment 3: Transformation & Disruption 33:57   Accepting the President role during the pandemic. 40:00   The realities of what ‘after’ the pandemic looks like. 45:15   Blurring the lines: what is the role of a business in providing a social output for people? 49:09   “What matters is how you are trying to evolve the organization.” 53:06   Atos Medical: Passionate to make life easier for people who breathe through a stoma. Segment 4: Wrapping Up 58:39   Use an extensive filing system for emails. 1:00:34 Stay in touch via LinkedIn! Additional Information Contact Sean Killian: Sean’s LinkedIn Contact Gregg Garrett: Gregg’s LinkedIn Gregg’s Twitter Gregg’s Bio Contact CGS Advisors: Website LinkedIn Twitter

In this episode, Gina Cocking and Jeff Guylay conclude their discussion around the due diligence process related to the sale of a company. This episode is part of a four-episode series exploring the due diligence process that began with 003 on the business aspects of the due diligence process. EP003: Business aspects of due diligence EP004: Legal aspects of due diligence EP005: Accounting aspects of due diligence EP006: Technology aspects of due diligence Gina is again joined by our featured guest, Rob Humble, Senior Vice President of Strategy and Corporate Development at IAS. Rob shares his insights as a buyer on technology issues that arise in diligence. Gina and Jeff’s discussion highlights four key questions related to the technology aspects of due diligence: 1) who is doing what (who is leading the tech team, who is on the tech team, and what aspects of technology are outsourced)? 2) Who controls the intellectual property? 3) How much has been spent, and how much needs to be spent over the next few years? 4) Is the technology scalable for growth? In this episode, Colonnade Advisors addresses the following questions as related to the technology aspects of due diligence: Are technology aspects of due diligence applicable even if the company is not a technology company? (1:00) Gina: “Every company is tech-enabled, so every company is going to have some element of technology that they utilize every day. Disclaimer, this is not for technology companies. This episode is not a deep dive on the due diligence that a buyer or investor would conduct on a technology-focused company but instead a more general review of what all companies should think about when they're preparing to take on capital or sell the company.” When answering the question about who is doing what, where does a company start? (2:25) Gina: “Start with the easiest thing, and that's an org chart. Is there a chief technology officer who reports to the chief technology officer? Is there a database administrator? What is outsourced? Is there even a CTO? Is some of it done by a consulting firm that comes in weekly, quarterly, just on call? Who is doing the development, and who has the rights?” Does a company need proprietary technology to raise capital or be sold? (3:26) Jeff: “The in-house versus outsourced piece is particularly interesting especially for some of the smaller companies we work with, because a small company obviously may not be able to afford a CTO. Many of the clients we work with use off-the-shelf technology platforms, standard email, and other operating systems. The important issue is scalability.” What do investors look at during due diligence as related to technology? (3:00) Jeff: “They're going to come in and look through the financials and see where the costs are. They’ll look at the org chart and see who's doing what with whom.” What areas of technology are investors assessing during due diligence? (3:15) Jeff: “Everything from the reliability of the systems, cybersecurity, disaster recovery, the policies and procedures in place, and whether or not you’ve had any data breaches.” What should a company put together prior to a capital raise or sale? (4:57) Gina: “A system diagram. A piece of paper with a bunch of boxes that show laptops, servers, internet/cloud form, e-commerce backbone, CRM, and where all the systems are located.” What else needs to be compiled and documented? (5:47) Gina: “What licenses do you have? What technology do you own, and who built it? What is your cybersecurity around all these different technologies? What are the processes and procedures as documented in manuals? Another big area when assessing the technology is disaster recovery. If the electricity were to go out for three hours and you had to bring everything back up, can you do it?” Does having proprietary technology make a company more valuable in a sale? (9:34) Gina: “One thing that we run into sometimes with companies that we're working with is they'll say, "I am different from my competitors because I have a better operating platform. We spent $4 million on it, and it is better than what my competitors are using. Is my company worth more?" That question always causes me to pause. It's great to have your own platform; it may make you more efficient, and we will want to explore and test whether or not it increases your efficiency as a company. But unless you can actually take that technology and sell it to other customers, it may not have intrinsic value unto itself.” Should I build proprietary technology prior to selling my company? (10:27) Jeff: “We encounter the buy versus build discussion all the time. It is challenging because entrepreneurs may be thinking in terms of an outlandish multiple. It depends on whether or not that technology is unique enough, flexible enough, adaptable, and scalable.” What are some of the scalability issues around technology in the sale of a company? (11:45) Gina: “Buyers will ask: "How much is it going to cost me to keep this up? When do we have to upgrade? How do we know you're keeping up with all the regulatory, compliance, latest and greatest in cybersecurity?” In middle market companies, these questions are hard to cover with a four-person tech department.” Does a company need to upgrade systems prior to a sale? (13:23) Jeff: “We're working with a client right now that has been on an older loan management platform for 25 years, and as part of the capital raise we're going to help work with them to upgrade systems. They're going to jump from one smaller universe loan management system to a more widely adopted one. The transition from one system to another is always tricky and expensive and takes longer than you think. There's business risk of moving from one platform to another. We've talked about in other podcasts the importance of hitting your numbers and focusing on your business. To layer on a systems transition or integration project at the same time is probably more than you want to bite off.” How are technology investments accounted for in valuing a business? (14:45) Gina: “When looking at the costs of technology, you look at the past investments and future investments. For past investments, we’ll look at: Was it properly accounted for? Were technology costs capitalized where they can be capitalized? Oftentimes we'll find that these expenses could have been capitalized. We’ll do a proforma adjustment to the financials to add back those costs. These costs will not count against you on your EBITDA, as it was a one-time charge. Then we'll look at future technology expenses and we will model that out in our forecasts.” How is technology when used as shared services between divisions or subsidiaries accounted for in a transaction? (16:27) Jeff: “Some of our clients, particularly larger corporate clients, are operating as divisions or subsidiaries of larger businesses. They share services with the parent organization. We go through the financials carefully to make sure that you have the right expenses associated with the business, you have the right licenses that can transfer with the business that you're selling, boxing the whole thing up to make sure that the package is complete.” Why is scalability a key issue in technology due diligence? (17:43) Gina: “When a buyer is evaluating a company, they are looking at future growth. A big part of that is how scalable is the technology.” What is typically more scalable, off-the-shelf technology or home-grown systems? (18:00) Gina: “Typically, off the shelf and web-based systems should be very scalable. You can get to two, 10, 20 times the current size, and the technology should be able to scale with you. When the technology is homegrown, there will be a deeper investigation into how scalable that technology is and what costs are involved with scaling that technology.” Why is a technology review important when selling a company? (19:10) Jeff: “It all comes back to valuation and the forecast that we present to the buyers. Even if these aren't technology companies, they're all tech-enabled, and you don't want them to be tech disabled. We absolutely have to be able to defend the diligence that the platforms and systems and policies and procedures we have in place can support the growth plan.” Gina invites Rob Humble, Senior Vice President of Strategy and Corporate Development at IAS, who shares his perspective from the buy side of a transaction as related to technology due diligence. What exactly are you looking for in technology diligence? (21:45) Rob: “For us, it's not about whizzbang innovations; it's not about is it bigger, faster, better. Generally speaking, what we're looking for is sustainability. Is it secure? Is it written on a solid code base? Is it written on the right tech stack that we're going to be able to support long term?” Featured guest bio and contact information: Rob Humble Email: rhumble@iasdirect.com Rob Humble leads strategy and corporate development for IAS. Before coming to IAS, Rob held strategy and corporate development leadership roles with financial services firms NetSpend and Rent-A-Center. Prior to his time in financial services, Rob held strategy, finance, and operations roles at Fortune 500 companies spanning the automotive, defense & aerospace, and chemical industries. Rob earned his bachelor's degree in mechanical engineering from Washington U. in St. Louis, graduating magna cum laude. He also holds an MBA from Harvard Business School. Rob lives in Austin, TX with his wife and two young kids. He enjoys hanging out with his family, distance running, binge-watching the hottest TV shows, watching Oklahoma Sooners football, and indulging in random interests including knitting, furniture building, and home improvement. About Our Hosts Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private-equity backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Waukesha, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79 and 99 securities licenses. About Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm’s Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan’s Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University’s Kellogg Graduate School of Management and a Master of Engineering Management from the University’s McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth’s Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders’ take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million. If you enjoyed this episode, subscribe to the podcast, and please consider leaving us a short review. Learn more about Colonnade Advisors: https://coladv.com/ Follow us on LinkedIn: https://www.linkedin.com/company/colonnade-advisors-llc_2/

