12 Concepts We Can Learn About M&A Deals and Attorneys From How2Exit's Interview Mathew Saur - Watch Here E120
Here is what my team and I learned from this interview: (These are notes from team members, writers, sometimes AI, and even listeners who submitted what I learned loosely edited and shared here) - If it seems a bit unrefined, you're reading our notes, so. Yeah. -Ron
Concept 1: Why He Got Into Corporate Law
Entering the corporate law field can be a daunting prospect, but it can also be incredibly rewarding. Matthew Sauer, co-founder and partner of Wolverine Co., a strategic legal advisory out of New York City, is a prime example of someone who has been successful in this field.
Sauer grew up outside of Baltimore and was a football player in high school and college. He was recruited to Teal College, which is between Pittsburgh, Erie, and Youngstown in Western Pennsylvania. Though he initially planned to become a sports agent, he was encouraged by his dad’s college friend, a successful NFL agent, to pursue corporate law instead.
Sauer went to Notre Dame for law school and had the intention of getting into transactional work from the start. He was able to get an internship at Cravest, Swain and Moore in New York City, which helped to reinforce his interest in mergers and acquisitions and corporate work.
Now, Sauer focuses on family and founder-led businesses of all sizes, public and private. His advisory practice helps them through catalytic, transformational, and strategic events, such as mergers and acquisitions, governance issues, capital raising, and disputes. He also provides strategic consulting services, such as helping businesses cut costs, make more money, and create creative partnerships.
Sauer’s story proves that with dedication, hard work, and a willingness to explore different opportunities, anyone can be successful in the corporate law field.
Concept 2: Explore Career Options Before Committing
When Ronald was younger, he thought he wanted to become an intellectual property lawyer. Ronald was only a few classes into the program when he found myself in the middle of a divorce. He couldn’t afford to pay for the alimony and all the other costs associated with the divorce settlement, so he had to drop out of law school.
Fortunately, he was able to get a consulting gig in IT, running big projects and data centers. As part of the contract, Ron was looking for a desk, and asked if he could sit beside the IP attorney in his over sized office, it had empty desks and was near the teams I was hired to help. He wanted to get to know the attorney and see what he did. After watching him for six months, Ron realized that most of his job was paperwork and research and not the “cool inventions” he had imagined. Now he's very glad I didn’t pursue a career in IP law.
Matthew Sauer, started out in sports, wanted to go be a sports agent, then was convinced to look into law, and thought about pursuing a career in litigation. He knew I didn’t really want to do it, but I figured it was worth a try. He soon realized that it was mostly writing papers and not the courtroom drama I had seen on TV. I knew then that litigation wasn’t for me.
Matthew Sauer, then decided to start his own firm. He wanted to focus on the “premium” piece, the valuable piece where you need a personal connection to understand the deal and help clients through it. I also wanted to outsource the labor-intensive pieces of the job, such as the diligence and documentation work. This model fits my personality way more than the high-leverage model of big firms.
These two stories are great examples of exploring and trying things out before making long-term commitments. If you are looking at industries that are new to you, find ways to try out the new role, maybe interview people in the space, because once you've bought a company, it's a bit to late to figure out it just wasn't the right fit for you.
Concept 3: Lawyers Provide Beneficial Skills
Ronald talks about his economics professor who had a law degree and was a successful real estate investor. He maintained his license because it gave people the impression that he knew what he was doing and they were less likely to mess with him. This is a great example of how having a law degree or a great lawyer on your team can be beneficial. It gives you credibility and expertise that can be essential in any business.
In addition to real estate, a law degree can be beneficial in other areas, such as mergers and acquisitions. Sauer was able to use his legal knowledge to help advise M&A deals, roll-up strategies and even acquire business interests of his own. This is a great example of how having a law degree can be beneficial in the business world.
In addition to just the acquisition or exit paperwork and due diligence, lawyers can/should be early and periodically in any advanced business strategy. Every element of M&A from how you structure the deal, to how your raise money and even when and how it's closed (take or give up ownership) carries different legal obligations and risks.
Overall, it’s clear that having a law degree or a skilled lawyer on the team can be beneficial in a lot of different ways. It provides you with a hidden skill that can be beneficial in a variety of areas. Whether you’re interested in real estate, mergers and acquisitions, or any other area, having a law degree or a great lawyer on the team can be beneficial. Lawyers provide beneficial skills that can be essential in the business world.
