August 7, 2025 • 46 mins
The mysterious world of mergers and acquisitions can feel like navigating a labyrinth blindfolded for business owners facing their first exit. This eye-opening conversation with veteran M&A attorney Marc Solomon pulls back the curtain on what really happens when selling your business to sophisticated buyers.
Marc brings a rare perspective most attorneys lack – having personally built, sold, and managed a business before returning to legal practice. "I've been a small business owner, I've been through an exit transaction, I've been a corporate executive, and I've been a business attorney," he explains, allowing him to understand client objectives from multiple angles.
The discussion reveals critical details many sellers overlook until it's too late. When that attractive purchase price appears in a letter of intent, few business owners recognize how much of it might be tied up in promissory notes, rollover equity, or future earn-outs. As Solomon pointedly observes, "It's not necessarily what the price is at closing – how much of that money do you really collect several years down the road when you look back at the deal?"
From the psychological pressure of due diligence (humorously described as "the colonoscopy" of business deals) to the technical complexities of working capital adjustments, disclosure schedules, and tax reorganizations, the podcast illuminates why having the right advisory team is non-negotiable. Private equity firms approach acquisitions with armies of professionals who do this work daily, while most sellers are experiencing it for the first time.
Perhaps most valuable are the practical insights on escrow holdbacks (typically 5-10% for 12-18 months), representation and warranty insurance for larger deals, and ensuring rollover equity doesn't come with hidden disadvantages. Solomon's explanation of how seemingly standard contract language about GAAP compliance can create massive post-closing liabilities shows why expert review matters.
Ready to navigate your business sale with confidence? Connect with Marc Solomon and the South Florida M&A Advisors team to build your transaction support system before entering negotiations with sophisticated buyers.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Welcome to the South Florida M&A Advisors podcast,
your trusted M&A team.
Here's your host, Russell Cohen.
Speaker 2 (00:13):
All right, good morning.
I'm Russell Cohen, the owner ofSouth Florida M&A Advisors, and
this morning we have MarkSolomon from YSAROTA.
Mark is a M&A attorney, is mygo-to M&A attorney, so I thought
it would be great to, insteadof just Jeremy interviewing
myself, to expand the podcastand bring in guests and for my
(00:36):
clients to see my deal team andMark Solomon and I have known
each other over 20 years, so I'mso happy to have you, mark.
Thanks for joining me and, youknow, welcome to the podcast.
Speaker 3 (00:48):
Thank you, Russell.
Appreciate being on the podcast.
It's a pleasure to be here.
Speaker 2 (00:53):
Awesome, awesome and first time doing the interview,
so excuse me if not reallyexperienced that, but we're
going to give it a try.
Like I said, mark and I haveknown each other for over 20
years.
Mark has done many, manytransactions in my career and I
could tell you, incredibleattorney.
He has an incredible niche inmergers and acquisitions and
(01:15):
he's been on one of my largestdeals and I could vouch that
Mark is a great M&A attorneythat could help any of our
clients get to the closing table.
But let's learn a little bitabout Mark.
That's what we hear.
We want to see how you know,share a little bit about your
background and why you decidedto focus on mergers and
(01:38):
acquisitions.
Speaker 3 (01:38):
Yeah, Thank you, Russ .
Yeah, I've been living in SouthFlorida since I graduated from
law school in 1985.
And I came down here.
I practiced law for a few yearsand then I went into business
with a partner and got involvedin a trucking transportation
business, left the practice oflaw for about 10 years and grew
(02:00):
a small business and we sold itto a large public company in a
roll-up and I then stayed on inthe company that bought our
business and managed a divisionof this public company.
So I like to think that as abusiness attorney Russ, I've
been a small business owner,I've been through an exit
(02:21):
transaction, I've been acorporate executive and I've
been a business attorney, sohopefully I can understand the
objectives of our clients whenwe get involved in one of these
M&A transactions.
So I have a great respect forbusiness owners and enjoy the
kind of work that I'm doing.
Speaker 2 (02:40):
Thank you, mark.
The M&A process is extremelycomplex.
You're dealing with otherattorneys on the other side this
is the largest asset of abusiness owner on their balance
(03:00):
sheet and they're puttingemotional time for a business
owner.
So, as their attorney, how doyou juggle the psychological
side of it?
And while trying to move thedeal process as it goes through
the, as I say, the colonoscopyof all these?
There's a diligence list.
You know so many differentphases.
You know how do you juggle it.
(03:21):
It's tremendous pressure.
I can't imagine.
Speaker 3 (03:24):
you know, I never thought about the colonoscopy
part of it, but that is.
There is something to be saidfor that, because it's a
complete diagnostic, taking alook at every potential possible
aspect of the business andtrying to find some faults with
it.
Uh, if, uh, you know, if you'rethe buyer, uh, so, uh, a lot of
times my clients say to me youknow, I'm a professional in my
(03:48):
industry, but I don't understandthis M&A process.
I need you to educate andcommunicate with me.
So communication is reallyimportant to explain why
something is happening, why itmay be necessary for the buyer
to have this due diligence, howwe can properly respond to
requests, uh, but also justeducating on the process.
(04:09):
How does this work, uh, how dowe uh respond, how do we go
ahead and conduct ourselvesduring this process?
Speaker 2 (04:19):
so that we're going to get the kind of result that
the business owner wants youknow, a lot of times in the in
the m, you know a lot of timesin the M&A process there's a lot
of curveballs, a lot of unknownexpenses that pop up in the
deal with holdbacks andinsurances.
And are you guiding outside ofthe M&A advisor like myself,
(04:39):
where I try to be proactive Areyou kind of telling them in
advance?
You know, be on the lookout forcertain things, especially when
the contract comes in.
It lays down what's coming.
So you know from a proactivestandpoint.
Are you trying to say expectthis, this and this?
Speaker 3 (04:59):
I think a lot of it is.
A lot of times clients you know, particularly if you're selling
a business and you see apurchase price number and you
like the number.
Clients you know, particularlyif you're selling a business and
you see a purchase price numberand you like the number, but
you know, as you're suggesting,russ, what is behind that number
.
How is the purchase price goingto be allocated between cash
proceeds and non-cash proceeds?
Non-cash proceeds could be apromissory note payable over a
(05:22):
number of years.
It could be could be apromissory note payable over a
number of years.
It could be the seller takingequity what we call rollover
equity in the buyer's entity.
A portion of the purchase pricecould be based upon what we
call an earn out, which is theperformance of the business
after the closing.
So we always tell the clientyou know it's not necessarily
(05:42):
what the price is at closing howmuch of that money do you
really collect several yearsdown the road when you look back
at the deal and say whetherthis was very successful or not
so successful?
Because a lot of the money isnot going to be paid at closing,
it's going to be earned overtime and obviously the business
owner is looking to receive asmuch of those funds as possible.