In this episode, Gina Cocking and Jeff Guylay continue their discussion around the due diligence process related to the sale of a company. This episode is part of a four-episode series exploring the due diligence process that began with 003 on the business aspects of the due diligence process. EP003: Business aspects of due diligence: https://coladv.com/podcasts/003/ EP004: Legal aspects of due diligence: https://coladv.com/podcasts/004-due-diligence-deep-clean-and-hygiene/ EP005: Accounting aspects of due diligence (today’s episode) EP006: Technology aspects of due diligence (coming soon) In today’s episode, we invite our featured guest, Joe Kaczmarek, to share his insights on how companies can best prepare for an M&A transaction. Joe is the National Fintech practice leader at RSM, a leading provider of audit, tax, and consulting services focused on the middle market. Show Notes: There are six key takeaways from the episode (35:17) Start early Review your financials monthly Keep books in GAAP (Generally Accepted Accounting Principles) Get an audit Prepare forecasts for your business and track achievement to forecast Invest in the finance department. If your goal is to sell your company, the number one action you should take (related to accounting and finance due diligence) is to get a good CFO In this episode, Colonnade Advisors addresses the following questions as related to the accounting aspects of due diligence: When should an owner start preparing to sell their company? (01:20) Gina: “It starts years in advance. At the very basic level, a business owner or leader of a company should be reviewing the financials on a monthly basis. The reason is to get comfortable with the cadence of their business so that they can talk to the financials.” Does a company need a public audit prior to selling the company? (1:40) Gina: “We recommend all companies have a financial audit for several years before they go to market.”  What is the difference between an audit and a compilation? (01:58) Gina: “A compilation is when accountants come in and put your financials together for you. They may even do it on a GAAP basis. An audit means that the accounting firm is doing a deep dive into the numbers. They’re looking at bank reconciliations. They’re doing different types of testing for fraud and for receivables and payables, et cetera. It’s a very involved process, but it is a must for a business that is planning for a successful sale.” Do I need a financial forecast? (02:35) Gina: “A company should keep a forecast and measure themselves to the forecast and plan. The reason for this is twofold: 1)  I believe that you only get to where you’re going if you plan for it, and 2) buyers are going to look at the company’s financial forecast and how they are doing compared to that forecast.” What other financial statements must be in order? (03:54) Gina: “Another good thing to prepare for a sale process is a monthly data book. This data book includes the income statement, cash flow statement, balance sheet, and MD&A (Management Discussion and Analysis).” How does a company select an accounting firm to work with on accounting due diligence? (06:25) Gina: “I usually recommend that companies not go with the local firm that does their tax returns. Typically (I recommend) a regional accounting firm, or a national one, because you need a team that can defend its choices in accounting principles interpretation.”  When should a company start working on accounting due diligence? (08:20) Jeff (07:37): “The sooner the better. The first audit is the worst. After that, it gets a little bit easier. Getting that process rolling is important.” When is meeting the financial forecast key? (10:21) Gina: “The financial forecast is crucial when we’re actually selling the business. The key is when you’re in the sale process, from the moment we release that confidential information memorandum (CIM) until the check clears and the business is sold, the company has got to make its numbers.” What is the management team’s role in owning the forecast? (11:44) Jeff: “It’s important that the management team understands and owns the forecast because they’re going to have to live with it. The financial forecast obviously develops the metrics upon which you’re going to be judged either through management contracts, earn outs or just general performance. You really want to be confident that you’re going to hit the numbers one, two, three years out.”  What is an MD&A (Management Discussion and Analysis)? (13:45) Gina: “A paragraph or a page and a half that explains the numbers, e.g. ‘Revenues were up by X because we sold Y more; expenses were down by Z because we lost three people in headcount.’”  How should revenues be broken out? (14:12) Gina: “By number of products sold, pricing, number of customers; whatever metrics that are core to your business. Companies that can do that generally have a good finance department.” What are some common missteps Colonnade sees in accounting practices of middle market companies? (16:40) Gina: “The finance department is looked at as a cost center.” Owners keep the books themselves or use a part-time bookkeeper. When companies don’t hire a CFO, there’s a potential problem.  What are some other missteps management can make when getting ready to sell their company? (18:00) Jeff: “When the CEO is the master of everything. He’s the head of sales, he’s the head of marketing, he’s the head of IT sometimes, and in a lot of cases, he or she is the CFO. That’s a problem because an investor could come in and say, ‘Well, I’m not going to pay $50 million for this one guy or this one woman. Where’s the team?’” When do you know that a company has the infrastructure to be sold? (18:35) Jeff: “The real enterprise value gets built when you say, ‘This is a business that is going to be my legacy, but I don’t need to be here as the CEO or the founder. I built this business. I built out a team. The finance function is all built out. The marketing function is built out. The sales function is built out. This business runs on its own. And so if you want me here or not, that’s fine, but my team is really more important than I am.”  