{"id":54238,"date":"2023-03-09T08:56:36","date_gmt":"2023-03-09T16:56:36","guid":{"rendered":"http:\/\/www.enxmag.com\/twii\/?p=54238"},"modified":"2023-03-09T08:56:40","modified_gmt":"2023-03-09T16:56:40","slug":"fitting-the-profile-top-ma-players-share-the-traits-of-an-ideal-acquisition","status":"publish","type":"post","link":"http:\/\/www.enxmag.com\/twii\/the-week-in-imaging-twii\/editors-blog\/2023\/03\/fitting-the-profile-top-ma-players-share-the-traits-of-an-ideal-acquisition\/","title":{"rendered":"Fitting the Profile: Top M&A Players Share the Traits of an Ideal Acquisition"},"content":{"rendered":"\n
\"\"<\/figure><\/div>\n\n\n\n

In the world of mergers and acquisitions (M&A), the traits that make up an ideal acquisition can vary greatly from one perspective to the next. The variables are plentiful: sales volume, geography, OEM lines carried, product\/service offerings, customer base, staff tenure, reputation in the marketplace\u2014the list is endless. The ability for a prospective acquisition to mesh nicely based on those variables makes it attractive to some, but not a good fit for others.<\/p>\n\n\n\n

As part of this month\u2019s State of the Industry focus on M&A, we asked our panel\u2014which includes several of the industry\u2019s biggest players in the transaction theater\u2014to offer some insight as to the traits they seek\u2014beyond merely the financial parameters\u2014when sitting across the table from a seller.<\/p>\n\n\n\n

\"\"
AJ Baggott, RJ Young<\/figcaption><\/figure><\/div>\n\n\n\n

When a dealer establishes a track record for acquisitions, it is able to delve deeper into the factors that can ultimately pave the way for smoother integrations and long-term success. For RJ Young, the appreciation for organizational culture and value alignment takes on more significance, notes AJ Baggott, president of RJ Young in Nashville, Tennessee.<\/p>\n\n\n\n

According to Baggott, these factors can supersede the numbers. \u201cWe have walked away from many of the companies that meet the financial metrics we were looking for, but lack the organizational culture and values that align with what we have at RJ Young,\u201d Baggott said.<\/p>\n\n\n\n

\"\"
Jim Sheffield, UBEO Business Services<\/figcaption><\/figure><\/div>\n\n\n\n

While acquiring larger dealers in the $25 million and higher range can make for a highly profitable venture, dealers such as UBEO Business Services of Austin, Texas, are looking for candidates whose customer rosters can greatly benefit from the full and diverse menu of solutions it can offer. While CEO Jim Sheffield loves the huge deals that can really \u201cmove the needle,\u201d finding a client list that can be fully capitalized upon is tantalizing.<\/p>\n\n\n\n

\u201cFor the smaller ones, we can bring our power to the table,\u201d Sheffield said. \u201cWe probably have the premier product line in the industry, with the big four [OEM] players. So we can bring a lot of things that, almost from day one, their reps can be trained on that will allow the [acquired company] to grow pretty aggressively.\u201d<\/p>\n\n\n\n

\"\"
Dan Ruhl, Oval Partners<\/figcaption><\/figure><\/div>\n\n\n\n

Flex Technology Group (FTG) of Mesa, Arizona, has garnered a reputation for seeking out only the larger, highest-performing dealerships across the nation, but that distinction comes with somewhat of an asterisk. According to Dan Ruhl, partner with Oval Partners (the private-equity arm behind FTG), both hub\/platform acquisitions\u2014firms that record $15 million or more\u2014and sale\/tuck-in deals open the door to a wide variety of deals.<\/p>\n\n\n\n

\u201cWe\u2019re looking for market leaders where the business owners clearly want to stay on as part of the transaction\u2014that\u2019s our primary focus and represents a majority of the deals that we complete,\u201d Ruhl said. \u201cBut we also entertain deals for $5 million and above, where the owner is looking for more of a sales transaction. They\u2019re then folded into one of the businesses we already have in that geography.\u201d<\/p>\n\n\n\n