Speaker 2 (06:07):
So explain in the M&A process how you know when that
you know you're getting involvedwith a client pro in the
process where you are involvedin when, then you know where you
(06:29):
, where you're not involved in,and then along the process of
that 90 to you know 90 days, sixmonths typically if we're
working with a, uh, an, m, aintermediary like yourself for
us, uh, you know you're going toget us involved, presumably
once you take the business tomarket, once you have one or
(06:50):
more LOIs, and we're going toget involved and work together
to try to put together the bestletter of intent we can for the
client and we're going tonegotiate that.
Speaker 3 (07:02):
We're going to negotiate the price.
We're going to negotiate that.
We're going to negotiate theprice.
We're going to negotiate theterms.
We're going to negotiate notonly the the financial terms but
some of the boilerplatelanguage that is in there,
because a letter of intent, eventhough it's not binding, it
really sets the precedent forwhat's going to be in the
purchase rate.
So a lot of times you have tolive for the most part with
(07:22):
what's in the letter of intentif you want to move forward with
the deal, because many times ifyou sign a letter of intent and
you want to change terms lateron, the buyer is going to say
that's not what was agreed to inthe letter of intent, I don't
want to change those terms.
You should have negotiated thatearlier on when you signed the
letter of intent.
Once the letter of intent issigned, then, as you know,
(07:42):
there's going to be a period ofdue diligence.
The buyer is going to have anexclusive period to look at all
of the records, financial,operational sales and they're
going to do a thorough vettingof every aspect of the seller's
business.
Once that is pretty muchaccomplished and they do what
(08:03):
they call a quality of earnings,where they're scrubbing the P&L
and making sure that the actualprofits of what's been
represented, they will turn afirst draft of a purchase
agreement.
That's when most of the heavylifting for the attorney occurs,
because that purchase agreementcould be 50, 60, 70 pages and
(08:25):
there's also going to be anumber of disclosure schedules
that have to be prepared by theseller and the seller's attorney
and the M&A advisor withrespect to that purchase
agreement.
So a lot of our heavy liftingcomes in when we start to get
the initial draft of thepurchase agreement.
Then we know we're on a coursetoward the closing.
Speaker 2 (08:46):
Yeah, thank you.
You know we've done quite anumber of deals together and,
you know, with success and whenwe got into that quality of
earnings, there are always thatlegal side of the quality of
earnings where you get pulled in.
And with the other, you know,the buy side, the private equity
attorneys, and there's a prettysignificant list of documents
(09:09):
that need to be provided.
You know, if you'rerepresenting, if you're helping
the seller, then there's a lotof documentation that you have
to put into the portal for thebuy side attorney to review.
So, yeah, you're instrumentalin the quality of earnings.
So the legal side is a big partof it, as there's probably many
, many different parts of thequality of earnings.
(09:32):
So maybe give an example ofmaybe a challenge that you had
on the legal side, withoutgiving names and you know where
maybe it was in the quality ofearnings or in the negotiations
that maybe that you were able toovercome and able to get the
(09:54):
M&A process continue on.
You know, because of yourskills as a M&A attorney.
Speaker 3 (10:02):
Yeah, there's a lot of issues that come up and
sometimes you know they are lotof issues that come up and
sometimes you know they arefairly standard issues that come
up in most deals and othertimes they are specific to the
seller's business Could be taxissues, could be regulatory
issues, could be litigationissues, licensing issues.
But you know, we have certainthings that we know we have to
(10:24):
deal with.
For instance, if there is somekind of an earn out, that
there's a sell, a note generallywhen these deals are put
together and they capitalize, isgoing to be the, the buyer
putting in a certain amount ofequity and they're also going to
borrow a certain amount ofmoney and they're going to have
a senior lender and any moneythat is distributed from the
company in the form of an earnout or promissory note payments
(10:48):
has to be approved by the seniorlender.
And the difficulty is is thatour client expects to receive
those monies, yet there are loancovenants and other
restrictions placed upon thebuyer in terms of paying out
those monies in accordance withthe structure set up by the
senior lender.
(11:08):
So we have to work on that.
If you recall, you and I workedon one deal.
We were able to get the buyerto put aside funds that were not
restricted by the senior lenderto pay our client monies that
were due in the future, becausewe did not want to have a
situation where, if monies wereearned and due, they would not
(11:28):
be paid because of therestrictions involved with the
senior lender.
So sometimes you can workaround those things.
But one of the things that'simportant is and we explain this
to clients is that there arecertain standard procedures that
take place in these deals.
Not to say that you can'tnegotiate, but there's certain
things.
There's always going to be aholdback of some sort, usually
(11:50):
Okay, an escrow, which is goingto secure the indemnification
obligations of the seller underthe purchase agreement.
So to say, I don't want to havean escrow or I don't want to
have this.
You know we have to work withthe client to say, listen, you
know there's a lot of potentialliability and we're doing
everything we can to avoidhaving the buyer being able to
(12:12):
claw back any funds.
But some things are standard,okay, and we negotiate the
amount, we negotiate the timethat the escrow is being held.
We negotiate a lot of things,but the business owner and I try
to explain this is standard orthis is not standard Okay, this
is not something that we want toagree to at all.
(12:33):
Or this is something that theprinciple is okay, but we need
to negotiate the specific termsof this.
So, understanding what is, youknow, customary and ordinary in
these types of transactions andwhat is not, is certainly
helpful in guiding clientsthrough this process.
Speaker 2 (12:52):
You know you talked about the escrow holdback and
most business owners really arenot expecting it because they're
not in this type of environmenton a daily basis.
So I guess over the years I'vebeen doing I've been noticing
it's typically about 18 monthsand maybe 8% of the actual
(13:14):
enterprise value.
So does that kind of feel like?
Is that standard?
Speaker 3 (13:20):
That's pretty standard.
I would say, Russ, you'repretty much there, because most
private equity and other buyersthey want a full year, they want
a full audit cycle.
So sometimes we can get it downto 12 months.
Sometimes we can release acertain amount of the escrow
after 12 and release the balanceafter 18.
Generally, you're right, theescrow is going to fall
(13:43):
somewhere between 5% and 10percent of the cash portion of
the purchase price.
So those are pretty standard.
And listen, we negotiate thebest that we can.
You know.
The one thing is is that wewant to work hard and negotiate
on behalf of our clients.
I think we do a good job ofthat.
On the other hand, we don'twant to negotiate a point that
(14:04):
is typical and customary andcause that to disrupt the entire
transaction.
So we want to be smart aboutwhat we're going about
negotiating and what perhaps isnot so important.
So I'm always looking at whatis important to the client and
what is not, the stuff that isnot important.
We don't want to go out andheavily negotiate it.
(14:27):
What we want to do is we wantto pick our spots and we want to
negotiate the most importantissues.
Speaker 2 (14:33):
Now you know, going back to the escrow holdback,
there's insurance companies thatoffer reps and warranties
insurance and it seems like it'sgoing down to smaller, smaller
M&A M&A deal.
So have you had clientsactually take on the reps and
warranties on a, let's say, afive, five million plus
(14:56):
enterprise value, or it's reallyon the larger, larger
enterprise value deals that it'sreally taking advantage of the
reps and warranties and it's theway the that escrow hold back
yet eliminate the s, theholdback, and it also provides
coverage for the vast majorityof any claims.
