The merger and acquisition process can seem daunting to someone who has no experience and isn’t working with a broker. Over the years we have heard a number of horror stories and have compiled the following list of the top 10 mistakes in mergers and acquisitions:Read more
The Charlotte Business Journal has released their Fast 50 list for 2015. This list honors the 50 fastest growing private companies in the Charlotte region. LBA Haynes Strand is honored to have made the list for the second year in a row and continues to make firm growth a priority.
We are excited to once again join this exceptional list of Charlotte companies. Our approach to being a growth-oriented CPA Firm has led us to opportunities to grow through mergers and acquisitions as well as organically. In 2004, the LBA Haynes Strand’s Matthews office was started by John Bly and his wife Darci. The firm was known as Bly & Bly at the time. Over the next eleven years, the firm grew through a series of eleven mergers and acquisitions, including our most recent merger in 2014. These mergers have allowed the firm to grow from $0 to $8 million in revenue in a relatively short period of time and has provided the opportunity to grow our footprint in Charlotte and across North Carolina. With offices now in Matthews, Mount Airy, and Greensboro – we have become a regional CPA Firm.
Our geographical footprint isn’t the only thing that has been changed as a result of our growth strategy. We have also seen growth in our suite of service offerings that we are able to offer to clients. In the Triad we now have a large employee benefit plan audit practice, in Matthews we have a Capital Advisory arm of the firm, and overall we have grown our Sarbanes Oxley, Construction, Manufacturing, and Non-Profit Niches with the experience of key employees and the leadership of our Partner Group.
Thank you to the Charlotte Business Journal for including LBA Haynes Strand on this list and congratulations to the other 49 companies that have been honored as well.
To learn more about LBA Haynes Strand, set up a time to meet with one of our team members in Matthews, Greensboro, or Mount Airy!
As you look to purchase a business make sure you are doing it for the right reasons. Don’t just say, “I want to get rich.” That line of thinking probably won’t cut it, unfortunately. You need to make sure you have wisdom, passion, and a sound plan for your new business. Do your Due Diligence!! The timing is right to purchase, in fact 2015 through 2017 may be one of the very best times EVER to buy a business. There are a number of factors that make this the best time in history to buy:
- Supply and Demand
- Capital Availability
- Larger Companies Are Worth More
- Strategic Savings
1. Supply & Demand
As Baby Boomers are exiting their companies – there are lots of sellers, but there are not as many buyers as there were 10 years ago. This makes the selection of businesses to buy better than the past. Also technology has helped in this regard. Most Capital Advisors that provide buy side searches or sell side representation have access to websites that list companies that are up for sale. This makes it much easier to find the demographic fit, niche fit, and value that the buyers are looking for. Therefore, when a business owner comes to a Capital Advisor they are receiving information on numerous companies that are interested in selling, and have more choices than they would have had at any time in the past.
2. Capital Availability
The Private Equity Groups, Private Investors, and Banks have more money on the sidelines that they want to put to use in the marketplace than ever before. Additionally, interest rates are still at historic lows (however this could change slightly in 2016 – so keep an eye on this) – so borrowing capital to buy a business can be done very efficiently.
3. Larger Companies Are Worth More
Acquiring 1 to 3 competitors and building your current company may change the multiple you get on an exit from 4x to 6x of EBITDA. The big difference here is that you may be buying a smaller business for 3x the earnings and later as you combine it with your business and thus resell a larger business in the future, you may be able to get a rate arbitrage on your purchase. Thus, the same business you bought for more than 3x.
4. Strategic Savings
If you already own a company in the given industry and you acquire another one, the savings could be 5 to 25% on expenses for the combined company. Which means you could add more profit and cash flow than the prior owner. There are many different expense categories that would overlap, and when you combine companies you wouldn’t have to pay twice!
For more information on how LBA Haynes Strand Capital Advisors can help you successfully buy a business, click here for your no cost consultation! In the meantime, click the button below to download your free report: “The Essential Guide To Successful Mergers and Acquisitions.”