Why does a company wanting to be sold need a CFO? (19:00) Gina: “Without a CFO, when a buyer comes in, they will do a negative adjustment to your historical financial statements to fill that role. That CFO role will be built into your valuation regardless. So invest in the CFO. It’s going to be worth far more than not doing it.” What is the difference between GAAP and cash accounting? (20:22) Gina: “Here’s the non-CPA’s way of explaining GAAP. Under GAAP, the timing of your revenues and expenses need to match, and they need to also match the timing of your liabilities, which means if you are selling a service that is a service for six months, you receive the payment upfront, the revenue upfront, you’re going to have to recognize that revenue over six months.” What is an example of GAAP accounting vs. cash accounting? (21:00) Gina: “ A common example is payroll. Accruals should be done for payroll. Let’s say you pay your employees every other Friday. The month doesn’t always end on the fourth Friday, so you end up having to pay in the following month, let’s say the Wednesday the following month. (When you pay in the following month) you’re paying for the prior month’s work. You need to do an accrual for that payroll so it matches the month in which it occurred. So accruals need to be done under GAAP and revenue needs to be recognized in line with what the services or the products provide.” What industries can use modified cash accounting? (21:36) Gina: “We work a lot in the F&I (Auto Finance and Insurance) and administrator space. (These companies) can be sold on a modified cash basis. But that doesn’t happen in all industries.” How does modified cash accounting work when selling a business in the F&I or administrator space? (22:16) Jeff: The important thing is understanding the difference between the two accounting processes or procedures. In the cases where it’s beneficial to the clients to present themselves on a cash or a modified cash basis, we’re certainly going to do that to maximize value. There has to be a spreadsheet that says, here’s the audit according to GAAP, and here are the cash financials that we want you to value the company on, and here are the adjustments we’ve made to get there, and it has to be logical and make sense and be consistent.” Gina invites Joe Kaczmarek, an expert in audit tax and consulting services, to share his perspective on due diligence accounting aspects. What is the difference between an audit and a sell side Quality of Earnings (QOE)? (24:19) Joe: An audit is to go back and verify information at a point in time. We’re validating the accuracy of your balance statement and your income statement. When we do a quality of earnings (QOE) report, we’re really stripping out one-time expenses, one-time revenues, and coming down to a real accreditable earnings number on a cash basis. From a quality of earnings perspective, it’s also much broader.”  How many years back should an audit go? (27:02) Joe: “What I typically say is, ‘If you want three years in the marketing documents, it typically presents the best if those are all audited.’ (Three years). But more importantly than how many years is having a firm that really understands the industry and is really nailing down those things that could come up in diligence.” What are the bare minimum processes and procedures a firm should have in place before they go to market? (28:02) Joe:  “The big thing is having a CPA on staff and having that person really understand what’s required. We like to see monthly financial statements, on not only a cash basis but an accrual basis, a GAAP basis.” What else should companies thinking of selling consider? (28:34) Joe: “investing in your financial reporting group. That’s not something that’s providing revenue so it’s often overlooked. You really need to have the infrastructure there to be able to report and provide the information necessary to go through diligence.”  How quickly should a company be able to close the prior month’s books? (29:07) Joe: “It really depends on the complexity of the organization and the systems they have in place. It can take two days to two months. (However,) those companies taking two months realize very quickly through this process that that’s not going to be adequate (fast enough). If it’s a private equity group coming in to acquire them, they’re going to need reporting on a monthly basis that’s going to be out within a week or two from the month-end or the year-end.” What is your view on QuickBooks? (30:36) Joe: “Depending on the industry that you work in, Quickbooks may be adequate. QuickBooks could be fine for smaller companies and midsize companies. But you’ve got to realize what the limitations with QuickBooks are (such as controls, access, and integration).” How should companies account for a PPP loan? (32:40) Joe: “There is going to be a portion of it that’s going to be forgiven, if not all of it. You should record it as debt. Then as you get approval for that forgiveness, that’s the point in time when it should flow through your income statement for GAAP purposes. If you look at a transaction, that’s one of those one-time items that will most likely be backed out, and I would say that’s non-operating revenue, so it should be down below the line.” What’s one piece of advice you would give a company that’s about to go through an M&A process? (33:47) Joe: “Engage a reputable firm to conduct sell-side due diligence. Sell-side due diligence firms will dig into the company’s financial information and figure out where there may be issues. If identified issues are likely to be deal-breakers, then the company will need to pause the process until the issues are fixed.” Featured guest bio and contact information:  Joe Kaczmarek Email: joe.kaczmarek@rsmus.com Joe Kaczmarek services as the National Fintech leader at RSM. In this role, he is responsible for driving the firm's strategic objections in fintech, while assisting traditional financial service clients with their digital transformation. Joe also leads RSM's specialty finance practice for the Great Lake Region. Joe has expertise servicing fintech and online lenders, direct to consumer lenders, sales financing lenders, purchasers of automobiles and other retail installment contracts, rent-to-own companies, title lenders, purchasers of distressed debt, mortgage originators and servers, and various types of commercial lenders. Joe has vast experience providing and supervising audit, consulting, and risk management services to entities ranging in size from startup companies to international organizations. Joe also has extensive experience in transaction advisory services working with private equity groups, venture capital firms, and clients. Joe earned his bachelor's degree and MBA from Eastern Illinois University.   Host Information Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private-equity backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Waukesha, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79, and 99 securities licenses. Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm's Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan's Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University's Kellogg Graduate School of Management and a Master of Engineering Management from the University's McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth's Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders' take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million. *** For more information, read Colonnade's blog post, Accounting Due Diligence: https://coladv.com/blog If you enjoyed this episode, subscribe to the podcast on iTunes, and please consider leaving us a short review. To learn more about Colonnade Advisors, go to https://coladv.com/ Follow us on LinkedIn, https://www.linkedin.com/company/colonnade-advisors-llc_2