Speaker 3 (15:15):
Now there's going to be claims that are going to be
excluded on the insurance policy.
Nobody is going to go ahead andpay insurance proceeds out if
there's a fraudulent claim Okay,so we've got to be.
But it's going to cover most ofthe representations that are
made, most of the potentialliability obligations, and it's
going to be a flat fee up frontthat's going to be paid and you
(15:39):
don't have to worry about havingmoney tied up in escrow.
Uh, it's a good thing for themost part generally.
Uh, it has been available onlyon larger transactions, but, as
you suggested, it's changing.
You know, I don't know thatyou're going to get around a
five or ten million dollar deal,but today you're seeing it on
20 25 million dollar deals,where before it would have to be
(16:01):
almost like 50 or 75 million,you know.
So it's coming down.
It's more affordable, uh, whenit can get done.
I like it because it's a verygood hedge for the business
owner.
Okay, they, uh they're going topay a.
Usually the fee is splitbetween the buyer and the seller
in terms of the premium underthe policy.
(16:21):
There is a deductible under thepolicy, but, all things
considered, uh, there's a lotless exposure, uh with regard to
indemnification obligationswhen you have the insurance,
versus putting a large amount ofmoney in escrow.
Speaker 2 (16:38):
Now there's a lot of work being done by an M&A
attorney where a seller may notrealize what's going on behind
the scenes.
When we were doing our platformdeal for that large roofer,
those disclosure schedules atthe end of the contract was
extremely daunting and very timeconsuming.
(16:59):
Can you explain to the audiencebecause it might be a seller
watching the podcast what is thedisclosure schedules?
Why is it so incrediblyoverwhelming for the seller and
for the legal side?
Speaker 3 (17:21):
Yeah, the disclosure schedules are attached to the
purchase agreement and those are.
They intertwine with thedifferent representations that
are made.
We're going to have to disclosethe financial statements, the
tax returns, any potentiallitigation.
We're going to have to disclosethe financial statements and
tax returns any potentiallitigation.
We're going to list alllicensing.
We're going to list all ownersand capitalization.
Uh, we're going to list thelargest clients.
(17:44):
We're going to list the largestvendors.
Uh, we're going to deal withany regulatory actions.
We're going to deal with any ipthat is owned, any ip that is
leased.
We're going to get into everyaspect of this business and
we're going to deal with any IPthat is owned, any IP that is
leased.
We're going to get into everyaspect of this business and
we're going to list what isowned, what has occurred, and
that is what the buyer is goingto rely upon.
(18:06):
So if something was notdisclosed that should have been
disclosed, or something wasdisclosed in an improper fashion
, was not accurate, then therecould be a basis for an
indemnification claim.
So they're very, very importantin that we're communicating all
this information through thesedisclosure schedules and if it
(18:26):
is inaccurate, if it is notcomplete, that could, under
certain circumstances give thebuyer a right to seek
indemnification.
That's what they're relyingupon in purchasing the business.
So those schedules need to becomplete, they need to be
accurate and obviously we wantto disclose what's necessary.
(18:46):
We want to limit theserepresentations and not disclose
things that we're not aware ofor we may or may not know about.
So there's a little game that'sbeing played here.
The buyer wants to broaden theinformation disclose as much as
possible.
We want to narrow it as much aspossible.
So when we go through and wenegotiate all these reps and
(19:07):
warranties, that's a lot of whatthe attorneys are spending
their time on.
Speaker 1 (19:12):
It's not the fancy stuff.
Speaker 3 (19:13):
It's not the sexy stuff about purchase agreements
and prices and payments.
It's all the legalese that goesinto what could represent an
indemnification claim.
So that's something.
Again, my job is to make surethat the client gets paid to the
best of my ability and to makesure that they retain those
(19:36):
payments and they're not subjectto being clawed back.
Speaker 2 (19:40):
Perfect.
So when a private equity isacquiring a client, a lot of
these clients are S-Corps right,a lot of people set up as
S-Corps.
They typically are buying thestock of the corporation and I
always see in our M&A deals thatthey are like an F-Re or the
(20:01):
private equity group has to dosomething called an F-Re
organization, so we'recompletely unknown to the seller
.
So maybe you can explain whydoes a private equity have to
what is an F-Re organization andwhy does the private equity
have to what is an freorganization and why does the
private equity group the thepurchaser?
Speaker 3 (20:19):
there is a reorganization when you have an
s corporation.
Generally, you need toreorganize the company in order
to go ahead and if the equity isbeing bought to stock, you want
to make it an asset purchasefor tax purposes.
That's one of the reasons youdo it.
Secondly, there is somedeferred compensation benefits
that you get.
(20:39):
If you do an F?
Reorg and the buyer, the seller, for instance, is going to take
rollover equity in the newentity that's being formed.
if you do an F reorg thatrollover equity will only be
taxed at the time that thatequity is sold, not at the time
of the closing when that equityis acquired.
(21:02):
So there's tax benefits to thisA good amount of this is tax
driven as well, because you know, we want the sellers to get
capital gains, the buyer wantsto treat it as an asset sale so
they can depreciate the assets.
They want to get a step up inbasis.
So there's a number ofdifferent things that are going
on.
So we're always dealing withCPAs and tax attorneys and
(21:25):
trying to structure thetransaction that's most
efficient and tax effective forboth parties.
Speaker 2 (21:32):
Perfect.
Are they utilizing the 338H taxadvantage?
Speaker 3 (21:41):
Yeah, usually when you do an F reorg you don't need
to use a 338.
You can use a 338.
Generally we do on smallerdeals and this is a section of
the tax code which allows you totreat an equity purchase as an
asset purchase for tax purposesnot the liability purposes of
(22:01):
the tax purposes.
But when you want the fullbenefits of deferring the
rollover equity and other taxadvantages and you're dealing
with an S-corp, that's whenyou're going to do an FOE
organization.
Speaker 2 (22:15):
Perfect, perfect.
So a lot of times the businessowners are getting offered the
rollover equity and we had thatscenario with our roofing deal
that you were championing to theclosing table.
So there's preferred stock andcommon stock and maybe you can
explain to the closing table soyou know there's preferred stock
and common stock and maybe youcan explain to the business
(22:38):
owner why, if you're doing somerollover equity and you're
getting common stock, that's ared flag for you.
Maybe you can explain to thepeople listening why you should
not be taking common stock andwhy should it be preferred.
Speaker 3 (22:57):
Well, it really depends.
I think what you want to do isif you're going to take stock or
membership interest in a newlyformed entity by the buyer.
So, for instance, let's say wehave a deal where it's going to
be 20% of the equity in thebuyer is going to be contributed
to rollover stock of the seller.
Therefore, the seller really isputting in 20% of the equity
(23:21):
and the buyer is putting in 80%of the equity.