John Bly recently sat down with ExitCoachRadio.com for an interview with host Bill Black. During the interview John discusses three important aspects of the M&A marketplace:
- What does the current M&A environment look like?
- Where is the funding for deals coming from today?
- Why would a small business want to acquire other companies?
We work with many attorneys and law firms throughout Greensboro and the state of North Carolina. Through referrals and working on joint projects, we have found 5 law firms that are especially great to work with.
The 5 best business law firms in Greensboro (in no particular order):
Carruthers & Roth
Carruthers & Roth was founded in 1937 and is located in the heart of Greensboro. They are a mid sized law firm offering big-firm capabilities delivered with the personal attention and responsiveness expected from a small town practice. Their clients include large multinational corporations, closely-held businesses, individuals, and entrepreneurs. To see a full list of their practice areas, click here!
Phone: 336-379-8651 | Website: www.crlaw.com
Brooks, Pierce, McLendon, Humphrey & Leonard, LLP is a business law firm providing comprehensive strategic counsel and innovative solutions. Their clients include: businesses, individuals, government, and non-profit institutions. The firm’s expertise extends to every aspect of business law (antitrust, mergers and acquisitions, start-up and publicly traded companies, trusts & estates, and many more).
Phone: 336-373-8850 | Website: www.brookspierce.com
Womble Carlyle is one of the largest and most technologically advanced business law firms in the Southeast. They have been serving the Greensboro region since 2001 after realizing Greensboro to be a key business center in North Carolina. The office includes 15 lawyers whose practices include: specialty areas of capital markets, corporate and securities, health care, intellectual property, and business litigation. The office is also home to several lawyers of the Firm’s Supply Chain Management practice group which provides supply chain solutions to businesses. While the firm was originally established in 1876 in Winston-Salem, it now comprises more than 550 lawyers in fourteen offices across the state of North Carolina.
Phone: 336-574-8030 | Website: www.wcsr.com
Tuggle Duggins P.A.
Since 1974, Tuggle Duggins P.A. has been serving businesses and business owners with interests in the Carolinas. Tuggle Duggins is a multi-specialty, multi-disciplinary law firm focused on the needs of closely held businesses and business owners. They provide representation in legal matters ranging from conventional, personal, and business issues to complex legal matters. Their goal is to provide long-term client relationships and delivering exceptional services and results to their clients.
Phone: 336-378-1431 | Website: www.tuggleduggins.com
Hagan, Davis, Mangum, Barrett & Langley, PLLC is a well established and trusted group of attorneys in Greensboro, NC. Dedicated to helping their clients achieve their business objectives effectively and efficiently. Hagan Davis has a proven track record for success, particularly in complex legal matters. There is no typical client of the firm, however most of their clients are influential in business, philanthropy, education, and sports. They deliver results to entrepreneurs and high-income individuals alike.
Phone: 336-232-0650 | Website: www.hagandavis.com
If you need a business law firm in Greensboro, NC, these five law firms are the best place to begin your journey. Each firm comes highly recommended by the Principal Members at LBA Haynes Strand. If you would like a specific attorney’s information, please contact us.
Are you considering acquisition as a way to begin or expand your business? There are a number of reasons why it is one of the best times to acquire a company:
1. Supply and Demand
As The Baby Boomers are exiting their companies – there are lots of sellers, but there are not as many buyers as there were 10 years ago – so the selection of businesses is better than in the past.
2. Capital Availability
The Private Equity Groups, Private Investors, and Banks have more money on the sidelines that they want to put to use in the market place than ever before. In addition, interest rates are still at historic lows – so borrowing capital for an acquisition can be done very efficiently.
3. Larger Companies Are Worth More
Acquiring 1 to 3 competitors and building your current company may change the multiple you get on an exit from 4x to 6x of EBITDA. The big difference here is that you may be buying a smaller company for 3x the earnings and later as you combine it with your business and thus resell a larger business in the future, you may be able to get a rate arbitrage on your purchase. Thus, the same business you bought for more than 3x.