On today’s episode, we have the brilliant Michael Hyatt, serial investor and tech entrepreneur. Michael is the Co-Founder of BlueCat, which was sold to Madison Dearborn Partners, and he is ranked as one of Canada’s top entrepreneurs. Michael is an active philanthropist who chairs the Hyatt Family Foundation. We are honoured to share this audio because this interview was recorded back in December 2018, during the earlier days of our movement. Many of the topics will resonate with leaders, especially during this pandemic. Michael discusses the growing trend of anxiety among entrepreneurs and leaders, and what it takes to be successful in the business world. In particular, self-care is absolutely key, revolving around a trifecta: diet, sleep, and exercise. He also shares his humble beginnings, growing up with little money, and his work with various charities now. Tune in now! WHAT YOU WILL LEARN     What it is really like to be an entrepreneur     His journey around pressure, success, and anxiety     His business philosophy and practical steps for self-care Learn more at https://realtalkmvmt.com/

Due diligence is a crucial component of any M&A transaction. In this episode, Gina Cocking and Jeff Guylay discuss the second topic in our due diligence series--legal due diligence. Jeff is joined by featured guest, Will Turner, a partner at Steptoe & Johnson, to discuss lessons learned and pitfalls that sellers can avoid as they think about getting ready to go to market, from a legal due diligence perspective. Later in the episode, Gina is joined by our second featured guest, Rob Humble, Senior Vice President of Strategy and Corporate Development at IAS, who shares his insights as a buyer on legal issues that arise in diligence. This episode is one of four on M&A due diligence. Episodes 003 focuses on business due diligence, and later episodes will focus on accounting and technology diligence. Show Notes: Jeff Guylay talks about legal due diligence being a sub-set of the broader due diligence process and recaps why diligence is conducted – to thoroughly understand the company to best position it in the market and to prepare the company for buyer and investor diligence (00.38) Gina Cocking talks about the different legal groups involved in a transaction, including corporate M&A attorneys, corporate contract attorneys, employment attorneys, litigation attorneys, regulatory attorneys, and tax attorneys (02:29) Jeff and Gina discuss the importance of hiring a good law firm in a transaction (03:34) Gina outlines what the law firms are reviewing during diligence, including contracts, formation documents, shareholder documentation, employment agreements, applications and licenses (04:42) Jeff comments that the legal diligence process is like a house cleaning exercise. There are instances in which licensees or ways of doing business historically may not make sense going forward (06:16) Gina talks about the importance of having attorneys review materials years before going to market. It is good business hygiene (09:04) Jeff discusses the role of a financial advisor in the legal review. Financial advisors are not attorneys but will coordinate the assembly of information, generally via massive Excel trackers, and ultimately securely disseminate information. Over a thousand documents are collected during typical legal diligence, and all get captured in an electronic data room (09:20) Gina discusses the importance of having a good legal tracker (11:15) Jeff talks about how litigation is inevitable in the corporate world and how keeping track of the details of each incident is important as it demonstrates transparency and organization (12:54) Gina talks about how legal issues may impact company valuation (14:16) Gina and Jeff discuss how a business that litigates aggressively might be perceived negatively as some people shy away from folks that are quick to sue (14:52) Jeff discusses background checks (15:43) Will Turner, a partner at Steptoe & Johnson, joins the show and talks about lessons learned or pitfalls that sellers can avoid as they think about getting ready to go to market from a legal due diligence perspective. One important concept is to provide all information upfront to avoid surprises. The second is identifying who within your management and employee group is a source for valuable information about the company and including them in the process if possible (17:40) Rob Humble, Senior Vice President of Strategy and Corporate Development at IAS, joins the show to share his thoughts as a buyer on legal issues that arise in diligence. For Bob, a big concern is the trend in legal activities (21:21) Rob talks about how an ongoing legal situation with financial implications could very well have an impact on valuation (21:48) Gina’s closing thoughts on today's discussion on legal diligence: The three key takeaways are, 1) it is never too early to get your attorney involved to prep for diligence; 2) legal issues will not necessarily kill the deal, but should be addressed early; and 3) sellers need to know where the bodies are buried and need to discuss the issues with their advisors upfront (22:35) Featured guests bio and contact information: Rob Humble Email: rhumble@iasdirect.com Rob Humble leads strategy and corporate development for IAS. Before coming to IAS, Rob held strategy and corporate development leadership roles with financial services firms NetSpend and Rent-A-Center. Prior to his time in financial services Rob held strategy, finance, and operations roles at Fortune 500 companies spanning the automotive, defense & aerospace, and chemical industries. Rob earned his bachelor's degree in mechanical engineering from Washington U. in St. Louis, graduating magna cum laude. He also holds an MBA from Harvard Business School. Rob lives in Austin, TX with his wife and two young kids. He enjoys hanging out with his family, distance running, binge-watching the hottest TV shows, watching Oklahoma Sooners football and indulging in random interests including knitting, furniture building, and home improvement. Will Turner Email: wturner@steptoe.com Will Turner has more than two decades of experience in corporate and securities law, primarily with application to cryptocurrency, fund formation, investment transactions, and mergers and acquisitions. He also advises clients on matters involving capitalizations, project finance, restructurings and joint ventures. Will is well-versed in securities offerings, '40 Act work, and corporate governance matters. He also advises clients on distribution, sales, technology and financial services commercial agreements. Will has represented a number of European companies and investors in their acquisitions, investments, commercial, and regulatory matters in the United States. He has led numerous fund and joint venture formations. About the Hosts: Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private-equity backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc. Gina received her BA in Economics and an MBA from the University of Chicago. Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm’s Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan’s Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University’s Kellogg Graduate School of Management and a Master of Engineering Management from the University’s McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth’s Thayer School of Engineering. About the Show: Get the insiders’ take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million.