The debt shouldn't be includedwhen you're determining the
percentages of ownership, onlythe equity, because both the 80%
owner and the 20% owner, thecompany is going to be
responsible for that debt.
It's going to have to be paidout of the future% owner and the
20% owner the company is goingto be responsible for that debt.
It's going to have to be paidout of the future cash proceeds
of the company, so it shouldn'tbe credited to the buyer.
So you look at that and theequity.
(23:44):
If the client is going to take20% of the equity in the newly
formed buying entity, they wantit to be of the same class.
Okay, that the buyer is gettingtheir 80%.
In other words, they don't wantto have the buyer get
preferential distributions.
They don't want the buyer toget excess management fees up
front.
They want to have 20% of theprofit distributions and 20% of
(24:10):
the distributions upon what wecall a liquidity event once the
buying entity is sold.
So we want it to upon what wecall a liquidity event once the
buying entity is sold.
So we want it to be what wecall Paris-Pisou, which means
each party has the same rightsand liabilities under the
operating agreement or under theshareholder agreement.
So that's important, becauserollover equity, if it's
(24:33):
subordinate, if the other partyhas priorities or preferences,
that's going to affect not onlythe distributions during the
life of that buying entity butalso what may happen upon a
liquidity event of that buyingentity.
Mm-hmm.
Speaker 2 (24:51):
Thank you.
Speaker 3 (24:51):
Yeah.
Speaker 2 (24:53):
If you're not getting the right legal advice, you
could be in a, in a, in a commonstock ownership and and the
private equity group has thepreferred and and so yeah, like
you mentioned, they're takingdividends, they're taking
management expenses.
That could be something thatwould be a surprise to the uh,
(25:16):
to the business owner who rolledover equity.
So it's important, obviously,to have the right uh legal team
and the right advisor thatunderstands that, that they can
coach you through that uh.
Now, a lot of, a lot ofbusiness owners do not expect a
background check, right, they,you know they're checking out
the private equity group.
They're, you know, they'rereally concerned about you know
(25:39):
their abouts.
But there are background checksdone on the business owner and
which is very common.
So so have you.
How do you?
How do you comfort a seller?
That you know obviously it'spart of my job, but I'm sure
you're involved in it too, soyou know it's a standard
procedure, but has there been ascenario where you had a seller
(26:02):
didn't want to do that?
Speaker 3 (26:04):
Well, if that's an area where you know, of course,
the clients have said there'snothing, that I always ask is
there anything that's going tocome up on the background?
Check that?
Uh, because let's assume thebuyer finds out everything.
Okay, so there are no secretsand these m a transactions, it's
it's very difficult to hideanything and you don't want to
(26:26):
hide anything.
This is going to come backlater on and cost you a lot of
money, uh, so you got to beforthright.
So if there's any informationthat is concerning, okay, let's
know what it is, let's talk tothe buyer beforehand, let's
frame it in a certain way, let'ssee how we can deal with it or
at least explain it, becausewhen things come up later on and
(26:52):
they haven't been disclosed,there's either two things about
it.
Number one, that feeling thatthe seller has not been honest
or the seller is not smartenough to really know that
there's a problem.
Neither one is good, okay.
So we want to deal with theseup front and I've had situations
, probably like you, russ, whereyou know a client says
everything's fine and then weget a report back with 20 items,
(27:14):
20 items, 20 items.
How could all this be fine?
Well, this happened 15 yearsago.
This happened 12 years ago.
This, I thought, was taken careof.
This I didn't think was a bigdeal.
You know all kinds of excuses,so you know this kind of thing
does happen and in that one dealit caused significant problems
because all of this wasunexpected.
(27:35):
Yes, some of it was not all.
In that one deal, it causedsignificant problems because all
of this was unexpected.
Yes, some of it was not allthat relevant, some of it was
very old, but some of it wasn't,and none of it was disclosed
and that was part of the problem.
And so we've seen this beforeand sometimes, listen, something
happened a long time ago.
We do forget sometimes, youknow, or we think it's been
(27:55):
expunged from the record andnobody's going to find it, that
sort of thing, or you know ithappened so long ago.
It was another part of my life.
It wasn't important.
I'm not that person anymore.
Whatever it is so, but we needto know about it.
Speaker 2 (28:10):
Know not about it.
Speaker 3 (28:10):
full disclosure Based on it that we can.
Speaker 2 (28:14):
I agree, I agree and I think if the advisor sets the
expectation early on talking tothe seller that they're going to
have that background check,then maybe you know, maybe as
the advisor, I could, you know,find out if there are skeletons
in the closet.
One of the biggest challengesin our world, our world, in your
world, is this networkingcapital shows up on the loi uh.
(28:39):
It shows uh.
Shows up in the in the qualityof earnings uh.
It shows up in the in thepurchase agreement.
It's done as a calculationtowards the closing and it's
calculated towards the closingand it's calculated 90 days
after closing.
So probably one of the biggestdifferences you know from an M&A
(28:59):
M&A deal compared to selling asmaller business is the
networking capital.
So have you run into asituation where you're working
with a seller and they had noclue about the networking
capital?
That's kind of the one of the,it's like a game stopper.
So networking capitaladjustment is vital to the
(29:23):
success of the M&A deal.
So have you had some goodexperiences or you had some
crazy experiences?
Speaker 3 (29:32):
Well, I think one of the things when an LOI comes in
and before it's signed, we needto describe all these different
aspects to the seller.
What is indemnification?
What do they mean by this?
What is 12 months?
What is this?
What is a fundamentalrepresentation?
(29:52):
What is a non-fundamentalrepresentation?
Because they're treateddifferently in terms of the time
of the escrow and how muchmoney can be claimed and so
forth.
So there's a lot of uh detailsthat go on, uh.
But working capital isimportant because in an m a
transaction, the buyer is buyinga company and they expect it to
(30:13):
be able to cash flow on day one.
In other words, they're buying abusiness and they don't want to
have to put working capital in.
That's different than a smallermain street transaction where
the buyer if they're getting anSBA- loan they're going to get a
working capital line of creditand that type of thing.
So how you calculate the workingcapital, we try to put a
formula into the LOI andgenerally it's something like
(30:36):
you know you take the balancesheet of the company for the
last 12 months.
You take current assets minuscash, minus current liabilities,
and that's your working capitalrequirements.
It's the average of the last 12months and that's what needs to
be left in the business andgiven to the buyer at close.
Typically that's.
But how that's calculated issometime in question.
(30:58):
And I tell clients that youknow, if you have a good CPA,
have your CPA calculated first.
Give them our number, becausethey're going to have a large
CPA from the buyer and they'regoing to come up with a number
that many times is higher thanwhat it should be, and that's
something that we negotiate.
We bring in our own experts, weget our clients' accountants and
(31:19):
sometimes we end up pushingback on that.
Business may be seasonal, therevenue may be increasing or
decreasing.
We have to specifically look atthe time of the measurement of
the 12-month period.
So there's a lot of differentvariables that come into play.
But you don't want to justaccept the buyers number for
(31:41):
what is working capital?