4. Strategic Savings
If you already own a company in the given industry and you acquire another one – the savings could be 5-25% on expenses for the combined company. This means you could add more profit and cash flow than the prior owner. There are many different expense categories that would overlap, and when you combine companies you would not have to pay it twice.
M&A Tip: As you look to acquire or buy a business make sure you are doing it for the right reasons. Don’t just say, “I want to get rich.” That line of thinking probably won’t cut it, unfortunately. You need to make sure you have wisdom, passion, and a sound plan for this business. Do your Due Diligence! The timing is right to acquire, it’s just up to you to follow through!
For more information on how LBA Haynes Strand can make your acquisition a successful one, contact our Capital Advisors team!
In recent years, mergers and acquisitions have seen a rise in popularity as a way to grow a business. Why is this? Much of this can be attributed to the aging of the Baby Boomer generation. Baby Boomer business owners are looking to retire or to cash in on the businesses that they have built. They are looking for opportunities to sell and the marketplace is very aware of this. As Generation X and Y continue to develop and build on their entrepreneurial backgrounds, there are many opportunities to buy businesses and grow businesses exponentially through M&A.
Mergers and acquisitions are not prevalent in every industry. However, there are some industries that are considered very active. These are the industries focused on growth through M&A:
- IT/Technology Companies
- Construction Companies
- Property Management Companies
- CPA Firms
Technology companies want to gain access to intellectual property and talent, enhance new product lines (through acquisitions), acquire innovative product lines/technologies, and finally technology companies want to enter new markets. In addition, technology companies realize that these achieving these objectives through in-house operations would be very expensive and time-consuming. M&A gives these companies instant solutions and results.
Trends Driving M&A In The Technology Industry:
- Cloud Computing
- Mobile Technology
- Data Analytics
Construction companies want to gain access to an expanded geographical footprint with new markets, a larger workforce, increased financial flexibility, and additional service offerings. Acquisitions have been increasingly popular among construction companies as larger companies are looking to add a specialty service offering. For example, lets say you hire a contractor to come in and install new siding on your house. They do a great job and you are pleased with your decision to use their services. If you find out they just added custom garage door installation to their list of services, you will probably use them again. The increase in service offerings through mergers and acquisitions gives construction companies the ability to sell multiple times to the same client which increases revenue.
Trends Driving M&A In The Construction Industry:
- Favorable capital market conditions
- The shale revolution
- Labor shortages
- Aging and retiring population of owners
Property Management Companies
Property Management Companies are using M&A in order to gain: size, proximity to new locations, economies of scale, and additional management offerings. In some cases, especially the Charlotte area, management companies are looking to grow across state lines. Rather than a Charlotte management company opening a new location in South Carolina, they will often times acquire an established management company in South Carolina. This can be seen in the state of North Carolina, when management companies based in Charlotte use this tactic to gain access into new cities, such as Raleigh, Greensboro, etc.
Trends Driving M&A In The Property Management Industry:
- Real Estate brokers wanting out
- Lack of succession planning
- Competition: National players coming to Charlotte
Growth through M&A has steadily increased for CPA firms. Firms want to gain access to talent, new marketplaces, and new service offerings. A CPA Firm may lack the time and the talent to grow a certain niche or service offering that they see an opportunity in. The best way to achieve instant entry into the marketplace is often times through a merger or an acquisition of a smaller firm that specializes in that service/nice and has the talent in place to achieve results. These can lead to an INSTANT increase in revenue and a larger footprint.
Trends Driving M&A In The CPA Industry:
- Aging and retiring population of owners
- New service offerings
- Lack or decrease of talent
- Increase in competition
Growth through M&A is our specialty. If you are in one of these four industries and are interested in exploring how M&A can grow your business, contact us for a no-cost consultation.