Concept 4: Leverage Debt For Multiple Expansion
Leveraging debt for multiple expansion is a strategy used by private equity firms to increase their value and profitability. This strategy is used by private equity firms to purchase a platform business, scale it up, and then acquire other ancillary businesses in the same industry. This allows them to share overhead expenses, increase their margin, and ultimately increase their value when they sell the business.
For example, one of the most popular industries for leverage debt for multiple expansion is the collision repair industry. Private equity firms purchase collision repair shops in a region, professionalize them, and then continue to buy other shops. This allows them to share overhead expenses, increase their pricing power for parts, and increase their margin. After five to seven years of acquisitions, the private equity firm can then sell the business for a higher multiple because it is a bigger business. This strategy has been used by billionaires such as Steve Schwartzman and Henry Kravis to make a lot of money.
Another example of leverage debt for multiple expansion is the marketing agency industry. Private equity firms can look to purchase marketing agencies that are fragmented and have a glass ceiling, preventing them from bidding on larger contracts. These agencies are big enough to have the talent but too small to bid on the right jobs.
Concept 5: Network And Build Relationships
It is important to remember to network and build relationships that are key to success. For example, if you are looking for potential divestiture, It is necessary to “pound the pavement with the corporate development folks and talk to them” in order to find out about these divestitures.
Additionally, it is important to build relationships with investment bankers, as they “know where all those assets are” and can inform you of potential deals. Furthermore, it is important to have a “flow” of calls in order to be informed of potential deals.
Great people to network with are corporate development people, CPA, estate planners, divorce attorneys, financial advisors, tax advisors, and bankers. These are just some of people who will know of potential deals early on.
Concept 6: Identify Team Needs Early
You must have a team of experts who can help you evaluate the deals, manage the process, and ensure that you are making the right decisions. It is important to have a good lawyer and CPA on your team to help with the due diligence and legal aspects of the deal. Additionally, you should have an IT expert who can help you set up the necessary systems and infrastructure, as well as a systems and process expert who can help you document the procedures and processes associated with the company. Finally, you should also have a strategic team who can help you evaluate the deals and make sure that you are making the right decisions.
Having the right team in place is essential for success in M&A at any level. Without the right team, you may find yourself in a difficult situation, unable to make the right decisions or unable to bridge the gap between the larger company and the smaller company. Additionally, it is important to have a team of experts who can help you understand the services that you need and the services that you don’t need, as well as the infrastructure and systems that you need to set up in order to make the deal successful.
Concept 7: Know What You're Getting Into
Even with the right team in place, you will still have to be involved in the process. You cannot simply buy a business and expect it to run itself. You will need to be involved in the day-to-day operations of the business, and you may even need to step in and take over the operations if there is no management team in place or when key players leave. Additionally, even if you have a management team in place, you will still need to be involved in the process to ensure that everything is running smoothly.
It is also important to understand that even with the right team in place, you may still need to be involved in the process of finding a new operator if the current one leaves. It can take anywhere from six months to eighteen months to find a great executive, and it is not as simple as just finding someone to fill the position. You may need to “steal” a great operator from another company, and this can be a difficult process.
Concept 8: Roll Up Your Sleeves
One of the most important things to understand when buying or selling small businesses is that you need to be willing to “roll up your sleeves” and get involved in the process. This means that you need to be willing to take on some of the more mundane tasks that go into running a business. This could mean anything from interviewing potential employees to dealing with regulatory issues. In other words, you need to be willing to do the work that is necessary to make the business successful.
For example, the host talked about when was talking to a friend about his desire to buy a business, the friend mentioned that he would do anything for the right money. However, the host noted that he had visited the owner of a septic removal business and the man always smelled a bit like septic or that chemical in port-a-potties. The hosts friend pushed back and said he didn't want a smelly business. This shows that even if you are the owner of the business, you may still need to get your hands dirty in order to make the business successful and just because it makes great money doesn't mean you'd want to own it.
The host and guest both agreed that the "turn-key/self ran" business is as much of a myth as saying real estate is a passive investment. Most of the time someone else can run it and you can just be an owner, but not all the time. There are always going to be situations that require you to become very active in the business and if that isn't something your willing or able to do, then it's likely not a right fit.
