Mergers & Acquisitions

M&A Talk Podcast

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Home Podcast A Broad Look at IPOs, Private Equity, and Preparing for a Sale

A Broad Look at IPOs, Private Equity, and Preparing for a Sale

A Broad Look at IPOs, Private Equity, and Preparing for a Sale

Jay Wright

Investment Banker | Author

Join us for a talk with Jay Wright, investment banker and author, as we discuss IPOs, growth equity in the public and private markets, and an overview of how to prepare your company for sale. This wide-ranging conversation with Jay taps into his decades of experience as an investment banker, CFO, CEO, and Chairman of multiple firms. Jay shares his passion and expertise in structuring private placements and creating exits via mergers and acquisitions and open market sales. This is the episode to listen to if you are interested in preparing your business for sale.

Guest Profile

Jay Wright has over two decades of expertise in corporate governance, mergers & acquisitions, and corporate finance for public and private equity and venture capital firms. His previous experience includes roles as a CFO, CEO, and Chairman at multiple privately held firms and an investment banker at Merrill Lynch. Jay is an adjunct professor at Georgetown teaching undergraduate Finance and Investment Banking. He is also the co-author of the 6th and 7th editions of Finance and Accounting for Nonfinancial Managers with Professor Bill Droms. Jay is passionate about helping companies grow and achieve their goals. Jay has a deep belief in the value of education for young people and is happy to serve the secondary school in his hometown as a trustee.

Topics Covered

  • The difference in mindset between practicing law and M&A [4:30]
  • At what point do companies start to institutionalize their business? [6:00]
  • What’s your advice to companies looking to go public now? [7:20]
  • Is an IPO an exit? [8:15]
  • What is the goal of going public? [9:00]
  • What are the alternatives to an IPO for offering shareholders liquidity? [10:20]
  • What is growth capital? [12:00]
  • How do private equity firms operate and what do they look for? [13:00]
  • Does the owner need to stay post-acquisition when selling to a private equity firm? [15:25]
  • What are the differences between public and private equity? [16:05]
  • How does a private equity fund work and how long are the typical holding periods? [17:50]
  • How much higher are multiples for public companies? What is the difference between a PE and an EBITDA multiple? [21:05]
  • The private market discount [24:50]
  • What do buyers look for in acquisitions? [27:00]
  • Should you have your financial statements audited before you sell your company? [31:00]
  • How many years of financial statements do you need to have audited? [32:00]
  • Reviews and compilations vs audits of financial statements [32:40]
  • How extensive should pre-sale due diligence be? [33:30]
  • How extensive should pre-sale legal due diligence be? [34:30]
  • Should your in-house attorney conduct pre-sale due diligence? [36:20]
  • How do you handle a minority owner during a sale? [37:10]
  • Transaction structure — asset sale vs. stock sale vs. mergers [40:00]
  • How do you get rid of a minority partner without selling the entire company? [41:00]
  • What standard of value is used when valuing a minority interest? [42:45]
  • What type of appraisal is recommended when selling a company? [43:45]
  • What are the most common employee-related issues in M&A? [44:50]
  • Are employment agreements assignable? [48:45]
  • How are employees transferred? [50:10]
  • How effective are stay-bonuses with employees? [53:25]
  • Can you still sell your business if there is pending litigation? How does a litigation escrow work? [54:30]
  • What is the impact of threatened litigation? [56:30]
  • Should attorneys charge by the hour or a flat fee? [57:30]
  • Typical fees for M&A intermediaries and attorneys [59:45]
  • How are flat fees for attorneys structured? [1:02:00]
  • What are the differences in deal structures between different types of buyers? [1:03:45]
  • How is rollover equity structured? [1:06:00]

Learn More

Acquired

Acquired

The Art of Selling a Business With $10 Million to $100 Million in Revenue

Written by Jacob Orosz, President of Morgan & Westfield

For a business to sell for what it’s really worth – or even more – you need to properly prepare. But too many entrepreneurs put off planning the sale of their business until the last moment. Acquired – The Art of Selling a Business With $10 Million to $100 Million in Revenue will help you prepare your business for sale and walk you through the sales process, dodging the pitfalls along the way. With a significant amount of your wealth tied up in your business, planning your exit is one of the most critical initiatives you’ll undertake.

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