In this episode, Gina Cocking and Jeff Guylay discuss business due diligence.  Due diligence is so important in any M&A transaction that we're devoting four episodes to the topic. Please stay tuned for upcoming episodes 004 through 006 about Due Diligence.  In addition to business due diligence, we'll cover financial, legal, and technology-related aspects of due diligence. Here are two key points from the discussion on business diligence in today's episode: 1) Organization is crucial in this process; every document will be requested, every question will be asked. 2) Prepare so that there are no surprises; every rock will be overturned.  Essentially, a seller needs to tell their advisors the good, the bad, and the ugly. You’ll see why we’ve named this episode “Uncovering the Skeletons in Your Closet”. This episode features guest Rob Humble to provide his insights from his involvement with transactions as both the buyer and seller. Rob is the Senior Vice President of Strategy and Corporate Development at IAS.  In this episode, Gina and Jeff of Colonnade Advisors address the following questions: What is due diligence? (02:18) The process of working with the management of a company and, at a very high level, learning everything that possibly can be learned about the company. Colonnade Advisors turns over every rock to understand all of the strengths and weaknesses of the company, understanding both the past, present, and future. We understand why the company does certain things, what the contracts say, and what its obligations are. We do an assessment so that when the buyer or a lender comes in, they know what they're getting into. What is examined during due diligence? (02:48) Employee records, contracts, financials, lawsuits, marketing plans, training manuals, handbooks, analyzing turnover, customer concentration, unit economics, etc. All the skeletons in the closet, everything about the business. How does due diligence affect the Purchase Agreement? (04:41) A large component of the purchase agreement is the reps and warranties section, where the seller represents that everything they have shown and shared with the buyer is true and correct, etc. The legal agreement, the purchase agreement, governs the transaction and the future. What is a confidential information memorandum (CIM)? Jeff Guylay:  “When I think about the CIM, the confidential information memorandum, or the book, that's really a mix of disclosure, risk, and market business and how great is this company and what are the future prospects... also what's happened in the past and what are the risks for a future buyer, going forward.” Who is involved in due diligence? (08:13) Gina Cocking: “It’s handled by a number of people. If it's a private equity firm, the private equity firm team members are very knowledgeable and will ask a lot of questions in the business diligence segment. There will also be consultants that are hired from time to time, specialized consultants that understand the industry or the specific product that's being done, or sometimes they're HR consultants or specific marketing-types consultants.” What happens first in Colonnade’s due diligence process? (08:55) Jeff: “When we get hired to work with a client, the first thing we do is put together a due diligence request list and a data (request) list. We get together with the company, and we spend the better part of a day, and sometimes a day and a half, going through our lists and just asking question after question after question.”  What is the purpose of Colonnade’s due diligence? (09:35) Jeff: “The point of us going through and asking all these questions is to put our investor hat on or our buyer hat on and ask 90% or 95% of the questions that they (the buyer and/or investor) are going to ask. We want to make sure that we have all the right answers...before they're required by a buyer, and we want to make sure the story is consistent.” What if there are skeletons in the closet? (10:10) Jeff: “If there are any problems, let's hear about it now, because the worst thing you want, as we've talked about, is to have surprises later on or something come up at the last minute that can kill a deal or have a major change in pricing or terms.” Gina (10:34): “I'm your business confessor, for all the ugly and dirty and you-wanted-to-hide-it-under-the-bed (items; it's) time to talk about it because it will come out later, and the worst thing is to not be prepared for when that happens, so we need to know everything.” The advisor-client relationship is one of trust. What are the first questions asked when kicking off Colonnade’s diligence session with a new client, and how do those questions add to the story? (12:49) When and where was the company formed? What is the corporate history? What are the major operating entities? What are they doing, what's the purpose of them? Is there any tail liability that we should be thinking about or carving out? Why are these questions important in the due diligence process? (13:51) Gina: “Everybody remembers a story. It's great to hear the owner's story because we often are retelling their story later on.” Jeff (14:36): “When we launch into the market..we're the front line of communications. We're expected to be able to answer 90% or 95% of the initial questions that come through. We're telling the story, and the (Colonnade) diligence process is meant to educate us, to make sure that we're as fully informed about the history and the prospects of the company as possible.” What are some of the legal aspects of the diligence process? (15:00) Gina: “Not only do we have the different legal entities, but we also have different tax structures, sometimes they're C-corps, sometimes they're S-corps, and so you have all these different legal entities, all these different tax structures.” Jeff (17:21): “This is usually where we request the name and contact information of the attorney. If you have ten entities and there is no holding company, we should probably do some leg work ahead of time and clean things up. I know we've done that on a number of deals.” (Please note that the Middle Market Mergers & Acquisitions podcast will dedicate an entire aspect to the legal aspects of due diligence) What kinds of documents are requested in the due diligence process? (18:16) Gina:  “We're going to ask for all the formation documents, operating agreements, shareholder agreements, articles of incorporation, the state articles of incorporation, that can be three or four documents per legal entity... “ Jeff (19:10): “In addition to the shareholder documentation, we're looking for board minutes, board packages, (and) all the corporate organizational materials that have been accumulated throughout the years.” What important business aspects tend to come up during the diligence process? (20:32) Gina: “An important component of any transaction is customer concentration. That has a big impact on valuation, and there's a very logical reason as to why. If a customer represents a lot of the company’s revenues, the buyer's concern is, ‘Wow, what if that customer walks? What if you lose that customer?’ And then I just bought a company and it has 60% of the revenues that I thought it had. There are a number of PE firms... where their fund will say, ‘We cannot buy a company that has customer concentration of greater than 20% for one customer or 60% for the top three customers." Jeff (22:17): “The next topic we cover when we're talking about revenue is the sales force, so sales and marketing in general. We get a good picture of what they're selling and who they're selling to, and now the question is how are they selling? Do you have a direct sales force? Is it a channel strategy? What are the different ways that this company goes to market, and how are they selling stuff?”  What are some other questions that come up during business due diligence? (22:57) Jeff: “How do you pay your sales force? What sort of non-solicitation or non-compete agreements do you have with your sales force?  How institutionalized are the relationships? How long have they been around?”  Gina (24:29): “A (common) situation is when the buyer says, ‘I would like to speak to the end customer.’  We often get into discussions with the buyers about when those conversations will happen. Jeff (25:27): “The other thing I would comment on in sales and marketing is getting a sense of competitors, so what does the competitive landscape look like? (26:02): Part of the go-to-market discussion is how are you going to market against your competitors? So, what are they doing differently than you? How do you compete against them? And how are you going to win?”  Gina (27:00): “The next area that we start looking into is marketing channels and marketing partners. Clients sometimes have a partnership where they are co-marketing with another entity. We get really excited about marketing partnerships. It's not necessarily because there are a lot of sales coming through those channels, but because of the validation that they give to the company.” Gina (28:38): “The other side of sales is the cost of goods sold. Who are your vendors? We're going to look into all of your vendor relationships.” (29:32): “We will take a look at the pricing from the vendors. We'll be looking at the contract terms with the vendors.”  Gina invites Rob Humble, Senior Vice President of Strategy and Corporate Development at IAS, who shares his perspectives from both the buy and sell sides as related to business due diligence. Gina: “How do you stay organized and keep the process moving quickly?” (32:10) Rob: “It's definitely like herding cats.  Upwards of 100 people, between advisors and internal folks. I believe, fundamentally, that time kills deals; so you have to be as efficient as possible.” It really comes down to two fundamental points in the process: 1) Preparation (Pre-game) 2) Truly committing to the sale process (Game on). “(Pre-game) we literally took our own medicine, and it took us a few months of answering our own questions before we had a data room that we felt was full. You can be much more strategic about the way that you present (the information) in your sales material, and you can also be more strategic about the rate and timing of when you release those documents. We used the diligence checklist that we use for the buying process...for creating our own internal data room.” Gina: “I think one of the biggest problems that companies run into is trying to stay the course and do their day job (running the business) while going through a sale process without all the wheels falling off the bus.” (34:00) Rob: “There are three components (to our success) that come to mind: 1) Designate a leader of the process. The best person for this is that utility player that is great at coordinating across the team and ensuring the organization is really given the attention that it deserves. You need a utility player that knows the organization, knows the people, knows the data, knows the system, and can run point for you. 2) Form a team that meets every week. That's a cross-functional team with the players that have access to the data systems and decision-making authority that you need to answer questions and have them be supported by the evidence that will ultimately get dug up in later diligence.  3) Follow a clear process. We were very careful. Gina:  “You did quite a few acquisitions over the last four or five years. But you were also involved in the sale of IAS. How did it feel to be in the hot seat? I mean, the tables were turned.” (39:00) Rob (39:17): “I loved it.  A sales process, at the end of the day, is just telling a story and supporting that story with evidence to make it as believable and credible as you possibly can. I loved the process of understanding what our story is, building the dataset to support that story, and then going out and telling the story.”  Gina: “Now, looking back on all that you've done, is there one piece of advice you would give to someone that is getting ready to go through an M&A process?” (40:07) Rob (40:36): “Get the right advisors.”  About Our Guest Rob Humble leads strategy and corporate development for IAS. Before coming to IAS Rob held strategy and corporate development leadership roles with financial services firms NetSpend and Rent-A-Center. Prior to his time in financial services, Rob held strategy, finance, and operations roles at Fortune 500 companies spanning the automotive, defense & aerospace, and chemical industries. Rob earned his bachelor's degree in mechanical engineering from Washington U. in St. Louis, graduating magna cum laude. He also holds an MBA from Harvard Business School. Rob lives in Austin, TX with his wife and two young kids. He enjoys hanging out with his family, distance running, watching Oklahoma Sooners football, and indulging in random interests including knitting, furniture building, and home improvement. Email: rhumble@iasdirect.com About Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors. She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private-equity backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Waukesha, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79 and 99 securities licenses. About Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm’s Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan’s Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University’s Kellogg Graduate School of Management and a Master of Engineering Management from the University’s McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth’s Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About the Middle Market Mergers & Acquisitions Podcast Get the insiders’ take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million. If you enjoyed this episode, subscribe to the podcast, and please consider leaving us a short review. Learn more about Colonnade Advisors: https://coladv.com/ Follow us on LinkedIn: https://www.linkedin.com/company/colonnade-advisors-llc_2/

