April, 2016     
MidMarket Talk:
Join Us In Welcoming Our Newest Members!

 

The Alliance of M&A Advisors invites you to check out our new Members here.

 

Visit our Member Directory to find Alliance Members near you! 

 
At the Alliance of M&A Advisors, we know that our members are among the best in their field. MidMarket Talk offers Alliance Members the platform to share their research, insight, and professional experiences. The Alliance offers Networking opportunities, education, and resources geared toward those in the middle market. Interested in becoming a Member of the Alliance of M&A Advisors? Visit us online at www.amaaonline.org

 

Join Us For A Special 50th Class

May 2-6 in Chicago, IL

 
The CM&AA (Certified Merger & Acquisition Advisor) Certification has become the "Gold Standard" for Middle Market Corporate Financial Advisors.  The 5-day program builds on your existing skills providing you with the necessary framework--and network--to further advance your professional and financial goals as well as those of the clients you serve.
 
Other dates and locations available  online , call us at 312-856-9590, or reach us by email at info@amaaonline.org

Upcoming Chapter Meetings
Keep an eye out for these
Upcoming Meetings

Attend a Chapter Meeting near you! 
 
Midwest Chapter Meeting
Thursday, April 28th 

New England Chapter Meeting
Monday, May 9th

Central PA Chapter Meeting
Tuesday, May 10th 

Get Involved
The below chapters are in the development stages.  Want to be more involved with a new chapter in your area? Please email  Corinne Samuelson, and she will schedule a call with David Belew, Director of Member Services.
  • Gulf Area (Houston)
  • Cleveland
  • Florida
  • Northern California
  • Southern California
  • Brazil
  • Minneapolis
  • China
  • Europe
Join Today!
Why Become a Member of The Alliance?
  • Gain access to valuable Member Benefit technology platforms
  • Gain a valuable network of M&A expert Members who act as resources for other Members
  • Featured on our Member Directory, accessible to the public
  • Receive discounted rates to Alliance of M&A Advisors events

We are currently working to relaunch the MidMarket Alliance website, more updates to come! 

Mergermarket Life Science and Healthcare Forum
April 27, 2016
New York City

Use the Code: AMAA30
For a 30% off discount!

Attend the annual event from Mergermarket and BioPharm Insight that will bring together dealmakers in the life sciences and healthcare sectors. Industry leaders will explore M&A's key role in these dynamic landscapes as they position themselves to maximize opportunities and returns while minimizing risk. 


Please help with an important piece of research The Alliance of M&A Advisors is carrying out in cooperation with IR Global. 

BCMS Corporate is pleased to announce the sale of Elite International Foods, Inc. to Carey Management, Inc. (CMI).  
Headquartered in Calgary, Elite operates as a direct-to-store distributor of gourmet quality domestic and imported foods to close to 1,000 active grocery and specialty food retailers across Alberta, Eastern British Columbia, the Yukon and the Northwest Territories.
 
Founded and based in western Canada, CMI currently manages Canada's largest independent distributor of tobacco, confectionery, grocery and food-service products with operations that extend from the Pacific to the Atlantic and all the way north to Canada's third coast in the Arctic. Every year the company delivers millions of products to both national and independent retailers in the gas, convenience, entertainment and grocery channels. The acquisition adds further stores and products to the existing portfolio and presents further synergies with brands they currently own.

BCMS Corporate N.A. Ltd. acted as Exclusive Financial Advisor to Elite International Foods Inc.  

For more information visit: http://www.bcmscorp.com 

Submit Your Completed Tombstone to Tracy Flack


What Do the Invoicing Details, Payroll Files & Time Sheets Tell a Buyer?
Join BKD for this complimentary webinar Tuesday April 26th to learn how the buyer can use the seller's various databases to gain insights not commonly captured by the seller's standard reporting system. 

One CPE credit in Specialized Knowledge & Applications field of study may be awarded upon verification of participant attendance. 

  

Cross Border M&A: Mexico

An original publication by the Alliance of M&A Advisors

 

Alliance Members, Luis de la Prida, Emilio Carrillo and John Colter drew on years of specialized experience with cross border M&A in order to provide the insight in the Cross Border M&A Mexico white paper. Below is an excerpt from the original publication.

