Behind the Scenes of Selling a Business to a Corporate Buyer

Welcome to M&A Talk, the number one podcast and all things related to mergers and acquisitions. Brought to you by Morgan and Westfield, a nationwide leader in mergers and acquisitions for small to mid-market companies. We bring you exclusive interviews with industry experts in business sales, valuation, private equity, investment banking, and more. It's our mission to provide you with insight and guidance on how to build your company's bottom line and maximize value for eventual sale. Here's your host, Jacob. All right, so welcome to M&A Talk. My name is Jacob, President of Morgan and Westfield in your host. And today we have Joanne Helmer from Philadelphia joining us. And Joanne has over a decade of experience in the capital markets and M&A, including roles at Vanguard, Goldman Sachs, and City Group. He's currently the head of corporate development at affiliated distributors and managing director at Viento Capital. He's got an MBA from University of Chicago and born and raised in Mexico City. And Joanne, good to have you on the show here. Thanks for having me. So we've got a lot to cover. Tell me, what is your role here at these two companies? At affiliated distributors and at Viento Capital? Sure. I've run our corporate development team here at affiliated distributors. We're a largest buying group in North America for industrial distributors. We provide a lot of services to these independent distributors across it. And so we corporate development, we do a lot of M&A corporate projects here. And for Viento Capital, manager director is now more than anything an investment vehicle for personal uses, but we have advice in the past, family offices on direct private equity investments that they like to do, and then they need help. And so we serve that kind of advisory and transaction services for the family offices. So this is useful for business owners because your two typical acquires are either a corporate term or a PE firm. So let's talk a little bit more about affiliated. By the way, can you tell us the ballpark size of affiliated and volume in terms of acquisitions? Sure. Yeah. Because we're a buying group, the numbers are a little bit interesting in the way that we explain them. So because of the fact that we are member owned, we have about 850 independent distributor members. They do on average or last year, they did about $42 billion in sales. Now for us, we measure our size more on the rebates that we provide or we assist our member sketch. And so that's close to around a billion dollars. So that's kind of we measure our size in terms of a corporate scale. We are about a billion dollars, a billion dollar company in terms of acquisitions. We do, we acquire mostly other buying groups. And these range in sizes to medium size to the smaller size and also range in terms of their operations. They could be very lean run operations or they can be a little bit more intricate. We've acquired a few buying groups that had warehousing, inventory, etc. And so they tend to be on the medium size in terms of operations. In the past few years, we've acquired about five buying groups. So we've been quite acquisitive in the past few years. For those that don't know, how does a buying group operate? It's an interesting model. Our model is unique in the sense that a traditional buying group is is a vehicle to help a bunch of independent companies, you know, if you look back at the way that some of the buying groups started, you can look at the GPL model within the pharmaceutical industry where a bunch of independent pharmacies got together and they say, we need purchasing power to compete against some national bigger operations. And then they got together, they pulled their orders, and then they went to the pharmaceutical companies and got better pricing. So these independent pharmacies gained leverage from the perspective. Now the buying group world that sustains now is usually still the same as pulling and aggregating purchases to create leverage to get it, create better pricing. Now there's additional services in the world of industrial products. Here is this interesting component called the rebate. We help our members not only aggregate their orders, we can help out with rebates. And so to get better rebates from the big manufacturers, call it 3M, Philips, and so on of that scale and smaller suppliers. So we say in the middle between an independent distributor of industrial products, they pay us, we have a unique model because they pay us. We hold the money a little bit longer. We extend the terms and then we pay the suppliers, therefore we're able to pay ourselves and not take money out of the rebate that they get. So we do also that, and we do e-commerce offerings, we do a full suite of things for the members in addition to networking and best practice sharing amongst them. Very interesting. Corporate development is, for some business owners, they may not know what that means exactly. Of course, M&A falls under the umbrella of corporate development, but what does corporate development mean to you and what is the goal of corporate development? And then after that, we'll kind of jump into the details here. Yeah, corporate development to me, it is this intersection of, we have business development, nothing, most business owners understand what business development is, right? Is how do you engineer yourselves for us to go gain additional territory, additional market share, additional accounts? Corporate development is part of that, but it's also part in terms of the corporate strategy from how you think about your growth. Is corporate development also encompasses what we would call inorganic growth, which is the M&A aspect of growth, go in and acquiring either a competitor, a new territory, a company with new types of products or new channels to get there so that comes as corporate development, but corporate development also includes corporate strategy a lot of the times and that's the ability to say, well, what else could we be doing to be chasing growth? And that's some strategic initiative could be joint ventures, could be a new product that you need to think about it analytically and strategically so that could a lot of the times pass through the corporate development office. So the corporate development, I see it as M&A and corporate strategy or corporate initiatives within the company that affect the growth overall. So in corporate development, do you become involved in organic growth? I think so, yeah, I mean, I think it depends on the organization. There are corporate development offices that purely, purely just look at M&A in our case because of the fact that we're, we run a pretty lean operation. Corporate development certainly looks at organic growth from the perspective of assisting whenever it's needed to say model out what a new channel could look like or start thinking about new greenfield strategies or initiatives. So from that perspective, corporate development can certainly help out organic, but again, we do have a dedicated sales force that are everyday strategizing how to go and, and negotiate better things or acquire new members. And so a lot of the times there's some mix between the two because they could be out in the field doing the work and then make come across an interesting M&A opportunity then they bring it back to corporate development, corporate development, things about it, you know, we kind of get together from our perspective. Brilliant point. Yes, your sales team can serve a dual function there and also serve the M&A department. That's a really, really good point. Once you've formed your strategy, what's the next step then in terms of corporate development making your acquisitions? Yeah, I mean, I think that is an essential part of corporate development, right? A well-structured corporate development, you know, function needs to start with, where are we and where do we want to go? What is that corporate roadmap that we want to start thinking about? Because a lot of the times corporate M&A, so if you're a business owner, you may be at a specific place at a conference, a trade show, or a local bar or a golf course and somebody may come up to you and say, "Here, look, there may be this deal popping up." That's a reactive kind of M&A and that happens a lot and it could be very beneficial and valuable. But absent of that, there should be this corporate roadmap that you're following based on a thesis, based on strategy where you're saying, "Where is our market going? Or do we need to be? What are our gaps? What are our strengths? What are our weaknesses? How do we either leverage our strengths, fill in our gaps, address our weaknesses or threats? We can do that through M&A and so you have to start with that strategic lens of that angle because anytime that you do a deal from a corporate perspective, you have to have a quote-unquote