Guest Profile
Russell Iorio has completed over 200 M&A transactions in his career across multiple geographies and industries, with a transaction value in excess of $3.0 billion. As the former Senior VP of Corporate Development at Leggett & Platt, Russell served on the senior executive team and drove strategic initiatives. These included acquisitions, divestitures, corporate and business unit strategic planning, and new growth platform development. While at L&P, Russell built a robust global M&A program across their 15 business units in 18 countries, realizing returns that consistently outperformed the existing company portfolio. Russell also played a central role in a corporate-wide strategy review that led to a new strategic framework, capital allocation policy, repositioning, and the ultimate divestiture of 25% of the company’s business portfolio.
Before Leggett & Platt, Russell led acquisitions, strategic alliances, new ventures, and corporate strategic planning at PennWell Corporation, a privately-held B2B media company. His prior roles focused on M&A, investment banking, and business/financial turnaround in the communications and consulting sectors.
Russell earned an MBA with an emphasis in Finance from Rice University, and a Bachelor of Science in Business Administration, magna cum laude, from the University of Tulsa. Russell lives in Dallas with his wife and two daughters.
Highlights
- It’s easier to sell to strategic buyers because they know the business and industry much better than financial buyers.
Topics Covered
- Does corporate development only include inorganic growth? [5:50]
- Do you prefer organic or inorganic growth? [6:00]
- What are your thoughts on buy vs. build? [6:30]
- When do you prefer to buy vs. build? [7:25]
- How often do you pursue partnerships as a corporate development strategy? [8:45]
- Why would you sell (divest) one of your businesses? [9:30]
- What percentage of your acquisitions do you ultimately divest? [10:10]
- What drives the decision to divest? [11:35]
- How did Leggett & Platt get so big? [12:25]
- How critical is the institutionalization of M&A knowledge in corporate development? [13:30]
- What is the most difficult aspect of strategic planning? [16:20]
- How do you make the decision to divest one of your business units? [18:00]
- Can most divestitures be prevented? [19:50]
- Management buy outs (MBOs) [21:00]
- How do you value a business? [22:25]
- How do you decide whether to use an investment banker? [23:25]
- What is the biggest value investment bankers provide? [24:30]
- Is the decision to sell usually straightforward? [25:30]
- What is the next step after you have decided to sell? [26:20]
- How do you structure a stay package for a management team? [28:55]
- How common is it for the management team to not like the buyer? [32:30]
- How often does the buyer have no interest in retaining the management team? [33:50]
- What role does the management team play in the transaction? [35:15]
- How do you maintain confidentiality? [36:35]
- Do you need to sell the management team on the reason for the divestiture? [39:10]
- What are the next steps after you have decided to sell? [40:00]
- What does the dis-integration process look like? [42:00]
- How important is timing the sale? [45:45]
- How long does the sales process usually take? [47:50]
- What are your favorite valuation models? [48:35]
- What are the most common problems you see in valuations? [49:45]
- How has COVID impacted valuations? [50:35]
- What role does the management team play in the process? [51:30]
- Is the management team involved in negotiations? [52:10]
- Do you more commonly sell to strategic acquirers or financial buyers? [52:40]
- Do financial buyers usually have synergy with the target? [55:00]
- Divestiture vs. carve out [55:30]
- Who pays more – financial or strategic buyers? [56:40]
- Does the buyer usually divulge their sources of synergy? [57:15]
- How do you determine a transaction structure? [57:45]
- Asset vs. stock sales [59:40]
- How do you maintain competitive pressure amongst buyers? [1:01:40]
- What’s the most difficult aspect of divesting a company? [1:02:30]
- Where do you see the future of divestitures? [1:03:30]
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Resources Mentioned