The process of selling your company can be neatly categorized into four phases, taking place roughly over a period of 16 weeks.  The four phases are:1) Pre-Marketing2) Go to Market3) Management Presentations / Buyer Due Diligence, and4) Exclusivity / Documentation. In this inaugural episode of the Middle Market Mergers & Acquisitions podcast, Gina Cocking and Jeff Guylay focus on the first of the four phases: Pre-Marketing. To conclude the episode and to hear the perspective of a CEO who has recently been through the sales process, we are joined by Elizabeth Davies of Stonemark.Please stay tuned for the upcoming episode 002 where we discuss in detail phases two through four of the process of selling your company. Takeaways from Gina and Jeff in this Episode: Jeff Guylay outlines the 16-week sales process timeline in four phases: pre-marketing, go to market, management presentations / buyer due diligence, and exclusivity / documentation. (1:00)  Download the sales process chart here: https://coladv.com/wp-content/uploads/Four-Phases-with-graphic.pdf Gina discusses why phase one, the pre-marketing phase, can take the longest (4:30) Jeff and Gina discuss Colonnade’s due diligence process (what documents and requests are made during their initial diligence) (05:32) The role of the investment banker as the “confessor” to benefit buyer and seller (07:34) Gina talks about how diligence helps develop the story - the narrative and the financial model (09:22) Jeff outlines the importance of having an accountant for telling the financial story of the business (16:17) Gina and Jeff discuss how phase one (pre-marketing) is a difficult, but necessary, first step (21:03) Gina touches on the importance of retention packages for management during the sale process (22:03) Takeaways from Elizabeth Davies in this Episode: Elizabeth Davies describes the sales process as if baking a cake. We (the business) make the cake, and the investment bankers (Colonnade Advisors) put the icing on the cake to make it as pretty as possible. Being a decorated cake is the ideal way to sell your company (28:26) Elizabeth emphasizes the importance of having a realistic idea of your company’s value, and staying focused on running the business during the sale process (29:28) About Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors.  She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private-equity backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Waukesha, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79 and 99 securities licenses. About Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm’s Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan’s Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University’s Kellogg Graduate School of Management and a Master of Engineering Management from the University’s McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth’s Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About Elizabeth Davies Elizabeth Davies is the President of Stonemark Inc., a full service insurance premium finance company founded in 1983 and headquartered in Frisco, Texas. Elizabeth brings over 30 years of financial services expertise to Stonemark and oversees all corporate functions, including sales and marketing and Stonemark’s banking relationships. Elizabeth is focused on sales growth and expansion into new markets. Under Elizabeth’s leadership, Stonemark was acquired in 2018 by H.W. Kaufman Group, a global network of insurance companies.  Website: www.stonemarkinc.com  About the Middle Market Mergers & Acquisitions Podcast Get the insiders’ take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million. If you enjoyed this episode, subscribe to the podcast, and please consider leaving us a short review. Learn more about Colonnade Advisors: https://coladv.com/ Follow us on LinkedIn: https://www.linkedin.com/company/colonnade-advisors-llc_2/

In this second episode of the Middle Market Mergers & Acquisitions podcast, Gina Cocking and Jeff Guylay continue their discussion of the four phases of selling your company.  The process of selling your company can be neatly categorized into four phases, taking place roughly over a period of 16 weeks.  The four phases are:1) Pre-Marketing2) Go to Market3) Management Presentations / Buyer Due Diligence, and4) Exclusivity / Documentation. In Episode 001, Gina and Jeff focused on the Pre-Marketing phase.  In Episode 002, the focus is now on the subsequent phases, two through four, from Go to Market to Exclusivity/Documentation, when the deal (sales process) is finalized and the company is sold. We again invite the president of Stonemark, Elizabeth Davies, to provide her perspective on the process, including communication with employees as well as successfully running the business while the company is up for sale. Two key points from the first two Episodes of the Middle-Market Mergers & Acquisitions Podcast: A disciplined process delivers the best outcome in terms of price and terms.  Time is the enemy. The longer the deal takes, the higher the risk that it goes sideways. We invite you to download our 16-week sales process timeline to see how Colonnade Advisors typically approaches the process of selling a company. Takeaways from Gina and Jeff in this Episode:    Gina Cocking and Jeff Guylay describe phase two of selling a company: Go To Market (03:07)  Gina outlines how Colonnade Advisors pre-qualifies potential buyers in the sales process (03:53) Jeff discusses the first indicator of buyer interest, the non-disclosure agreement (NDA) (08:05) The confidential information memorandum (CIM) follows the NDA (08:32) The indication of interest (IOI) culminates phase two (11:13)  Jeff outlines how an IOI helps select who’s really serious about proceeding (14:38) Gina defines the electronic data room and its importance (16:43) Gina discusses how allowing buyers to conduct increased diligence upfront typically leads to more informed and better bids later on (17:26) The importance of the social aspect of the sale process and the vetting of both buyer and seller (18:26) Jeff elaborates on how phase three is a two way interview between buyer and seller (19:33) The end of phase three culminates in a process letter asking for final bids or letters of intent (LOI) (20:54)  Jeff details the usefulness of an LOI and the power shift towards the end of the sale process (21:23) Gina defines the post-LOI exclusivity and confirmatory due diligence phase (23:38) Jeff on phase four and simultaneous close and funding vs delayed closing and funding (25:35) Takeaways from Elizabeth Davies In this Episode:  Elizabeth Davies emphasizes the importance of not disclosing details of the deal to company employees until the deal closes. Selling your company can create uncertainty for your employees (30:02) Elizabeth shares how much can be learned about one’s self and others during the process of selling your company (31:25) Elizabeth describes the concern Stonemark had for the employees during the sales process. Employees are critical to the business (32:03) Elizabeth shares her surprise on the buyer’s focus on cybersecurity during the sales process (33:09) Elizabeth provides advice to other CEOs thinking about selling their company: “Focus on the business” (33:50) About Gina Cocking Gina Cocking serves as the Chief Executive Officer of Colonnade Advisors.  She returned to Colonnade as a Managing Director in 2014. Gina began her career in investment banking at Kidder Peabody, was an analyst at Madison Dearborn Partners and an associate at J.P. Morgan & Co. She was a Vice President at Colonnade Advisors from 1999 to 2003. She left Colonnade to gain operating experience as the Chief Financial Officer of Cobalt Finance, a specialty finance company. She went on to become the Chief Financial Officer of Healthcare Laundry Systems, a private-equity backed company for which she oversaw the successful sale to a strategic acquirer. Gina served as the Line of Business CFO – Consumer Banking and Lending at Discover Financial Services. Gina serves on the Board of Directors of CIB Marine Bancshares, Inc., a bank holding company based in Waukesha, Wisconsin, that operates banking offices in Illinois, Indiana, and Wisconsin. Gina received her BA in Economics and an MBA from the University of Chicago. Additionally, Gina holds the Series 24, 28, 79 and 99 securities licenses. About Jeff Guylay Jeff Guylay is a Managing Director of Colonnade Advisors. Prior to joining Colonnade in 2000, Jeff was an investment banker at J.P. Morgan in the firm’s Mergers & Acquisitions and Fixed Income Capital Markets groups in New York. He also spent several years in J.P. Morgan’s Chicago office. Jeff has over 20 years of M&A and investment banking experience and has served as lead execution partner on over 25 M&A and financing transactions at Colonnade. Jeff received an MBA from Northwestern University’s Kellogg Graduate School of Management and a Master of Engineering Management from the University’s McCormick School of Engineering. Jeff received a BA from Dartmouth College and a BE from Dartmouth’s Thayer School of Engineering. Jeff holds the Series 7, 24, 63, and 79 securities licenses. Jeff serves as a director of the non-profit Nurture, an organization dedicated to enhancing the nutrition and wellness of children and families. About Elizabeth Davies Elizabeth Davies is the President of Stonemark Inc., a full service insurance premium finance company founded in 1983 and headquartered in Frisco, Texas. Elizabeth brings over 30 years of financial services expertise to Stonemark and oversees all corporate functions, including sales and marketing and Stonemark’s banking relationships. Elizabeth is focused on sales growth and expansion into new markets.   Under Elizabeth’s leadership, Stonemark was acquired in 2018 by H.W. Kaufman Group, a global network of insurance companies.  Website: www.stonemarkinc.com  About the Middle Market Mergers & Acquisitions Podcast Get the insiders’ take on mergers and acquisitions. M&A investment bankers Gina Cocking and Jeff Guylay of Colonnade Advisors discuss the technical aspects of and tactics used in middle market deals. This podcast offers actionable advice and strategies for selling your company and is aimed at owners of middle market companies in the financial services and business services sectors. Middle market companies are generally valued between $20 million and $500 million. If you enjoyed this episode, subscribe to the podcast on iTunes, and please consider leaving us a short review. Learn more about Colonnade Advisors: https://coladv.com/ Follow us on LinkedIn: https://www.linkedin.com/company/colonnade-advisors-llc_2/