This is something that needs tobe calculated independently by
the client, the seller, and ifthere is a disconnect, then we
need to negotiate that.
So many times there is anegotiation to figure out a
working capital number that issatisfactory to both parties.
Speaker 2 (31:59):
Yeah, very well explained.
I'm a firm believer that ifyour CPA is not going to jump
into the networking capital, wehave fractional CFOs that you
and I have worked withincredible experience.
Fractional CFOs and what I tryto do is have the CFO calculated
while the LOI is beingnegotiated or prior, so they're
(32:23):
aware, and then it's calculatedagain during the quality of
earnings and then calculatedtowards the end of the deal, so
end of the acquisition, so theseller is aware of of of that
number, as that can changethroughout the six to nine
months timeframe that can taketo close on this acquisition.
(32:45):
For one of our last, theroofing company that we worked
on, the business was growingincredibly so the networking
capital was increasing as theacquisition was happening and we
had a major negotiation as theprivate equity group was like $5
million off on the networkingcapital, which created an
(33:07):
incredible challenge and we were, you know, between Mark and the
fractional CFO and we were ableto work it out and it was just
a balance sheet item.
That was an issue.
So networking capital is very,very important to the business
owner, to the private equitygroup, and it cannot be ignored.
It has to be handled up front.
(33:27):
So you know, I know we'rejumping around, but is there
anything in the agreement whereyou typically find challenging
to the seller?
You know we talked aboutnetworking capital, we talked
about reps and warranties.
You know we covered, we covereda lot of.
Is there something where everyM&A legal review that comes up
(33:52):
that is like a common, commonissue, where you have to go to
the seller and explain to themand and explain what is what is
normal?
Is there something that Imissed in that negotiation?
Speaker 3 (34:04):
the contract no, I think that a lot of times, when
we're looking at some of thesereps and warranties,
particularly when it comes toprivacy policies, when it comes
to, uh, onboarding employeeswith i9s, when it comes to IT,
uh, today you know privacy, youknow IP type stuff, intellectual
(34:29):
property, the systems that thecompany is running in terms of
their software and so forth very, very important and the
security that is behind thosesystems.
A lot of times you know theprivate equity and the buyers.
(34:49):
They're looking for sellers tomake representations that they
were in compliance with everypotential possible regulation
and law relating to this type ofan area.
And small companies cannot bein compliance with every
regulation and law becausethere's so many and you know
it's one thing if you're dealingwith a Fortune 500 company, but
(35:11):
our clients that are runningsmall businesses- yes they've
got processes and procedures.
Yes they do protect their data.
Yes, they do register their IP.
Yes, they do, in most cases,properly enroll their employees,
but there's a point where youhave to push back and say,
(35:32):
listen, we're not in compliancewith this law.
Ok, because either we don'tbelieve it applies to us or we
believe that our process ofprocedures, you know, safeguard
our data and do what isnecessary, and some of these
laws require actions to be takenthat are beyond the capacity of
(35:55):
our client and therefore weneed to push back and say,
listen, you know, we'll tell youthat we have proper procedures,
but we're not going to tell youthat we're compliant with all
eight of these different laws,okay, of which our client is
unfamiliar with, okay.
So part of this is language.
You know what is reasonable,what is not.
How do we give you assurancesthat we're not going to be in
(36:20):
breach?
We're not going to be sued overthe way we're handling data
privacy information, whatever itis.
We've got good firewalls, we'reprotecting all of our data, but
we're not doing it to a pointthat a Fortune 500 company would
do.
So we're always negotiatingwhat language can be acceptable
(36:41):
to our client without makingrepresentations that are either
not true or they don't knowwhether they're true or not, and
also satisfy the buyer that wehave the systems, the procedures
in place that are going toprotect the uh, the company and
their clients going forward andyou know there's another point
that is, uh, very important whenyou get the agreement and
(37:06):
you're negotiating the agreement, the private equity group is
running on GAAP accounting rightand the small business owner is
not.
Speaker 2 (37:16):
Sometimes they might have reviewed financial
statements, they might havecompiled financial statements
and all throughout the contractyou see that they want to, that
the seller's running throughgenerally accepted accounting
principles and they're nowhereclose to it.
So I noticed that it's a verycommon that the attorneys will
(37:38):
strike that out and protecttheir client.
Can you add anything to that?
Speaker 3 (37:44):
Because private equity groups are held to a very
different standard compared tothe small business that's a very
significant point because inalmost every agreement you know
they're saying that thefinancials are gap compliant and
most of the time they're not,because unless you have ordered
or reviewed financials, you'relikely not to be gap compliant.
Certainly, if you're on a cashbasis and not an accrual basis,
(38:06):
you're not going to be gapcompliant.
So what ends up happening?
We try to change the languageand say that the financial
statements are true and accurateand they've been compiled in
accordance with the pasthistorical practices of the
company.
We haven't changed anythingrecently.
They're accurate.
This is the way we've alwaysdone it.
It's consistent, based uponhistorical precedent and that
(38:30):
type of thing.
Sometimes that works, sometimesit doesn't.
Sometimes what the buyer willask for is some kind of a
schedule that shows a gapdeviation, and we do this where
we say listen, you know, this ishow we're compiling our
financial statements.
They are different than GAAP inthe following ways Recognition
(38:52):
of income, recognition ofexpenses, things of that nature.
That is okay.
But sometimes it's taken to,and we did that on a recent deal
that I closed only, uh, onlylast week.
We did that but, uh, ourposition was we'll do the
deviation, we'll work with theaccountants, we'll put it on the
(39:13):
schedule, but we're not goingto give you a special indemnity
for this.
Okay, we're not going toindemnify you if our financials
in any way, any respect, aredifferent than what they would
have been if they were GAAPcompliant.
We're not going to do that.
Okay, you know, we don't haveGAAP and we don't want an
analysis later on saying that,listen, on the GAAP, your, you
(39:35):
know, your EBITDA would havebeen X rather than Y, okay, and
we want to go ahead and bringthe suit that.
We want to go ahead and get thedifference based upon the
difference times the multiple.
We don't want to have that kindof a situation.
So a lot of it is in the detail, russell, whether they want to
list this as a special indemnityor not.
A special indemnity issomething that is not
(39:56):
specifically set forth in thebasic reps but is put forth as a
special indemnity which isgoing to be fundamental, which
therefore is going to last for along period of time and which
there probably is going to be nolimitation on the amount that
can be pursued with regard to abreach of that special indemnity
.
So you know again, details.
Speaker 2 (40:18):
Yeah, I mean, like I said, the small business owner
is nowhere near gap accountingand the private equity is, so
you got to have your M&Aattorney like Mark you know go
through that agreement andprotect you, right?
That could really backfire withthe reps and warranties you
know post-closing.
So one of the last questions Iwant to talk about is the,
(40:42):
because we've been on the call agood amount of time and I'm
sure you need to go back to work, make some money.
So the funds flow statement isa lot different than a typical
Main Street transaction.