 

Background:
The United States is Mexico's leading trade partner, ahead of China, while Mexico is the third largest for the U.S., behind China and Canada. The US and Mexico have strong economic ties through the North American Free Trade Agreement (NAFTA). Much of the trade between the two countries revolves around production sharing. As a result there is a network of vertical supply relationships, especially across the U.S. - Mexico border. Many U.S. manufacturing industries rely on Mexican manufacturers. The two countries cooperate in setting standards on issues such as safety. Mexico's economy is closely linked to the U.S. economy due to strong trade and investment ties. Recent government reform measures in Mexico are expected to stimulate economic growth.
Size of the lower middle market:
Approximately US$10 million to US $25 million

Positive aspects of conducting business in Mexico:
Mexico represents an attractive, untapped market for the U. S with a large population of young people. Advantages to both parties include both geographic proximity and economic ties. T here is a win - win aspect as U.S. companies seek diversity and Mexican companies seek growth.
 
Local businesspeople are generally hospitable and helpful, and visitors are welcomed like family. Since entering the North American Free Trade Agreement (NAFTA), Mexican business customs have become very similar to those of the United States and Canada.

Long distance communication:
Modern standards of Internet and telecom services exist in major cities. Telecom is improving nationwide. While it is common to hold video or teleconferences in the main urban areas, in person communications are always preferable, with telephone voice communication being the second choice. Emails are best left for day - to - day and follow up matters.
 
Business introductions:
Introductions should never be made through email. They should always be made through a third party, ideally in person.
You can read the entire white paper on cross border M&A in Mexico, Brazil, and India by clicking on the links.
Register now for the 2016 Summer Conference: Accelerating MidMarket Growth
 
 July 27th - 29th in Chicago, IL
What's th e Buzz on Our Last Conference?
Observations from the AM&AA 2016 Winter Conference
By: Michael Poole 

I had a fun time speaking to the Winter Conference of the Alliance of M&A Advisors (AM&AA) a few weeks ago. The topics were wide ranging on various investment banking issues. Below I share a few of the observations. 

Growing PEG Presence
During the past ten years, private equity firms (PEG) have become a more dominate player in the merger and acquisition market. Today PEGs represent represent approximately 42% of all transactions whether in the creation of a platform or add on. Most of the shift occurred between 2008 and 2011 when PEG activity increased from an estimated 26% of all transactions to our current level. PEG transactions over the past few years has been relatively even between platform and add-on activity. Reasons for this shift could be due to PEGs increased focused on growth through acquisitions. And, the fact that the vast majority of companies will never complete an acquisition. PEGs have an abundance of equity and access to debt markets, which many privately held firms do not. In 2008 when the shift started to occur, many privately held firms were retrenching due to the recession. Although PEGs had their fair share of troubled companies, the PEGs still had investable funds that needed to be deployed. 

Read Full Article  here

Mid-Market M&A: The Valuation Gap

"Over the last year, a paradox has persisted in the North American mid-market: buyside interest in deals has been at an all-time high, and yet the number of deals has fallen. With corporate cash holdings and private equity dry powder still at high levels, the appetite for mid-market deals will remain robust. The question is: how can buyers and sellers close the valuation gap?" - Mike Nall founder & managing director of The Alliance of M&A Advisors

Our Media Partner Mergermarket, together with virtual data room provider Firmex, asks six leading experts for their take on how big a part has a valuation gap played in stalling North American mid-market M&A.

Download & Read the Full Article here


 
Articles Are Written By Our Expert Members

Alliance Members, want to get noticed?
With over 30,000 subscribers, MidMarket Talk is a great place to be featured. Members can submit their articles to Liz Huntley  For media trades contact Tracy Flack.
  • Send us your completed deal tombstones
  • Tell us about your speaking engagements
  • Send us your articles or white paper summaries
Yahoo and Tumblr Deal:
Sales Integration Epic Fail Part I
 
By Dr. Keith Dundar
Founder and CEO of Potentious
 

Yahoo-Tumblr Deal

Yahoo has been in the news lately, and about 99.9% for all the wrong reasons. Yahoo has made news for its stake in Alibaba, Marissa Mayer's leadership (or lack thereof), activist investor Starboard Value's proxy fight to replace the company's board of directors, falling share price, and of course its acquisitions. Mayer came to Yahoo from Google on a mission to reinvigorate Yahoo's talent, so acquisition was the tool to accomplish this goal. Yet, not all acquisitions are created equal, and that is the case with Yahoo's acquisition of Tumblr in 2013, which stands on the precipice of the M&A failure chasm. An acquisition intended to spur growth and help Yahoo reach younger and mobile customers, the deal self-imploded over what is a case study of a sales integration "epic fail."