Harry Kraemer is the former chairman and chief executive officer of Baxter International, a multi-billion-dollar global healthcare company. He is a professor of management and strategy at Northwestern University’s Kellogg School of Management. He is also an executive partner with Madison Dearborn Partners, one of the largest private equity firms in the United States where he consults with portfolio CEOs. His third book is “Your 168: Finding Purpose and Satisfaction in a Values-based Life.”In this podcast Harry shared some war stories of tough decisions he had to make as a CEO. He shared his 40-year long practice of self-reflection and questions he asks himself every day. We also spoke about the importance of values in helping align stakeholders when tough decisions need to be made.

This week on The Real Word, Byron and Nicole discuss why Realogy is suing Madison Dearborn Partners and SIRVA Worldwide, 3 benefits for buyers amid the pandemic, and how John Krasinski is inspiring agents. Racket 1: Realogy's $400M deal with Madison Dearborn Partners and SIRVA Worldwide is falling apart, and Realogy is suing: bit.ly/400Mrealogydeal Racket 2: Amid the current health crisis, homebuyers may benefit: bit.ly/covidhelpingbuyers Marketeer: Tim Macy's SGN San Antonio took off organically on YouTube: bit.ly/SGNsanantonio Know someone who deserves to be a Marketeer? Let us know! Subscribe to our channel: bit.ly/realwordsubscribe Connect with Byron + Nicole on Instagram:
 instagram.com/byronlazine instagram.com/nicolewhiterealtor

Michael Hyatt is the co-founder of BlueCat Networks, which was sold to Madison Dearborn Partners, of Chicago, IL. He serves as a board member and director of BlueCat, and ranks as one of Canada’s top entrepreneurs.  Michael also sits on the Board of Advisors of Georgian Partners, one of Canada’s leading venture capital firms and was a recipient of the Top 40 Under 40 award. 

The second of two panel discussions held on March 21, 2019 at the University of Chicago as part of Lumen Christi's Ninth Conference on Economics and Catholic Social Thought. Panelists include Bishop Oscar Cantú (Diocese of San Jose, CA), Galina Hale (Federal Reserve Bank of San Francisco), and James N. Perry, Jr. (Madison Dearborn Partners). Moderated by Joseph Kaboski (University of Notre Dame). To view the video of the panel, which includes Q and A) and see photos visit http://lumenchristi.org/event/2019/03/financial-markets-moral-inquiry

In today's unsteady world, high values are hardly overly evident. As a term, "values-based" maybe be misunderstood or abused. To aspire to and achieve values-based entrepreneurship, it begins with you. Join ENCLAVE and Harry Kraemer, an executive partner with Madison Dearborn Partners and former Chairman and CEO of Baxter International Inc, as we discuss values in today's society.  ENCLAVE For Entrepreneurs  Harry Kraemer

In today's episode of the Inspire Podcast, Bart Egnal speaks with Michael Hyatt, one of Canada's top entrepreneurs who is known as a technology visionary. They talk about pitching ideas to investors, and what it takes to pitch in a successful, compelling way. Michael is an investor on the podcast "The Pitch" and was a “Dragon” on CBC's online Dragons' Den. He co-founded BlueCat, which sold to Madison Dearborn Partners, and Dyadem, a highly successful software company acquired by IHS. Michael is an active investor and philanthropist who chairs the Hyatt Family Foundation. Here are some moments from their conversation: Put on an investor's hat. (4:43) Discuss investor return of capital. (6:48) An overview of a great pitch. (8:51) Future cash flow potential - Facebook example. (10:01) Defend your starting gross margin. (11:29) Raising money is not success; minimum return of 3x. (14:55) Agreeing to take investments means agreeing to sell. (16:50) Rule of 50. (20:06) Avoid comparing your company's worth - cat show example. (22:30) Culture and integrity are key. (26:12) Top 3 pieces of advice to 'pitchers.' (34:01) Listen now to hear more! Learn more about Michael Hyatt: https://www.speakers.ca/speakers/michael-hyatt/ -- Listen on Apple Podcasts, Stitcher, Soundcloud and Google Podcasts.

Michael Hyatt is the co-founder of BlueCat, which was sold to Madison Dearborn Partners, of Chicago, IL. He serves as a director of BlueCat, ranks as one of Canada’s top entrepreneurs, and is a known as a technology visionary. Michael is also a weekly business commentator on CBC and was a celebrated “Dragon” on CBC’s online Dragons’ Den. He is an investor on the hit podcast “The Pitch” and a Founding Partner and Fellow at the Rotman School of Management’s prestigious Creative Destruction Lab. Michael sits on the CEO Board of Advisors of Georgian Partners, one of Canada’s leading venture capital firms and was recently named an Entrepreneur in Residence (EIR) at Blakes, one of the most successful law firms in the country. Michael also co-founded Dyadem, a highly successful software company which was acquired by IHS (NYSE: IHS). He was a finalist for Ernst & Young’s Entrepreneur of the Year Award, and was a recipient of the Top 40 Under 40 Award. Michael is an active investor and philanthropist who chairs the Hyatt Family Foundation. Michael works with speakers.ca (http://www.speakers.ca/speakers/micha...) and the NSB - National Speakers Bureau (http://nsb.com/speakers/michael-hyatt/) --- Support this podcast: https://anchor.fm/georges-khalife/support

Michael Hyatt is the co-founder of BlueCat Networks, which was sold to Madison Dearborn Partners, of Chicago, IL.   He serves as a board member and director of BlueCat, and ranks as one of Canada’s top entrepreneurs.  Michael also sits on the Board of Advisors of Georgian Partners, one of Canada’s leading venture capital firms and was a recipient of the Top 40 Under 40 award.   In this episode, Michael and I discuss various experiences at Bluecat,  the birth and sale cycle of companies and capital, entrepreneurship with a sibling, Michael's perspective on money, finding one's purpose, and more.  Enjoy! 