Can you maybe explain thedifferences between what you
would typically see in a MainStreet closing statement versus
(41:02):
what a funds flow statement is?
Because it is a littledifferent, right.
Speaker 3 (41:10):
Funds flow statement is very in-depth and generally
put together by the privateequity group and it lists the
purchase price.
It lists the cash at closing.
It lists all debts that arebeing paid.
It lists all transactionexpenses.
It lists all debts that arebeing paid.
It was all transaction expenses, it was all working capital
adjustments.
It breaks things down in a veryfine way and also puts together
(41:33):
the so-called capital stack.
It talks about what money isbeing raised to buy the company
and who's that coming from.
How much is equity, how much isdebt, how much is rollover debt
, and it also talks about howthat money is being dispersed.
How much is going to thesellers, how much is going to
(41:54):
the transaction folks like youand I?
How much is being used to payoff debts?
How much is being kept in thecompany for working capital
purposes?
So there's an awful lot ofinformation.
It's very detailed.
There's spreadsheets andthere's several different tabs
on the spreadsheet that dealwith different aspects of that
(42:16):
funds flow statement.
Speaker 2 (42:18):
Yeah, great explanation.
You know.
So you know you have to puttogether a very strong team an
M&A advisor, fractional CFO, m&aattorney.
The team that you put togetherwill get you to the finish line.
And there's more team members,there's consultants, there's
(42:39):
benefits.
The CPA will get involved froma tax standpoint, of course.
The CPA will get involved froma tax standpoint, of course.
So, putting together the rightteam to work with the private
equity group Remember, theprivate equity group does it for
a living.
These are professional buyersand they have very large
(43:10):
attorney firms and accountingfirms that they're paying
hundreds of thousands of dollarsfor to get to, uh, hopefully to
a great uh finish right.
So, mark, how can, uh, how canmy viewers reach you, uh, your
website, your contact, uh, howdoes someone get, uh, you know,
reach out to you and get to knowyou a little bit better and,
hopefully, can use your services?
Speaker 3 (43:21):
you know I, I think emailing me at m solomon
s-o-l-o-m-o-n at w-s-h-l-a-wcom.
So that's m solomon at w as inwilliam s is in san h is in
harry dash, c-o-m dash, excuseme, l-a-w dot c-o-m.
(43:44):
And also, of course, they canask, they can reach out to you,
russ, and you can funnel anyquestions and if folks have
questions you know whetherthey're going to engage us or
not.
Happy to try to answer somegeneral questions for people.
You know sellers of businesses,as you mentioned.
The buyers are veryprofessional.
They have the biggest firmsworking on their behalf.
Seller has to have a good dealteam because otherwise they're
(44:06):
going to be eaten up.
You got to be able to combatsome of this and listen,
everybody is trying to get abetter deal for themselves.
So the buyer is going to try togo ahead and you know, reduce
the purchase price, reduce thecash at closing, ask for a
larger amount of working capital, ask for a larger escrow.
And you know we need to makesure that the sellers are
(44:31):
properly protected andrepresented so they can stand up
to the kind of professionalsthat the buyer team has.
And the sellers have never beenthrough this before.
The buyers are very experiencedand they understand the process
.
So you really get playing ontheir home turf and they have an
advantage.
Okay, what we're trying to dois even the playing field to
(44:53):
some degree.
Speaker 2 (44:55):
Yeah, it's a draining process.
I can tell you many sellersdon't want to go through it two
or three times.
They get drained through thisbecause you're running your
business.
And two or three times, uh they, they get drained through this
because you're running yourbusiness and working this.
You're trying to maintain thebusiness, while this m a process
that is asking for so muchinformation and volumes of
information that you got to digout from many, many years ago
(45:16):
and and it's all, it's reallyoverwhelming to the business
owner.
So the better team that you have, like having mark solomon on
your team that can explain thewhole legal side of the process
and we all work together, youput together a strong team and
get you to the finish line.
So I want to thank you forcoming on to the first podcast
(45:37):
guest.
So that's awesome and I'mlooking forward to many more
years of bringing great clientsto you and hopefully my clients
can watch this podcast and learnhow so important to have
someone like Mark Solomon onyour team, because he will go
(45:58):
the extra mile.
I've seen it in person andgreat rapport with the client.
So thank you again for comingon the podcast.
Speaker 3 (46:05):
Mark, thank you for inviting me, and it's great to
work with professionals like you, Russell.
So again very appreciative ofbeing on the program Awesome.
Speaker 2 (46:15):
So, yeah, so, thank you, thank you and we'll see you
on the next South Florida M&AAdvisors podcast.
Have a great week.
Speaker 3 (46:23):
Very good, terrific.
Have a good day, take care.
Speaker 1 (46:26):
Thanks for listening to the South Florida M&A
Advisors Podcast.
For more information, visitSouthFloridaMAcom or contact
954-646-7651.
Welcome to the South Florida M&A Advisors podcast,
your trusted M&A team.
Here's your host, Russell Cohen.
Speaker 2 (00:13):
All right, good morning.
I'm Russell Cohen, the owner ofSouth Florida M&A Advisors, and
this morning we have MarkSolomon from YSAROTA.
Mark is a M&A attorney, is mygo-to M&A attorney, so I thought
it would be great to, insteadof just Jeremy interviewing
myself, to expand the podcastand bring in guests and for my
(00:36):
clients to see my deal team andMark Solomon and I have known
each other over 20 years, so I'mso happy to have you, mark.
Thanks for joining me and, youknow, welcome to the podcast.
Speaker 3 (00:48):
Thank you, Russell.
Appreciate being on the podcast.
It's a pleasure to be here.
Speaker 2 (00:53):
Awesome, awesome and first time doing the interview,
so excuse me if not reallyexperienced that, but we're
going to give it a try.
Like I said, mark and I haveknown each other for over 20
years.
Mark has done many, manytransactions in my career and I
could tell you, incredibleattorney.
He has an incredible niche inmergers and acquisitions and
(01:15):
he's been on one of my largestdeals and I could vouch that
Mark is a great M&A attorneythat could help any of our
clients get to the closing table.
But let's learn a little bitabout Mark.
That's what we hear.
We want to see how you know,share a little bit about your
background and why you decidedto focus on mergers and
(01:38):
acquisitions.
Speaker 3 (01:38):
Yeah, Thank you, Russ .
Yeah, I've been living in SouthFlorida since I graduated from
law school in 1985.
And I came down here.
I practiced law for a few yearsand then I went into business
with a partner and got involvedin a trucking transportation
business, left the practice oflaw for about 10 years and grew
(02:00):
a small business and we sold itto a large public company in a
roll-up and I then stayed on inthe company that bought our
business and managed a divisionof this public company.
So I like to think that as abusiness attorney Russ, I've
been a small business owner,I've been through an exit
(02:21):
transaction, I've been acorporate executive and I've
been a business attorney, sohopefully I can understand the
objectives of our clients whenwe get involved in one of these
M&A transactions.