checklist, a strategic checklist of the things that are important, why you should do that deal? Because we all know that M&A can be played with emotion or, "Hey, those are my competitors and I must acquire them." Whenever you do M&A from that perspective, just for the sanctity of motion-driven desire, a lot of the times it doesn't end up well. So every time I talk about corporate development is this idea that you have to have a really nice process, playbook, call it, of why a M&A needs to happen, should happen, could happen, and that's the genesis of how you go and look at what you do for a minute. So in your industry, is it a mature industry? Because I know in certain mature industries, in acquisition strategies, basically acquire anything you can get your hands on. If it's a contract and you can pick up that contract, acquire it, it sounds like that's not the case with your industry and you're really looking for value added acquisitions. Where do you think you've fallen in terms of that perspective? I would say, it's interesting because it's somewhat of a conundrum. It is mature in many aspects. So we have different particles that we serve within industrial distribution. So we look at, we know we have anything from HVAC and plumbing and gypsum wallboard to electrical components to bearing power transmission. So we're diverse from that perspective and in certain areas, it is very mature. And we have, as we have said, acquired what we could have acquired. And now we have to focus on growing market share from a more organic perspective because from a M&A perspective, there's not a lot. And you're right. If there were to be something else, we would very much be aggressive and try to acquire what makes sense and kind of checks the boxes. There are other areas that are newer and there's innovation and there's things that we don't do that we would like to do. So in the electrical space, things that would be quite interesting is renewables and that's a newer area. So the electrical market in itself is quite mature but the innovation is there for what's next and what do our members want need and how do we start anticipating. So from that perspective, that is very exciting because there are other pockets of areas in the industries that we serve that are on the newer side. What's the biggest challenge for you being in M&A? To achieve that objective and acquire companies, what is your number one challenge? That's a good question. I would say is telling our story, right, because a lot of the times it's in our world. Look, I would say if you were to ask this question from most corporate development officers that would say was usually price, right, is that's the challenge, is how much we're going to pay for things and does it fit an ROI model that we have internally. And I would say, yeah, that's the primary for most. But I would say for us is to be able to tell a story because a lot of the times for the acquisitions, for the mergers that we do, it is the ability to change narrative of if we're trying to acquire a competitor is to tell our story of the fact that we're not the big bad wolf that sometimes we're because we're kind of the bigger the biggest player in the market. So obviously that comes with connotations of who we are and how we've gotten our growth. So tell our story being able to go to the shareholders, the equity and the stockholders of the company and say, look, this is who we are, if we are going to march with us, this is what changes for you and hopefully it's all for the better because 90% 99% of our acquisitions are creative. And I see a creative from a perspective that their shareholders of both sides end up better than they were before. And this is something that we measure. But always, that's not always the number one motivator for a seller or for somebody who you're trying to march with. So telling our story sometimes in a crowded room or in a competitive world, it can be tough. What does a creative mean for those that don't know? A creative, whenever you do mergers, it's a way to measure how better off as a shareholder you are in from the perspective that a creative tends to talk about earnings. It talks about if A plus B, if A has, you know, 10 cents per share in terms of earnings and B has five, well, if you buy those earnings, do you end up with 15 or do you end up with 17? And saying a creative, it's saying you're getting additional earnings for both sets of shareholders. And so we measure that from our perspective, we measure it from the programs that the members get. And we're talking about rebate programs is to make sure that both sets of distributors end up with better programs that they were before. Now, does this need to be a public company for it to be a creative? No. I mean, a delusional and accretion is a very interesting cause of because obviously gets used primarily in the concept of public companies because there's a more tangible and more visible way to calculate it. But no, it can be certainly done up on private company. You may be using different metrics to assess it. But private companies, you know, private deals can be measured on a creative with each basis. And would that only apply in a merger or would it apply in an acquisition? Yeah. I mean, I think that the interesting thing that we can say is that all mergers are in a way on acquisition. Somebody is paying somebody, right? And so I think, yeah, primarily mergers are the ones that you focus on the accretion and delusion. But no, in an acquisition, you can look at it from a perspective. But in a full acquisition, you apply to somebody's getting paid out and they kind of go away, right? So I buy your company and you go away so you don't care about the earnings anymore. In a merger, both sets of shareholders stay. And so that's what you measure accretion and delusion. It's a little more important because now you have sets of constituents that they certainly care about what happened in the transaction where in a traditional buy or an acquisition, you have a set of, you know, usually the sellers, they get paid out and they kind of write into the beautiful sunset. But is the biggest mistake that business owners make when you approach them and try to acquire them? You know, I say that from the perspective of being an investment banker, a private equity investor, and now in a corporate development function, it's always the biggest mistake this seller can make is focusing purely on price, on headline price. It is a similar situation that when you go to a car dealership and you try to get a car and you see the MSRP and you get focused, you're not realizing what else is involved in the deal. A deal has a lot of components, especially you us up a potential seller or business owner and somebody approaches you about a deal, call it a merger or just a, you know, a sell of your business is not understanding what else is in the details. So yes, everybody's hyper focused on what is the multiple that I'm going to get paid? It's five times, seven times, 12 times. That matters, obviously, because people need to get compensated for what they build. But at the same time is what else is in the details? What is, is there an earn out? What is the plan for the employees? What are they going to do with the brand name? Are they acquiring only assets? Are they acquiring the full equity and liability so the business? I get a lot, a laundry list of details that are part of a deal. A price just telling you I'm going to buy you for X gets kind of watered down and obviously could lead to, you know, bad results at the back end. If you can talk about it, it affiliated distributors. How do you like to structure your transactions? Do you buy 100% asset sale, earn outs, financing and so forth? What should business owners know, just from your perspective about how a typical transaction might be structured? From our perspective, you know, what we can share is that we primarily do asset deals. We like to have a say on what happens, you know, because of the fact that we're merging groups within to our divisions and so we want to make sure that we're respectful in many instances. We have kept names and brand names, trademarks. And yeah, we try to do it as a deal, just to make sure that we limit ourselves on potential liabilities and we have not identified it. We run a really nice due diligence process. We have great legal partners that help us in, you know, we spend a lot of time assessing what are the assets and liabilities. So that's usually how we structure our deals. We want to make sure we want to be very conscious of the desires and wishes of the boards. We desire some wishes of some of the management, you know, make sure that, you know, whenever it's appropriate, we extend job offers and the become employees of our company and when it doesn't, we know we just figure out something that's fair and appropriate for them. So that's how we do our deals. And, you