\"\"
Patrick Flesch, GFC<\/figcaption><\/figure><\/div>\n\n\n\n

Aside from a seller meeting Gordon Flesch Company\u2019s financial metrics for a possible deal, the manufacturer and geographical alignment are critical factors, notes Patrick Flesch, president and CEO of the Madison, Wisconsin-based dealer. The need to align via corporate culture cannot be overstated.<\/p>\n\n\n\n

\u201cWe need to make sure that both parties have a similar approach to how we structure our business,\u201d Flesch said. \u201cIs there a strong internal culture with talented employees and happy customers?  If so, that\u2019s a huge plus.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

In the world of mergers and acquisitions (M&A), the traits that make up an ideal acquisition can vary greatly from one perspective to the next. The variables are plentiful: sales volume, geography, OEM lines carried, product\/service offerings, customer base, staff tenure, reputation in the marketplace\u2014the list is endless. The ability for a prospective acquisition to mesh nicely based on those variables makes it attractive to some, but not a good fit for others. As part of this month\u2019s State of the Industry focus on M&A, we asked our panel\u2014which includes several of the industry\u2019s biggest players in the transaction theater\u2014to offer some insight as to the traits they seek\u2014beyond merely the financial parameters\u2014when sitting across the table from a seller. When a dealer establishes a track record for acquisitions, it is able to delve deeper into the factors that can ultimately pave the way for smoother integrations and long-term success. For RJ Young, the appreciation for organizational culture and value alignment takes on more significance, notes AJ Baggott, president of RJ Young in Nashville, Tennessee. According to Baggott, these factors can supersede the numbers. \u201cWe have walked away from many of the companies that meet the financial metrics we were looking for, but lack the organizational culture and values that align with what we have at RJ Young,\u201d Baggott said. While acquiring larger dealers in the $25 million and higher range can make for a highly profitable venture, dealers such as UBEO Business Services of Austin, Texas, are looking for candidates whose customer rosters can greatly benefit from the full and diverse menu of solutions it can offer. While CEO Jim Sheffield loves the huge deals that can really \u201cmove the needle,\u201d finding a client list that can be fully capitalized upon is tantalizing. \u201cFor the smaller ones, we can bring our power to the table,\u201d Sheffield said. \u201cWe probably have the premier product line in the industry, with the big four [OEM] players. So we can bring a lot of things that, almost from day one, their reps can be trained on that will allow the [acquired company] to grow pretty aggressively.\u201d Flex Technology Group (FTG) of Mesa, Arizona, has garnered a reputation for seeking out only the larger, highest-performing dealerships across the nation, but that distinction comes with somewhat of an asterisk. According to Dan Ruhl, partner with Oval Partners (the private-equity arm behind FTG), both hub\/platform acquisitions\u2014firms that record $15 million or more\u2014and sale\/tuck-in deals open the door to a wide variety of deals. \u201cWe\u2019re looking for market leaders where the business owners clearly want to stay on as part of the transaction\u2014that\u2019s our primary focus and represents a majority of the deals that we complete,\u201d Ruhl said. \u201cBut we also entertain deals for $5 million and above, where the owner is looking for more of a sales transaction. They\u2019re then folded into one of the businesses we already have in that geography.\u201d Aside from a seller meeting Gordon Flesch Company\u2019s financial metrics for a possible deal, the manufacturer and geographical alignment are critical factors, notes Patrick Flesch, president and CEO of the Madison, Wisconsin-based dealer. The need to align via corporate culture cannot be overstated. \u201cWe need to make sure that both parties have a similar approach to how we structure our business,\u201d Flesch said. \u201cIs there a strong internal culture with talented employees and happy customers?  If so, that\u2019s a huge plus.\u201d<\/p>\n","protected":false},"author":166,"featured_media":54239,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[80,1650,82,3187,1638],"tags":[3487,2023,501],"_links":{"self":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/54238"}],"collection":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=54238"}],"version-history":[{"count":1,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/54238\/revisions"}],"predecessor-version":[{"id":54241,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/54238\/revisions\/54241"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/54239"}],"wp:attachment":[{"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=54238"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=54238"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=54238"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}