So I have a great respect forbusiness owners and enjoy the
kind of work that I'm doing.
Speaker 2 (02:40):
Thank you, mark.
The M&A process is extremelycomplex.
You're dealing with otherattorneys on the other side this
is the largest asset of abusiness owner on their balance
(03:00):
sheet and they're puttingemotional time for a business
owner.
So, as their attorney, how doyou juggle the psychological
side of it?
And while trying to move thedeal process as it goes through
the, as I say, the colonoscopyof all these?
There's a diligence list.
You know so many differentphases.
You know how do you juggle it.
(03:21):
It's tremendous pressure.
I can't imagine.
Speaker 3 (03:24):
you know, I never thought about the colonoscopy
part of it, but that is.
There is something to be saidfor that, because it's a
complete diagnostic, taking alook at every potential possible
aspect of the business andtrying to find some faults with
it.
Uh, if, uh, you know, if you'rethe buyer, uh, so, uh, a lot of
times my clients say to me youknow, I'm a professional in my
(03:48):
industry, but I don't understandthis M&A process.
I need you to educate andcommunicate with me.
So communication is reallyimportant to explain why
something is happening, why itmay be necessary for the buyer
to have this due diligence, howwe can properly respond to
requests, uh, but also justeducating on the process.
(04:09):
How does this work, uh, how dowe uh respond, how do we go
ahead and conduct ourselvesduring this process?
Speaker 2 (04:19):
so that we're going to get the kind of result that
the business owner wants youknow, a lot of times in the in
the m, you know a lot of timesin the M&A process there's a lot
of curveballs, a lot of unknownexpenses that pop up in the
deal with holdbacks andinsurances.
And are you guiding outside ofthe M&A advisor like myself,
(04:39):
where I try to be proactive Areyou kind of telling them in
advance?
You know, be on the lookout forcertain things, especially when
the contract comes in.
It lays down what's coming.
So you know from a proactivestandpoint.
Are you trying to say expectthis, this and this?
Speaker 3 (04:59):
I think a lot of it is.
A lot of times clients you know, particularly if you're selling
a business and you see apurchase price number and you
like the number.
Clients you know, particularlyif you're selling a business and
you see a purchase price numberand you like the number, but
you know, as you're suggesting,russ, what is behind that number
.
How is the purchase price goingto be allocated between cash
proceeds and non-cash proceeds?
Non-cash proceeds could be apromissory note payable over a
(05:22):
number of years.
It could be could be apromissory note payable over a
number of years.
It could be the seller takingequity what we call rollover
equity in the buyer's entity.
A portion of the purchase pricecould be based upon what we
call an earn out, which is theperformance of the business
after the closing.
So we always tell the clientyou know it's not necessarily
(05:42):
what the price is at closing howmuch of that money do you
really collect several yearsdown the road when you look back
at the deal and say whetherthis was very successful or not
so successful?
Because a lot of the money isnot going to be paid at closing,
it's going to be earned overtime and obviously the business
owner is looking to receive asmuch of those funds as possible.
Speaker 2 (06:07):
So explain in the M&A process how you know when that
you know you're getting involvedwith a client pro in the
process where you are involvedin when, then you know where you
(06:29):
, where you're not involved in,and then along the process of
that 90 to you know 90 days, sixmonths typically if we're
working with a, uh, an, m, aintermediary like yourself for
us, uh, you know you're going toget us involved, presumably
once you take the business tomarket, once you have one or
(06:50):
more LOIs, and we're going toget involved and work together
to try to put together the bestletter of intent we can for the
client and we're going tonegotiate that.
Speaker 3 (07:02):
We're going to negotiate the price.
We're going to negotiate that.
We're going to negotiate theprice.
We're going to negotiate theterms.
We're going to negotiate notonly the the financial terms but
some of the boilerplatelanguage that is in there,
because a letter of intent, eventhough it's not binding, it
really sets the precedent forwhat's going to be in the
purchase rate.
So a lot of times you have tolive for the most part with
(07:22):
what's in the letter of intentif you want to move forward with
the deal, because many times ifyou sign a letter of intent and
you want to change terms lateron, the buyer is going to say
that's not what was agreed to inthe letter of intent, I don't
want to change those terms.
You should have negotiated thatearlier on when you signed the
letter of intent.
Once the letter of intent issigned, then, as you know,
(07:42):
there's going to be a period ofdue diligence.
The buyer is going to have anexclusive period to look at all
of the records, financial,operational sales and they're
going to do a thorough vettingof every aspect of the seller's
business.
Once that is pretty muchaccomplished and they do what
(08:03):
they call a quality of earnings,where they're scrubbing the P&L
and making sure that the actualprofits of what's been
represented, they will turn afirst draft of a purchase
agreement.
That's when most of the heavylifting for the attorney occurs,
because that purchase agreementcould be 50, 60, 70 pages and
(08:25):
there's also going to be anumber of disclosure schedules
that have to be prepared by theseller and the seller's attorney
and the M&A advisor withrespect to that purchase
agreement.
So a lot of our heavy liftingcomes in when we start to get
the initial draft of thepurchase agreement.
Then we know we're on a coursetoward the closing.
Speaker 2 (08:46):
Yeah, thank you.
You know we've done quite anumber of deals together and,
you know, with success and whenwe got into that quality of
earnings, there are always thatlegal side of the quality of
earnings where you get pulled in.
And with the other, you know,the buy side, the private equity
attorneys, and there's a prettysignificant list of documents
(09:09):
that need to be provided.
You know, if you'rerepresenting, if you're helping
the seller, then there's a lotof documentation that you have
to put into the portal for thebuy side attorney to review.
So, yeah, you're instrumentalin the quality of earnings.
So the legal side is a big partof it, as there's probably many
, many different parts of thequality of earnings.
(09:32):
So maybe give an example ofmaybe a challenge that you had
on the legal side, withoutgiving names and you know where
maybe it was in the quality ofearnings or in the negotiations
that maybe that you were able toovercome and able to get the
(09:54):
M&A process continue on.
You know, because of yourskills as a M&A attorney.
Speaker 3 (10:02):
Yeah, there's a lot of issues that come up and
sometimes you know they are lotof issues that come up and
sometimes you know they arefairly standard issues that come
up in most deals and othertimes they are specific to the
seller's business Could be taxissues, could be regulatory
issues, could be litigationissues, licensing issues.
But you know, we have certainthings that we know we have to
(10:24):
deal with.
For instance, if there is somekind of an earn out, that
there's a sell, a note generallywhen these deals are put
together and they capitalize, isgoing to be the, the buyer
putting in a certain amount ofequity and they're also going to
borrow a certain amount ofmoney and they're going to have
a senior lender and any moneythat is distributed from the
company in the form of an earnout or promissory note payments
(10:48):
has to be approved by the seniorlender.
And the difficulty is is thatour client expects to receive
those monies, yet there are loancovenants and other
restrictions placed upon thebuyer in terms of paying out
those monies in accordance withthe structure set up by the
senior lender.
(11:08):
So we have to work on that.