know, we have a tremendous track record of creating goodwill across shareholders, boards, management teams, et cetera. By the way, being that these are buying groups, is that a dispersed group of shareholders on the other side? Yeah, it's unique. I mean, it's-- How do you structure that? Yeah, it's not to get into the weeds here. You know, buying groups, you know, you can have different flavors of buying groups, but the primary way that they structure it, these entities is co-ops and co-op law within the United States is tricky. Every time we approach a buying group about a potential merger, we spend an inordinate amount trying to get very close to understanding what is the legal structure and what's in nature. Because we want to make sure we follow everything to the T and not our eyes. When it comes to shareholder votes, making sure that we meet all the tests required for a potential merger and acquisition. So it is tricky because we end up with dealing with other legal councils that sometimes they're fairly knowledgeable, sometimes they're not, and so we need to do some education understanding that they know what co-op law is. But it is just a world. Okay, so let's talk about a common misconception if size matters here. I did a show yesterday, the company does 18 or 19 billion in revenue, and they were just working on an acquisition for $3 million. So how low will you go? How small? Because I know you do, I think you said, a billion in rebate revenue. On the low range, what's the smallest transaction that would make sense to you? Yeah, we don't have the heart of fast rules because ultimately, we depends on the type of group it is. It depends on the structure of the group, and so we would go to a tiny buying group operation if it makes sense. So again, we're talking about a nation industry or part of an industry that they're just getting started. They need scale. We can provide the scale, and it is somewhat of a hey, we're going to tuck you in, and we're going to quickly ramp up growth because we have the resources. You have to know how, and we can get you. You can help us get started in that sector of industry faster, and we can help you with our scale and resources. So we would go pretty low in the scale because again, it has to fit that corporate roadmap, that strategic roadmap, but where do we want to be and where do we want to go? How do we continue to add value of our members, and if that's something that fits within that profile, we would certainly do something that is on the smaller side. Let's talk about value drivers. I don't like that term because it's jargon-y to me, but what is usually driving you to acquire a company? Why, what's the motivation? Primarily growth, I think I would say, does a number one reason why corporations do you M&A? Well, specifically about let's say you like company A or company B or company C or D. What are some of the examples of specific attributes of those companies that you've liked enough that you laid down the cash to acquire those companies? Yeah, that's a good question, I would say. We have identified an overlap in our member base, so we may have members that are part of our group and their group, and that's a sector that we do not cover, but it's complimentary to something we currently do. Or alternatively, it's an area where we want to be, we have zero exposure, and we would need to get comfortable that this is where we want to go, you know, do an ideal in that space. It may require for us to get really smart, really quick in a lot of different factors. But those are the value drivers. Are we going to get into an area that we're already partially in? You know, we have to, you know, dip our toes in specific ponds, and we want to say this will get us there faster and we see complimentary value drivers for both organizations because again, they need to see it, they need to see the value as well as we see it. Or we're saying, this is an area that I think we must be in, and this is how we get there in, you know, this acquisition while it's not going to be easy, can get us there much faster. It accelerates things that we had already contemplated or things that we see it as, that's where the puck is going to be in three years. And so we need to kind of get in there now and kind of affect outcomes now that we can. How do you assess whether or not you want to do a deal? So let's say you identify company A and have a conversation with the owner or owners in this case or shareholders. How much of that assessment happens before the LLI and during due diligence and throughout the trend? It's an interesting concept because I will tell you that the, as a corporate development function, you get smarter. And also from an executive team perspective, you also get smarter, the more deals you do. And I say that from the perspective that earlier on, you, when you're at the early stages of your corporate M&A journey, you want to look at every deal and spend hours and saying, am I missing something? Am I missing something? And you're trying to retrofit a thesis into something that may not be there. But because of the fact that you're new to looking at deals, you may want to spend a lot of time. Now I would say fast forward till today, we have several deals that we looked at and we quickly say, no, this is not going to work because of the fact that we have lessons learned from previous deals. They have taught us a decent amount of things that we look at and say, this is not going to be a good culture of culture fit. It's not going to be a good operational fit or this is not going to yield the value accretion that we expect. We can tell that a lot quicker now than before. So I do think that the more advanced and more reps that you do, like in anything in life, will allow you to, when you're really good on the mound, you can pitch better or see the pitch better the more you do it, and that's similar to M&A. I've taken about 15 spills in my bike in the last year and keep telling my friends I'm getting very, very good at falling and not getting hurt. So I guess that's the only way you learn. So let's take a quick break off from everything that happens after that, including due diligence. So we'll be right back. Are you thinking about selling your business but aren't quite sure where to start or who to contact first, visit Morgan and Westfield.com. Experts in business sales for small to mid-market companies in all industries nationwide. Our goal is to help you sell your company at a value that's worthy of the time, dedication, and hard work you put in throughout the years. The first step is a free consultation. Visit MorganandWestfield.com now to schedule your free consultation. Welcome back to M&A Talk, Joanne. What is your advice to owners in the L.O.I. stage or what do you think some of the most common mistakes that business owners make in the L.O.I. stage? I think L.O.I. we need to kind of remind ourselves what the L.O.I. is, the letter of intent, right? L.O.I. or sometimes, you know, the concept of MOU, memo of understanding, is somewhat forgotten. The intent of a L.O.I. or an MOU, both similar documents, one, it's a little bit clearly expressed, is just effectively laying out the potential terms for a merger and acquisition. And again, as I mentioned earlier, a lot of the business owners to receive an L.O.I. get quickly fixated. It's like, you know, when you get your first offer letter for a job, you quickly get fixated quickly on the number. And in a lot of the times, you forget to look at the rest of the details. And when I talk about details, one of the biggest pitfalls for an L.O.I. is not understanding how A, they're arriving to the value. So what are the metrics that they're using to arrive? Are they looking at your last 12 months, are they looking at three year averages of your earnings? Are they looking at future next 12 months? What are those base of this mechanics? What is the multiple that they're using? Are they using words like adjusted EBITDA? What are you adjusting? What is EBITDA? Understanding those details is important because a lot of the times, I will say, you have been working in, you know, private equity settings in a very competitive world. If you're getting several L.O.I.s from different parties, be careful of always selecting the one with a higher price because it is a well-known practice for many, many parties to say, throw on aggressive L.O.I. number out there, omit a lot of the details. And as they say in the business, then they're going to walk it back. Meaning, they're going to start finding things through the due diligence process that they're going to call it adjustments to that price. And so, you know, it's just as a business owner, you always advise to them that L.O.I.s very important because you want to request that they add as much information as possible, such as, how do you come up with a value? What are the basis for that? What else is