Concept 9: You Can Secure Vehicles With Armor
On a side topic, Matt Saur has an ownership interest in a vehicle armoring company and they spoke about what that was like.
Secure vehicles with armor are becoming increasingly important in today's world. Armor provides protection from physical threats, such as bullets, explosives, and vandalism. Armor can also provide protection from cyber threats, such as hacking and identity theft. Armor is often used in military and law enforcement vehicles, as well as in private vehicles.
When it comes to vehicle armoring, there is often only one player in the United States. Matt and his partner see this as an opportunity to get business. With only one player, the potential customers have no choice, but with a new player in the market, they can get disgruntled customer and people looking for something different than the previous company would do.
Concept 10: Negotiate Beyond Money
When looking at deals, it is important to understand the customer base and the potential for growth. A private equity firm may be involved in the process and you need to understand how the market works and what the customer is looking for. This can be done by building strong customer relationships and understanding what they are looking for in terms of products and services.
In addition, when it comes to negotiating beyond money, you also need to understand the market and the current economic climate. For example, the health and wellness sector is not as likely to be hit as hard as other industries during a recession. This means that investing in this sector may be a wise move. However, you need to be aware of the potential risks and be prepared to wait out the market if necessary.
Finally, when it comes to negotiating beyond money, you need to be aware of the seller's needs and wants. The highest bid may not always be the winning one. You need to be creative and understand what the seller is looking for. This could be in the form of a long-term payment plan or other creative solutions.
Concept 11: Understand The Motivations
When it comes to negotiating a deal, it’s important to understand the motivations of all parties involved. Whether you are a buyer looking to acquire a business or a seller looking to divest, understanding the motivations of the other party can be the difference between a successful negotiation and a failed one.
When it comes to buyers, understanding the motivations of the seller is key. In order to make a successful offer, buyers need to understand the seller’s motivations and needs. This includes understanding the market, the customer base, and what the seller is looking for in terms of price and terms. It is also important to understand the seller’s need for an operator. If the buyer is not able to provide an operator, then the deal may not be successful.
For sellers, understanding the motivations of the buyer is key. Sellers need to understand the buyer’s financial and operational capabilities and determine if the buyer is a good fit for the business. Sellers also need to understand the potential risks of the deal and be prepared to negotiate terms and price accordingly.
In addition to understanding the motivations of the buyer and seller, it is important to be creative in your solutions. There are often creative solutions to a deal that may not involve a large amount of money. For example, a seller may be more interested in preserving their legacy or brand than getting a large sum of money. In this case, the buyer may be able to offer terms that are more favorable to the seller.
Finally, it is important to understand that the process of negotiating a deal can take a long time. It is important to be patient and understand that there may be several rounds of negotiations before a deal is reached.
Concept 12: Connect With Matt Saur
Matt Saur is an experienced advisor and investor in the business space. He is passionate about connecting with businesses and helping them achieve their goals. He is always looking for interesting businesses to work with and is open to discussing any kind of deal. Matt is active in the market and is a great resource for advice on capital raising, M&A, disputes, and other strategic matters. He is also connected to many different networks and can help connect buyers and sellers to the right end markets or providers.
Matt is open to talking to anyone and is always interested in hearing new ideas. He encourages people to reach out to him and not be shy. He can be contacted on Twitter, LinkedIn, or through his websitewooleryco.com. He is also open to being contacted on his new hotline 918-641-4150.
For those looking to connect with Matt Sauer, he recommends that they reach out to him on Twitter, LinkedIn, or Warico.com. He also encourages people to follow him and engage with his content. He is always open to hearing new ideas and is willing to change his mind if presented with a compelling argument. Matt is an experienced advisor and investor and is passionate about helping businesses succeed. He is always looking for interesting businesses to work with and is eager to discuss any kind of deal. He is also connected to many different networks and can help buyers and sellers find the right end markets or providers.
Connecting with Matt Saur is a great way to get advice on capital raising, M&A, disputes, and other strategic matters. He is open to talking to anyone and is always interested in hearing new ideas. He encourages people to reach out to him and not be shy. He can be contacted on Twitter, LinkedIn, or through his website wooleryco.com. He is also open to being contacted on his new hotline 918-641-4150. With his experience and knowledge, Matt Saur is a great resource for anyone looking to get advice on business deals.
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