Sales Integration Epic Fail

In 2013, after a very quick engagement headed by Mayer, Yahoo acquired David Karp's Tumblr for $1.1B (USD). Yahoo had high hopes of leveraging Tumblr similarly to how Google leveraged its acquisition of YouTube, according to an unnamed source:

"I think this is going to be a smart deal...There's a huge amount of traffic Tumblr is monetizing very modestly. Assuming Yahoo manages this well and appropriately, I think there is a ton of upside, no different for Yahoo than YouTube was for Google." 1

While Yahoo saw this acquisition as a great business deal, Tumblr users had a much different perspective. As Ben Gomes-Casseres stated in his Harvard Business Review blog on the acquisition:

"As Yahoo goes through with its acquisition of Tumblr, CEO Marissa Mayer may have a user rebellion on her hands. The early reaction from the Tumblr community is not encouraging-blogs lit up with memes of crying babies and apocalyptic rants upon the announcement of the news. The uproar was bolstered by stories critical of Yahoo's earlier acquisitions, and fueled by rumors that Yahoo may introduce advertising to the popular blogging site." 2

As part of the deal,Yahoo and Mayer decided to keep Tumblr and Yahoo separate, and not conduct a full integration. That the two companies would not be combined was "promised" to Tumblr employees-and Yahoo's failure to stick to its promise has come back to haunt it now.


Click here to continue reading Part 1.
Read Part 2  
April Resource
In Partnership with Divestopedia  
Spring Clean Your Revenue First, Then Grow it 
By Eric Hamdan 

Too many companies grow their revenue without knowing if they're actually earning a reasonable margin. Most literature will tell you that a growing top line is critical to a higher valuation. However, if you are growing your revenue line by offering your services at a discounted price, are you really creating value? In my previous article, "Intrinsic Value per Share and the Roadmap to Measurable Value Creation," I singled out clean revenue as one of seven drivers of a higher multiple. In this article, I get into this concept in a bit more detail.
Revenue can be improved by increasing price, improving utilization or productivity, and/or increasing volume. However, companies get in trouble when they start increasing volume by discounting their prices or taking on subprime clients to secure market share. This is a slippery slope.
When buyers look at businesses, they assess the quality in the numbers more than the quantity in them. A company that generates $10 million of EBITDA on $50 million of revenue (a 20% EBITDA margin) is more valuable than one that does the same $10 million of EBITDA, but on $80 million of revenue (a 12.5% EBITDA margin). The more profitable company often has a much lower working capital investment, lower equipment requirements, and lower labor intensity than the lower profitable one. Both deliver the same EBITDA, but the more profitable one does it with less effort.
Read the entire article  here

What Matters to our Members
The opinions expressed by Members of the Alliance of M&A Advisors do not necessarily represent the opinions of the Alliance and spotlighting such causes does not constitute and endorsement. In this case, the Alliance of M&A Advisors does in fact support the Campaign for Clarity.
 
Members of the Alliance of M&A Advisors are actively involved in the M&A community often champion various initiatives and legislation. Members like Todd Cushing support causes they feel passionately about. In 2007 Todd Cushing served as president of the MBBI (Midwest Business Brokers and Intermediaries) and it was there that he learned about the Campaign for Clarity.
 
The objective of the  'Campaign for Clarity initiative, championed by the Alliance of M&A Advisors (AM&AA),  is to direct Congress to simplify the registration process for firms that broker the sale of businesses and reduce the regulatory costs for buyers and sellers of small and mid-sized privately held companies.
 
After making a generous donation to the campaign, Todd hopes that the initiative will bring clarification and definition for professionals involved in lower middle market transactions, not just broker dealers and attorneys.

He continues to support the Campaign for Clarity by donating 2% of his company EBIT Associates Ltd's gross fees from deal closings.
 
Todd's advice for other supporters is to get in the game and be proactive. He believes that when deals close, jobs are being saved, and companies are growing therefore "what's good for your client is good for you."
 
Other causes Todd and his wife supports are local and global ministries, missionaries in Africa and Mexico, putting Third World kids through college, food kitchens in Chicago and the Wounded Warrior Project.
Interested in Becoming A Member?

Members of the Alliance of M&A Advisors (The Alliance) represent businesses ranging from $5 to $500 million in transaction value. Membership with The Alliance provides access to a worldwide network of 1,000 M&A Professionals, exclusive pricing on conferences, certification and training opportunities, special discounts on cutting edge software, as well as speaking and publishing opportunities. 


 
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The Alliance of M&A Advisors┬« 
(The Alliance) is the premiere International Organization serving the educational and resource needs of the middle market M&A profession. Formed in 1998 to bring together CPAs, attorneys and other experienced corporate financial advisors, the Alliance's 1000+ professional services firms - including some of the most highly recognized leaders in the industry-draw upon their combined transactional expertise to better serve the needs of their middle market clients worldwide.