important for this, for this transaction in your eyes? What are the impediments for getting this deal done? What is the timing? What is the exclusivity mean? You know, all these particular terms that hopefully you have an advisor or you have, you know, that could be a lawyer or an investment banker or somebody who's well-versed in imminent world. Review that with you and understand if you're going to do comparisons between L.O.I.s, that you know that you can hopefully do apples to apples and not apples to oranges because sometimes gets lost in that person from that. What should the business owner know about the attorney's role in negotiating L.O.I. How involved is the attorney and how important is the expertise and experience of the attorney that they are? That's very important, you know, that I think that, you know, it's a good investment banker who used to say, don't let a good lawyer get in the way of a good deal and they used to say the same thing, don't let the investment banker get in the way of a good deal. The lawyers are very much necessary from the perspective of decoding some of the legal lease and the legal language included in deal documents. What does it mean that they're going to put something on escrow? What does it mean that there's reps and warranties? All these things that are, you need somebody, you're hiring a translate. That's a very, very good way of putting it. Right. You need somebody to explain things to you. I mean, maybe as a business owner, you're well-versed in all of this because you've done plenty of contracts in sales agreements, et cetera, but this is, you need a translator to come say that to you in very plain language. Hey, John, what they're saying here is in the next 12 months after they close, if X, Y, C doesn't happen, you're going to have to pay them back. Did you know that in the next after they close or before you close, if this happens, the money on escrow, blah, blah, blah, blah, blah, blah, that's why a lawyer is needed. Now, I always say and I will always pump the value from a perspective of an investment banker. You need the investor banker as an advisor because you need that combination of saying, yes, those are important things. But just so you know, that is normal practice, or, yeah, but I want you to know, they're paying really a lot of the times we used to say, as investment bankers, yeah, look, they're putting this in the legal language, but they're compensating you extra or that potential scenario, right? So if there's going to be an earn out, well, if I have to wait for my money as a seller, I want to be compensated a little bit higher because now I'm taking risk as a seller. Those are the things that an investment banker can help you walk through. Sometimes a good lawyer can do that too, but the combination, as long as it makes sense, it can be very beneficial and can help create a much better value for both buyer and seller. So you can have your family or criminal lawyer do your transaction, right? I would highly advise against it. I've been on deals where there have been real estate lawyer friends, you know, the best golf buddy that they have real estate lawyer getting involved in an merger. And you know, a lot of the times there are well-versed in mergers, but most of the time they're not. That's the reason why we all specialize in what we do. And it just becomes they have in certain scenarios been the reason why a buyer or a merger partner walks away. Just because the difficulty of dealing with a lawyer that is trying to do something that they are not well-versed in and making the deal very difficult. So, you know, it's important to know who to pick. And is that primarily due to somebody that lacks the experience not knowing what the customs are? And of course, customs exist for a reason because thousands of people before you have figured out that, okay, this is the most efficient way to do something. But why is that a problem when an inexperienced attorney becomes involved? Why can't they just look at it and figure it out? Yeah, I know. I think it's a variety of things, right? I mean, just think about what you, what we all specialize in. You know, I can always play, I say, I play a lawyer on TV because I can look at a contract and pick up things that I think come in, you know, I'm looking at leases or we're looking, you know, our CFO and I spend a lot of time looking at legal documents. We're well-versed in often legal language that we can identify certain things. But we know we're specialized or we're specialty in our knowledge stops. I mean, having a real-stater or litigator doing M&A, it's either going to play out their hand a lot more and become a very difficult process or miss certain things that they might have misinterpreted. That is going to be quite costly down the road. With the LOI, do you ever offer an I/OI for those that don't know an indication of interest? Or, and I know you mention an M/OU memorandum of understanding. Is it always an LOI or do you use an I/OI or an M/OU? I've used all of them. You know, it changes. An I/OI, I've done I/OIs because the process is quite competitive and they're in the process early, meaning process. I was helping a family office find a company that did X, Y, and C. And I came across a really interesting situation where there was this entrepreneur that was ready to move on to their next project. It was, I knew it was going to be competitive, so I started with an I/OI that was followed by an LOI and, you know, ultimately with definitive agreements. So the I/OIs, they've started with, look, these are the parameters that A will usually do deals within these parameters. This is how we look at transactions. We envision us retaining you for, you know, the first six months and the capacity of blah, blah, blah, blah. And then comes the LOI with a lot more meat, right? And that starts talking about valuation metrics, starts talking about reps and warranties, escros, indemnity, blah, blah, at a high level, right? Just introducing those concepts early on. Because the last thing you want to do is get to, you know, the wedding date and then having surprises. Nobody wants to be surprised when they get those definitive agreements. So I have done I/OIs. I/OIs are high level, high, high level, but just saying these are the balling lanes, right? This is where I'm going to stay with them. Unless something wild happens, or I uncover something that, you know, could change things materially, these are the guidelines that I would follow and then you follow with the letter intent, or you may go directly from I/OI attention to the definitive agreements. If it's an ultra competitive process, or you have it. Why would you choose to go into an I/OI as opposed to an L/OI? From my perspective, an I/OI is a one-a-throw-my-hat in the ring much faster before I know what I'm even willing to tell you what my metrics for valuation are, or, you know, what are going to be potential earn out mechanics, et cetera. I just want to tell you, I'm highly interested. And then I/OI is also a very good time to say, hey, you are a business in the landscaping, you know, professional services. Guess what? I have acquired three other companies in that sector. I know the sector quite well, and I'm able to immediately professionalize your services in your back office in, you know, in months. So that's also the time to say, I'm highly interested. And I am the right party because of X, Y, and C, which a lot of the times, you know, you in a hyper competitive process, you may not even have time to do that. What happens after the I/OI? Does the owner sign it? Or do you then have a couple more meetings, more documents, and then issue the L/OI? What typically happens after the I/OI? Everybody has had different experiences. My experience is that an I/OI is not, it's none of these documents except the definitive agreements are binding. So it's all, there are components in an L/OI or an MOU that make grant exclusivity. And we can talk about that because that talks on due diligence. But I/OIs are just effectively a formalized letter saying, I'm highly interested. This is why I think you should talk to me. And if you're okay, let's sign an L/OI and move on to a more formalized manner. But now, from my perspective, I/OI usually leads to an L/OI or an MOU, although there's times that again, it just goes directly to due diligence and a quick close. What about an MOU? MOU from our perspective is usually more on the merger side saying, look, this is a memo understanding. If we're going to merge operations, we're going to keep your office and Phoenix, but we're not going to keep your office and Dallas, right? We're going to, we're thinking that we're going to merge our IT departments, but what our sales office is just going to be our sales office in you're not going to keep yours. I mean, it's just, it is a memo of understanding is saying, and again, you can do a memo of