Harry Kraemer is the former Chairman and CEO of Baxter International Inc. -- a multi-billion-dollar global healthcare company -- and author of two books on values-based leadership: From Values to Action: The Four Principles of Values-Based Leadership and Becoming The Best: Build a World-Class Organization Through Values-Based Leadership. Harry is a clinical professor of management and strategy at Northwestern University’s Kellogg School of Management. He is an executive partner with Madison Dearborn Partners, one of the largest private equity firms in the United States, where he consults with CEOs and other senior executives of companies in MDP’s extensive portfolio. Stew and Harry discuss the importance of knowing yourself and your values in order to motivate, inspire, and lead others. They discuss strategies for how to develop effective values-based leadership through self-reflection, listening, and being open to others’ perspectives. Leaders must challenge themselves to take an honest look at their personal values and determine how to incorporate those into their daily activities. By developing this self-awareness, leaders can instill a more meaningful sense of purpose in their work and in the rest of their lives. The second half includes some interesting questions from callers so be sure to listen for Harry’s responses. See acast.com/privacy for privacy and opt-out information.

My guest this week is Brent Grinna, the Founder & CEO of EverTrue. EverTrue is a social donor management software platform that helps hundreds of higher education, independent school, and other non-profit fundraising organizations track and engage alumni and donors. EverTrue participated in TechStars and was selected as a winner of MassChallenge in 2011. Bain Capital Ventures is their lead investor today, and their partner institutions include household names like Amherst, Williams, Colgate, Brown, Boston University, Phillips Andover, and Phillips Exeter. The business was born after Brent - who’d been fast tracking as a venture capital and private equity investor - was asked to serve as an Alumni Volunteer for his undergraduate alma mater, Brown University. He found a system in desperate need of upgrade to 21st century technology and tactics, and set out to bring them to the education fundraising process he cared deeply about. The reason he cared so deeply was that access to higher education had changed the lives of both he and his brothers, who’d grown up on rural farmland in a far flung corner of Iowa. Football and smarts were Brent’s ticket to Brown, where he not only excelled academically but ended up Captain of the Varsity Football Team. After graduating he spent four years in finance at William Blair & Company and Madison Dearborn Partners, then earned his MBA with honors from Harvard Business School. In this week’s second segment Brent and I talked about the people stuff that almost always ends up being the primary focus of the CEO, at any stage of the business. I think other CEOs and those who aspire to be one will relate to both the insights and the struggles we both shared in this aspect of the job, if not to uncover all the answers then at least to commiserate on some of the harder questions. I consider Brent both a true friend and one of the most promising entrepreneurs in Boston, I think you’ll enjoy listening in on our conversation... especially if you don’t mind a couple Pats fans / ex-jocks taking apart the parallels of football and business. How Hard Can It Be is sponsored by G20 Ventures, early traction capital for East Coast enterprise tech startups, backed by the power and expertise of 20 ​of the Northeast's most accomplished ​entrepreneurs. G20 Ventures.​..​​ ​People first. How Hard Can It Be is ​also ​sponsored by Actifio​. Actifio​ virtualizes​​ data ​the way a hypervisor virtualizes compute, ​to ​help customers enable the​ ​hybrid cloud, build higher quality applications faster, and improve business resiliency and availability.​ ​Actifio​... ​Radically Simple.​

What do investing and networking have in common? Tune in to find out from Gina Cocking, a boutique investment bank owner. Gina Cocking is a Managing Director and Partner at Colonnade Advisors LLC, a boutique investment bank specializing in sell-side mergers, acquisitions, and capital raising in the financial and business services sectors. Colonnade’s clients are large corporate entities typically selling a non-strategic business, private equity firms and founder/family owned companies. After college at the University of Chicago, Gina joined the investment banking industry at Kidder, Peabody and later JP Morgan where she advised companies on M&A, debt, and equity offerings. She has been with Colonnade for over six years. Gina also spent a year with the private equity firm, Madison Dearborn Partners. Gina has operating experience as the CFO of a specialty finance company, Director of HR of a private equity-backed manufacturer, and as the CFO of consumer banking businesses within Discover Financial Services. Gina received her MBA from the Booth Graduate School of Business at the University of Chicago.

Mattias launched Atomico in 2006 alongside Niklas Zennström. In that time, Mattias has been involved with exits including Supercell (sold a majority stake to SoftBank), 6Wunderkinder (acquired by Microsoft in 2015), The Climate Corporation (acquired by Monsanto for $1.1B in 2013), Xobni (acquired by Yahoo! in 2013). Mattias works closely with a number of portfolio companies on their expansion, including Truecaller, Klarna, Hailo, and ChemistDirect.  Carolina is Vice President @ Atomico, working on sourcing, evaluation and due diligence of investments. Carolina is based in London, however she travels frequently to Latin America to evaluate opportunities for Atomico to help companies in the region to scale. Prior to Atomico, Carolina started her career at Merrill Lynch's investment banking division before moving to private equity firm Madison Dearborn Partners. Did you like the double guest show today? If so click here! If you prefer a single guest click here!  In Today's Episode You Will Learn: 1.) How Mattias and Carolina made their way into the VC industry with Atomico? 2.) How important is it for VCs to have entrepreneurial backgrounds? 3.) What advice would Mattias and Carolina give to anyone looking to enter the VC industry? 4.) What is Atomico's selection criteria? Average cheque size? Round preference? Sector preference? 5.) Why is now the best time to be a European entrepreneur? What has changed? 6.) What does it take for a tech ecosystem to thrive and grow? 7.) What is required for startups to scale from small markets to mass market adoption? Items Mentioned In Today's Show: Mattias' Fave Book: The Girl Who Saved The King of Sweden by Jonas Jonasson Carolina's Fave Book: Midnight in the Garden of Good and Evil by John Berendt Mattias' Fave Blog or Newsletter: Benedict Evans Carolina's Fave Newsletter: The Skim, Dan Primack: TermSheet Atomics's Most Used Productivity Tools: Wunderlist, Evernote, Pocket, SmartNews Atomics's Most Recent Investments: TrueCaller, GymPass As always you can follow Harry, The Twenty Minute VC, Carolina and Mattias on Twitter here! For a more colourful image of Harry and maybe some mojito sessions, follow Harry on Instagram here!