understanding in a pure acquisition. But I usually see it with both parties are adding to that document and saying, we are both agreeing. It is our understanding. This are the high-level terms of the transaction. But, you know, again, they're different flavors, but that's usually what I've seen. Some business owners, I think, at that point, loosen up and they think either on the 10-yard line and they've got 10 yards left to go, where are you at so far on the transaction and how much work is left to do once the L/OI sign? It does a fantastic question and it is quite, quite important. I mean, going back to your question about what are the misconceptions of an L/OI? An L/OI could be, you can be on yard 10 or L/OI could be in a red zone almost because it's a lot of the times an L/OI sign with the intent to then go into full diligence, due diligence. And that may turn into, let me do a quality of earnings. And we can talk about quality of earnings. We can talk about legal diligence, but they could be just a starting point to saying, let's open the kimono and let's see what's in here in a lot of the times. Certain parties do an L/OI a little early and then you're just getting started. Now, that doesn't mean that there's no certainty that you will close, but it's still not a hundred percent when there are times when an L/OI is just saying, look, I'm signing you this L/OI because I need to get access to your members, your top five customers list. I want to see that. I want to see X1C. I want to see these five things that are really going to confirm my thinking and my thesis of why this is a good deal. And once I check those off, we're done. And so, you know, again, every time you get an L/OI, you should, it is important to know, okay, if I sign this L/OI, what is next? What is left for you? What are the things that could be deal breaker for you? And what are the things that you just need to confirm? And that's actually a really good point. What are the biggest mistakes that you see being made during the due diligence stage? Your diligence stage from a business owner perspective? Yes, business owner's perspective. Well, I would imagine it'd be lack of preparation, but what are the most common issues that you see happen during. The most common issues is, yes, obviously, number one is lack of preparation. If it is a business that, you know, if your business is run on spreadsheets and pen and paper, it is going to be a tricky due diligence process. Depending on who's obviously the merger, or who you're merging with, or who's acquiring the company, because they're going to be requesting a lot of documents that you don't have readily available, and that's going to be an uphill battle. Two is getting defensive. You know, a lot of the times is due diligence. You know, we've gone into situations where we already know something is relatively either broken or needs of TLC. We just want to confirm our thinking. And we've gone into situations where immediately there is resistance and defensiveness from business owner to justify why things are the way they are. And then, you know, it leads to kind of harboring negative feelings and impressions. When again, it could just be a confirmatory aspect of the transaction, because when you're reviewing L.O.I. and you're comparing them, that is a proper question task. Is there remaining part of your due diligence purely confirmatory, or are you looking for body? And, you know, it sounds negative. What's the difference for those that don't know? Yeah, that one of them is, it's, look, are you ready to send me a few of your financials? I just want to confirm that. What my team looked at, you know, if that number said it was $10 million, so $5 million or $2 million, it is $2 million or around that versus I need to see proof of funds of every dollar you receive. I want to see your bank accounts and make sure that you've received it. It is part of, one of them, if you start going into quality of earnings, quality of earnings is a very normal process of due diligence. Meaning, if you're saying that you made an earnings, or seller earnings, or EBITDA, or EBITDA, whatever you want to call your earnings, if you said you made $3 million last year, I want to confirm that those were $3 million or around that boat park, and not one million because you added things that they should have not been there, because most of these businesses, because of their skill, they're not audited. So this is in a way, a proxy to confirm some of these numbers. Now, in the I've been in situations where we're asking for ledgers, for sales, for things, and that's really diving deep, and that's because something that uncovered that gave the choir some pause. Alternately of that is saying, you can be as a choisers' words, your business is relatively straightforward, and you have people saying, I just need to confirm that what are already assumed about your business, you know, that you have five trucks, or 10 forklifts. You know, we need to do a quick visit to the warehouse and make sure that the inventory you set there is there that, you know, the systems that you have in place are there. So again, higher level and deeper levels of due diligence. What are the biggest issues that you uncover during due diligence that cause you to back out other transactions? I mean, there's the nefarious things, right? So when you start milling things that give you pause because they seem nefarious, you know, and I don't want to say fraud or anything like that, but it's you start seeing things that it just come in practice of something that is a, is a bad culture, that the company has a bad culture of doing things that are borderline, not where they need to be, that's a quick red flag that will make us walk away. Two is assume that a business had a secret sauce, and we get in there in this nothing, you know, there's a lot of times where like, it's not that Coca-Cola secret for me, but it's something similar, and then we get comfortable with it quickly, but when it is something completely the opposite, you know, it's say that we look at a business that say they have AI, artificial intelligence to come up with something, and then we come in and say, well, no, we actually don't have that, we actually have 10 people in India doing this on a manual label. Well, that's very different, right? Those are things that will make us walk away, but for the most part, we try to spend a lot of time up front, so we don't get to this, the final stretch and say, oh, no, whoops, we were absolutely wrong, and that's our bad, we're going to walk away, because I think that creates really bad reputation in the market for trying to acquire companies. How intense is due diligence? You roll it affiliated, and then also with Viento capital in PE private equity. Is this just a few days of kind of looking at stuff, or is this a month or two and hiring a dozen experts in spending tens of thousands or hundreds of thousands of dollars? How thorough is this process and what should owners expect in terms of how thorough it is? I hate to answer the question with a question, but it is, is effectively how complicated is your business? If you have a very simple straight operation with, again, a clear attributable secret sauce to how you guys do what you do, you know, I found businesses that are so straightforward and they have this magic sauce and they have this ability to show you how they do it. The due diligence is quite straightforward. It's just confirming a few things, and obviously there's going to be always some risk involved in somewhat of leap of faith when you go into these transactions, but you want to minimize that to an acceptable level. I've worked in situations where we had imports from Asia that came in containers that needed to pass duties and customs, and you needed to verify all of that. You needed to do inventory checks. They were doing quick books, but some of the monies were not matching, so you needed to ensure that everything was accounted properly. That requires, you know, third-party services that require additional investments, and so it depends, it depends. What happens after due diligence is done? What's the next step? Well, so, you know, I think going back to your previous question, also, if you're doing a merger, so I'm affiliated with distributors, because we're acquiring companies that do something similar to us, or due diligence is minimal, because we quickly know what is different, what they do, and what they don't. Private equity, you're sometimes starting from zero, and you may not have a lot of information, and that may lead you to spend more time and resources to get up to speed on that industry and those practices. What happens after due diligence? I mean, it's effectively, it's once you confirm that everything, again, it should be mostly confirmatory due diligence, then you're walking to the altar, right? You're signing the definitive agreements, which mean those are binding legally binding documents that make the merger or acquisition a legally binding transaction, and so those, that's when the lawyers get quickly involved, both sets usually, on drafting, and ask the purchase agreement, or, you know, if there's equity, a similar document, we're just saying this is where we're stipulating, and there's several pages talking about what is it that is effectively happening on the transaction, and then you're walking to close, and you put a data on the calendar one day that will be effective when you get the keys to the house in a merger or a decision scenario. How intensive can the negotiations of the purchase agreement might be, by the way, is that a pretty much your, at the one-yard line, or is there still a lot of work to be done at that stage? I always say if there's a lot of contention at the definitive agreement stage, that means it was a poor job done up front, right? Because the stronger, the more detailed L.O.I. process, a diligence process, and communication process that happens up to that point, the lesser amount of contention, negotiation, or discussion that should happen at the definitive agreement. A successful transaction, you should get the buyer and seller should get the definitive agreement and say, yep, this looks just about what we've been discussing, and there are no major surprises here. If there are surprises, or still points of negotiation, then something got broken down in the process. And it happens, and happens is there's a lot of different things that you need to consider, but usually you would hope that there's little to be discussed or negotiated or question at that point. Wonderful. Well, let's take another quick break, and then when we come back, with our final round here, we will discuss your role at Vientel Capital in private equity, and this will be useful to business owners, so they can know what it's like from a private equity investor's perspective. So we'll take a quick break, and we'll be right back. Most important business transaction you'll ever make may be your last one when you sell your company. So don't go to loan. Work with an organization that's made it their business to sell businesses, and that's all they do. Visit morganandwestfield.com. At morganandwestfield, we know that selling your company isn't something you should take lightly. It can be a stressful, difficult, emotional process. That's why it's important to work with a team whose one and only specialty is selling businesses throughout the United States. Don't leave one of your most important business transactions to chance. Visit morganandwestfield.com to schedule your free consultation today. All right, welcome back. So Joanne at Vientel Capital, we're going to talk about PE private equity. What from a high level before we jump into the details, how does a PE private equity firm operate? What does a business owner need to know about a PE firm? Private equity firms are usually structured, you know, there's, I get different flavors, but most of the general aspect of a private equity firm is that it's composed by general partners. General partners are the folks that founded the vehicle and then like you with Nia GP, right? Yeah, and then you have a team of, you know, more junior staff that helps you with the kind of day-to-day analysis and and then deal transaction operational aspects. PE funds usually get their capital from different sources. So, you know, where do they get their money? They get their money from, depending on their size, they can make it from endowments or pension funds or very wealthy people that are able to write the minimum checks to be able to participate in these vehicles. And their size is, I mean, the average size of a private equity fund is continuing to increase because there's been a lot of money poured into this investment vehicle. But their function is to round up this capital. They don't always get it at once. They can have capital calls, meaning as they call the capital as they make investments. But they raise, say, they're raised up $300 million fund. But now they have, quote unquote, around $300 million minus expenses to invest in different investment opportunities. And once they make an investment, they usually hold that investment anywhere from four to six years. On average, five years, but some go out to six. And within those five years, they try to make acceptable returns for their investors, for again, for these endowments, pension, pension funds, and high network individuals. Usually, on average, the rule was that you needed to make, you know, about 25% of an IRR or a compounded return on investment after those five years. And they do it in many ways. I mean, we can spend an hour on how they make those returns. But, effectively, they find good opportunities. A lot of the times they need to come in and work in the business by streamlining few processes, reducing starting costs, and obviously making a return for themselves. And, you know, a lot of these transactions have debt. They use the concept of leveraging. So they put for every dollar that they put in a transaction and an acquisition to make, put an additional $2 of debt, you know, they paid that debt down and they make more money on the back end. But in a super, you know, compressed and scissorized way, that's kind of how the private equity funds work. So in a nutshell, they take money from the limited partners, pension funds, and so forth, take that money. They go buy companies, say they buy a company at $10 million today. And then in five years, they turn around and sell that company for 20 or 30 million. Yeah, even in the magic, the beauty of private equity is that if you buy a company for $10 million, say they you bought it, you know, you put $4 million of the private equity money and then $6 million of debt. Even if you sell it five years from now, at $10 million, because you took that $6 million of debt and you paid it down purely from the cash flow of the business, you made up with now $10 million of equity. So your $3 million of $4 million of original investment not turning to 10. So you can see the beauty of the math of the LBL leveraged biode math that the private equities have been able to employ. And then the cherry on top is that all those dollars are cap gains, you know, capital gains tax. Don't check it. And again, another episode. Joe Biden, if you're listening, don't do it. So their returns are enhanced through the leverage. How does the PE firm make money? What are most of them charging? Is it still 2% and 20% of the carried interest? Yeah, it's been, it's a model that has gotten some, it has gotten challenged in the past few years, but it's still holding quite, quite strong. Is it 220? You get you charged 2% on assets on your management. So again, if you're a $100 million fund, you're charging about $2 million on asset management fees. In 20% on the returns, assuming you meet a minimum threshold. So, you know, if you make very little money, then you're not going to make the 20%, you're going to forego the 20%, but if you make above a color water mark in terms of returns, then you can make 20% off of that. What does a business owner need to know about the difference if they're approached from a corporate acquire like affiliated distributors versus a PE firm like Vientel Capital? And you're the perfect guy to ask because you have roles at both companies, both as a corporate acquire and as a PE firm. So what does an owner need to know about that, a business owner that's potentially being acquired? It is a great situation to be in for a business owner thinking about, you know, selling a business to either corporate buyer or a poverty, because you're able to structure hopefully the best scenario for you personally and for your business. And I say that from the perspective that in traditional sense, a corporate buyer acquiring or merging with another company will always look to realize synergies quickly to make again, to deal with creative. And then I say that synergies, if it gets used, that work gets used a lot. But usually synergies are talking about cost and cost from the perspective of reduction. So hey, if I acquire a company that has IT department, but I also have a IT department, well, we don't need two IT departments, you know, and that's a cost reduction. Is that always a case? No, that is not always a case. And I think that's important for a business owner to know, but because of the fact that there are synergies on a corporate to, from a corporate buyer buying another corporate, they're also a lot of the times willing to pay for those synergies, kind of quote, so they're willing to increase the price that they're going to pay the business owner because of the fact that they're saving so the backend. That is not always, that is not the absolute rule, but is generally a PE firm on average will pay a little bit less than a corporate buyer. But again, they're not coming, they are coming with the idea of streamlining the business, there are going to reduce cost, but the cost are not as apparent as when you have a corporate buyer by you because there's less redundancies. So a PE firm may be coming in and saying, you know what, we need your IT department and we need your HR department and we need all of you. We actually want to cut the cost of printing and color. So from now on, only print black and white, those are less apparent cost savings that there are coming because that's what private equity firms do, but you know, when the corporate buyer approaches, they're a little bit more apparent. That's high level on a value perspective, on average, the corporate buyer tends to pay more because they're getting the synergies than the private equity firm. Now, currently given where the market is, the private equity firms are paying just as much as the corporate buyers because of the fact that there's so much capital out there because of the fact that there's a lot of good opportunities out there. And so private equity firms are now paying up as much as corporate buyers and they're going to make it up on the back end through some additional, you know, operation enhancements that they can do on the back end and that may include additional reduction in costs or other, you know, they bring the consultants in and they figure out how to create value organically and not just purely on buying the company cheaper. How is the overall deal for a transaction process different if you're selling to a corporate buyer versus a PE firm? You may encounter, and again, I keep saying on average because there's different flavors of this, but on average, the corporate strategic acquire will bring a lot more resources to the conversation, especially on due diligence because they themselves have an IT team because they have any charge service because they have a marketing department. So when they're buying companies that usually bring a team that does some of those functions to say, hey, look, this looks great. This does not look right. This we can do. We can bring them into our playbook and we can quickly get them up to speed on this. So you get to see a little bit of a bigger and more encompassing, you know, team from the corporate buyer private equity is usually the partner, the associate and maybe somebody else that made higher external parties to come in and help them get up to speed on things, but it's a lean team. They're coming in quickly to, and that's another important point. The PE firm may move a lot faster than a corporate buyer because a corporate buyer may have a lot of, they may need to pass it through the executive team and then the executive team may need to send it to the board and then the board only meets in certain days and then it comes you may the speed of a corporate buyer sometimes not always but could be slower than a PE firm that when the partner says yes and the investment committee within the PE firm says yes, they can move really fast. Is that for all stages of the transaction? Because I know before you said sometimes a PE firm will move slow during due diligence if they lack the industry knowledge. So at what stages does the PE firm move faster? That is a great point. Whenever there is a corporate buyer acquired something that they're intimately knowledgeable, especially if it's a competitor that they've been tracking now for a while, they can move quite fast. While a PE firm entering a new sector, you know, they may have experience in the pet care business, but this is something that is pet food and they may not know so much about pet food. So it's going to take them a little bit of what put. But again, a motivated private equity firm will work weekends, week nights, you know, 24 hours to get a deal done, corporate buyers not always. So on average, the PE firm can get up speed and move really fast. That means you're working 200 hours a week then, right? Between your two roles? Yeah, it's, you know, I think, but you know, it's my day is it's corporate development and affiliated distributors and a lot of the projects we do here. This is kind of what I do. Yeah, it is effectively, it is how quickly can you get a deal done if you need to. And now the corporate buyers, because of the world that we live in, it highly competitive, they get up to speed really fast if they need to. What is an independent sponsor? Because Vientel Capital is not your traditional PE firm. How is Vientel Capital different? Independent sponsor is a, is a new model for investment vehicles. And I say new, it's not, it's not new for say it's been around for several years, but it's newer from a perspective. It has gained a lot of traction because of the fact that a lot of the investors into private equity firms either didn't want to be committed to a fund, you know, that, that did deals, you know, for the next six, seven years. And they wanted to do just on a deal by deal basis. And there was people that had the experience to do these deals. So there were either industry veterans, they knew a sector and they had a thesis and they knew how to look at a good acquisitions and they had have done a lot of them and they said, look, we form an independent sponsor people, we'll go change this. And then once we find a deal, we raise in money or XPE guys that said, I know how to do deals, I'm trying to build a track record so I can, you know, raise my own fund and they go do it again on a deal by deal basis. So they're not going to ask him for money upfront. They say, let me go find a deal, structure a negotiated and then I'll go ask for kind of the passive bucket capital race to get the money to do it. So in a nutshell, independent sponsor is a traditional P firm will raise money from limited partners and then they go out and form a fund and then purchase companies through that fund and behalf of the limited partners. Whereas an independent sponsor might just be a family foundation that comes to you and it's just one investor. Is that essentially the difference? Yeah, I mean, the way that we did it for Vientel Capital, it's always been we, there are family offices that specialize how they made their money through manufacturing or they made their money through retail, they made their money in food and beverage. And so we know exactly when a deal, when we source a great deal and structure it, we know who is likely to be an investor. But a lot of the times it is very much a quote, unquote club deal where you're going to different family offices or even private equity firms and saying, look, this is a good deal. I have it. We need 22 million dollars. We have 18 raised. We need the last four. This is something that you will be comfortable investing. As a minority investor, not as a majority investor and not in for a lot of the family offices, that's how they like to do deals. So it's not always one. It could be many, but there are times where it's just one who sticks around to run the companies? It all depends. Again, if there is a lot of the times the family offices have executives in residence, so do the private equity firm. So they will either put somebody in place or they will just take a board seat. So there's been many situations where the current staff, including the selling owner, is sticking around under contract for a few years, while a new management is going to be sourced. And either the independent sponsor or the family office or even the private equity firm, they just take a board seat and they continue to monitor the operations. But you need somebody who posts the closing of the acquisition, sticks around to say, I need to know what's happening in operations are the goals that we set out. The operational goals to drive value are they being met and that can be on the board, but it could also be hence on deck getting and becoming part of the team or the company team to make sure that that's getting achieved and done. Are you interested in a company that where the owner wants to leave and you have to replace the owner, find a new CEO? Yeah, certainly. There have been situations where there's been a tremendous business that you deal with serial entrepreneurs and a lot of serial entrepreneurs have built good businesses and they're itching for their next venture. And so if you're close stuff to only buying companies that have tremendous culture, tremendous structure, great business and great management, you're going to limit your scope to very little out there. So we certainly have looked at businesses that have all the components except the management and transition. So you have to be able to to think ahead and say, can I soar somebody who's competent can take the vision of where we need to take this business and put them in place quickly and and if you're able to solve that, you can end up with a great great investment. All right, so trigger warning now. We're going to talk about a diversity and inclusion if anybody's triggered by those words. Why how is this creeping into the PE world? And you're the third guest in a row to bring up ESG, but how is this becoming important in the PE world? It is important for my put it in two buckets. One of them is from the PE world is because it is part of this big initiative for ESG. ESG, it's equity, social responsibility, and governance. I hope that I get that right. But it is this big idea that a lot of the money that the PE funds are getting, especially pension funds that are, you know, it's his teachers unions and police officers. A lot of that money is coming from institutions that are government-based run or have some exposure to government and there's this big push for ESG that is being asked from the PE firms to start looking at again, governance, social responsibility, equity, and inclusion environmental. And so I think that that is a big driver from money. Whenever money is requiring something, whenever the bucks are the ones that are dictating things, that that's where the ears prop open. And then we can say that that's just because it's the right thing to do. It is time to do it, but that's one aspect. The other bucket that I talk about is the fact that there is a very big addressable market that has been somewhat underserved from a capital perspective, and from an opportunity perspective, which is there are businesses that are run by people of color or by women, or there are boards that have diverse talent that you can say that is a market that may have been receiving less dollars or less attention. And from a return perspective, could be just as equally attractive or even more attractive in some cases. And so there's a big push to start looking at that. And guess what? It helps to have somebody who is from those communities at the table looking at those investments. And so that's what there's a bigger push from both. Is the right thing to do? Kind of camp, but also from the dollar perspective of we're missing dollars that we could be making by looking at that. So in a nutshell, the investors in private equity, the limited partners, the people that are giving private equity the money to invest, these could be and actually are large pension funds a lot of the times. Like you said, governmental institutions. And so these guys that are giving the PE firms money want to prioritize environmental and social objectives and not just capital. How do you think this is going to change the future of investing and private equity? I have my own personal views of what I hopefully this achieves. I do think that, you know, every time we talk about diversity is, you know, I love your trigger warning because there are mixed, there are feelings of, there are somewhat passionate on different ends and I say diversity is an important thing because it makes sense because it's a sensical that if you have dollars that are making and deciding investments, they should represent some of the opportunities that they're investing in. And at the same time, I say, well, look, if you have a growing pockets of economy, you should be a cent investor investing in those things. So I think purely from an awareness perspective, it should be done. I think that is beneficial for a company to say, if I'm going to have a board, I would like my board to be that vehicle to get really good advice, right? And that advice may not always sit well with me, but it's advice that it's going to make my company better. Now, but for the, for purely for the sense of just saying diversity for the sake of diversity, what that, I think that misses a lot of what could be good and what I think will start driving, as you say, investment decisions in the landscape of them and hate in the future. Do you think business owners in the middle market should be concerned about this at all? I don't think it should be concerned, whatsoever. But I do think that they should be aware that it will be a world at some point, where if you're a company of a decent size and you have an independent board, there may be a time and it is likely coming soon, where some both corporate acquires and private equity acquires, maybe looking and asking how diverse is your board, how diverse is your management, not necessarily because that's purely what's going to drive an investment decision or an acquisition decision, but it's also because of the fact that from a private equity perspective, they're now starting to report. They have to report that the LPs are starting to ask quarterly, tell me how many companies are you investing to have a diverse board? So even just purely from that perspective, they should be aware that that is coming. It's not here yet, but it will likely continue to increase. And again, I have my personal opinion on why I think that's beneficial, but purely from a name and a perspective, it's something that now there's going to be reporting and tracking that is coming down to buy. And I think from a business perspective, it makes sense because it lets face it, people are voting with their dollars now. And before you give it a thumbs up on Facebook or any other social platform, but now, as a business owner, the possibility exists that maybe you can't raise that round of financing or maybe that PE firm doesn't want to buy your company. We're in the process of selling a food manufacturing company right now. And I think it's a very popular potential acquisition because of the environmental aspects of the company, or getting food and so forth. And I think if they didn't have those attributes, I think we'd have a lot less traction on that particular company. So I would say that it's trite, but the futures here and investors are starting to vote with their dollars. So do you have any final words of wisdom or suggestions or advice to business owners that might listen to the show or Joe Biden if you want to defend some advice regarding, regarding capital gains tax? Yeah, I'll abstain from that. But now, I mean, for business owners, it is always such a thrill to, you know, my career to deal with the entrepreneurs and especially here at affiliate of distributors, we primary ownership structure of our members is family, home businesses. And it's always a pleasure to get to know these businesses because it is, it is a backbone of the American economy. You tend to forget that a lot of the times when we talk about, you know, the economy at large, but, but yeah, but it's also, it's true that generational transfer of businesses is difficult, right? And as you assess what's next for your business, if you're ready to relinquish the the reins and saying, what's next for the company? And you want to trust it with somebody who will take it to the next age, I would say, make sure you pick that person or that company or that entity, that fund by the result. So spend some time, seek referrals. It's never bad to ask a private equity firm or a corporate buyer for referrals, right? I think that's a quick test to say, what have they done in the past? And what's going to work best for me? Obviously, try to maximize the amount of money you make if you're going to sell, but deal with the sustainability aspect of hopefully your business and your legacy continues to to be taking care of, especially if your kids or, you know, family members are not going to be involved anymore. And if you have an independent distributor in the industrial space business, please contact me. I'm happy to talk to you, or if you guys have any direct questions, you know, you can easily find me on LinkedIn. I'm happy to serve as a sound reward in any aspect of your company or strategy. Wonderful. We'll have your show notes on our website at MorganandWestfield.com. If you go to the podcast and look for Joanne Helmer and they can contact you that way. And again, great conversation today, Joanne. We appreciated you coming on the show and hope you consider joining us on a future edition of M&A Talk. So that's Joanne Helmer. He is head of M&A for affiliated distributors and managing director of Yento Capital in Philadelphia. And again, if you've enjoyed this show, don't forget to subscribe. And again, thank you, Joanne, for joining us. My pleasure. Thank you. M&A Talk is brought to you by MorganandWestfield, a nationwide leader in mergers and acquisitions for small to mid-market companies. If you've enjoyed this show, don't forget to subscribe and leave a review. Learn more at morganandwestfield.com. While we take reasonable care to select recognized experts for our podcast, please note that each podcast presents the independent opinions of such experts only and not of MorganandWestfield. We make no warranty, guarantee a representation as to the accuracy or sufficiency of the information provided. Any reliance on the podcast information is at your own risk. The podcast is for general information only and cannot be considered legal or professional advice.