If you recall, you and I workedon one deal.
We were able to get the buyerto put aside funds that were not
restricted by the senior lenderto pay our client monies that
were due in the future, becausewe did not want to have a
situation where, if monies wereearned and due, they would not
(11:28):
be paid because of therestrictions involved with the
senior lender.
So sometimes you can workaround those things.
But one of the things that'simportant is and we explain this
to clients is that there arecertain standard procedures that
take place in these deals.
Not to say that you can'tnegotiate, but there's certain
things.
There's always going to be aholdback of some sort, usually
(11:50):
Okay, an escrow, which is goingto secure the indemnification
obligations of the seller underthe purchase agreement.
So to say, I don't want to havean escrow or I don't want to
have this.
You know we have to work withthe client to say, listen, you
know there's a lot of potentialliability and we're doing
everything we can to avoidhaving the buyer being able to
(12:12):
claw back any funds.
But some things are standard,okay, and we negotiate the
amount, we negotiate the timethat the escrow is being held.
We negotiate a lot of things,but the business owner and I try
to explain this is standard orthis is not standard Okay, this
is not something that we want toagree to at all.
(12:33):
Or this is something that theprinciple is okay, but we need
to negotiate the specific termsof this.
So, understanding what is, youknow, customary and ordinary in
these types of transactions andwhat is not, is certainly
helpful in guiding clientsthrough this process.
Speaker 2 (12:52):
You know you talked about the escrow holdback and
most business owners really arenot expecting it because they're
not in this type of environmenton a daily basis.
So I guess over the years I'vebeen doing I've been noticing
it's typically about 18 monthsand maybe 8% of the actual
(13:14):
enterprise value.
So does that kind of feel like?
Is that standard?
Speaker 3 (13:20):
That's pretty standard.
I would say, Russ, you'repretty much there, because most
private equity and other buyersthey want a full year, they want
a full audit cycle.
So sometimes we can get it downto 12 months.
Sometimes we can release acertain amount of the escrow
after 12 and release the balanceafter 18.
Generally, you're right, theescrow is going to fall
(13:43):
somewhere between 5% and 10percent of the cash portion of
the purchase price.
So those are pretty standard.
And listen, we negotiate thebest that we can.
You know.
The one thing is is that wewant to work hard and negotiate
on behalf of our clients.
I think we do a good job ofthat.
On the other hand, we don'twant to negotiate a point that
(14:04):
is typical and customary andcause that to disrupt the entire
transaction.
So we want to be smart aboutwhat we're going about
negotiating and what perhaps isnot so important.
So I'm always looking at whatis important to the client and
what is not, the stuff that isnot important.
We don't want to go out andheavily negotiate it.
(14:27):
What we want to do is we wantto pick our spots and we want to
negotiate the most importantissues.
Speaker 2 (14:33):
Now you know, going back to the escrow holdback,
there's insurance companies thatoffer reps and warranties
insurance and it seems like it'sgoing down to smaller, smaller
M&A M&A deal.
So have you had clientsactually take on the reps and
warranties on a, let's say, afive, five million plus
(14:56):
enterprise value, or it's reallyon the larger, larger
enterprise value deals that it'sreally taking advantage of the
reps and warranties and it's theway the that escrow hold back
yet eliminate the s, theholdback, and it also provides
coverage for the vast majorityof any claims.
Speaker 3 (15:15):
Now there's going to be claims that are going to be
excluded on the insurance policy.
Nobody is going to go ahead andpay insurance proceeds out if
there's a fraudulent claim Okay,so we've got to be.
But it's going to cover most ofthe representations that are
made, most of the potentialliability obligations, and it's
going to be a flat fee up frontthat's going to be paid and you
(15:39):
don't have to worry about havingmoney tied up in escrow.
Uh, it's a good thing for themost part generally.
Uh, it has been available onlyon larger transactions, but, as
you suggested, it's changing.
You know, I don't know thatyou're going to get around a
five or ten million dollar deal,but today you're seeing it on
20 25 million dollar deals,where before it would have to be
(16:01):
almost like 50 or 75 million,you know.
So it's coming down.
It's more affordable, uh, whenit can get done.
I like it because it's a verygood hedge for the business
owner.
Okay, they, uh they're going topay a.
Usually the fee is splitbetween the buyer and the seller
in terms of the premium underthe policy.
(16:21):
There is a deductible under thepolicy, but, all things
considered, uh, there's a lotless exposure, uh with regard to
indemnification obligationswhen you have the insurance,
versus putting a large amount ofmoney in escrow.
Speaker 2 (16:38):
Now there's a lot of work being done by an M&A
attorney where a seller may notrealize what's going on behind
the scenes.
When we were doing our platformdeal for that large roofer,
those disclosure schedules atthe end of the contract was
extremely daunting and very timeconsuming.
(16:59):
Can you explain to the audiencebecause it might be a seller
watching the podcast what is thedisclosure schedules?
Why is it so incrediblyoverwhelming for the seller and
for the legal side?
Speaker 3 (17:21):
Yeah, the disclosure schedules are attached to the
purchase agreement and those are.
They intertwine with thedifferent representations that
are made.
We're going to have to disclosethe financial statements, the
tax returns, any potentiallitigation.
We're going to have to disclosethe financial statements and
tax returns any potentiallitigation.
We're going to list alllicensing.
We're going to list all ownersand capitalization.
Uh, we're going to list thelargest clients.
(17:44):
We're going to list the largestvendors.
Uh, we're going to deal withany regulatory actions.
We're going to deal with any ipthat is owned, any ip that is
leased.
We're going to get into everyaspect of this business and
we're going to deal with any IPthat is owned, any IP that is
leased.
We're going to get into everyaspect of this business and
we're going to list what isowned, what has occurred, and
that is what the buyer is goingto rely upon.
(18:06):
So if something was notdisclosed that should have been
disclosed, or something wasdisclosed in an improper fashion
, was not accurate, then therecould be a basis for an
indemnification claim.
So they're very, very importantin that we're communicating all
this information through thesedisclosure schedules and if it
(18:26):
is inaccurate, if it is notcomplete, that could, under
certain circumstances give thebuyer a right to seek
indemnification.
That's what they're relyingupon in purchasing the business.
So those schedules need to becomplete, they need to be
accurate and obviously we wantto disclose what's necessary.
(18:46):
We want to limit theserepresentations and not disclose
things that we're not aware ofor we may or may not know about.
So there's a little game that'sbeing played here.
The buyer wants to broaden theinformation disclose as much as
possible.
We want to narrow it as much aspossible.
So when we go through and wenegotiate all these reps and
(19:07):
warranties, that's a lot of whatthe attorneys are spending
their time on.
Speaker 1 (19:12):
It's not the fancy stuff.
Speaker 3 (19:13):
It's not the sexy stuff about purchase agreements
and prices and payments.
It's all the legalese that goesinto what could represent an
indemnification claim.
So that's something.
Again, my job is to make surethat the client gets paid to the
best of my ability and to makesure that they retain those
(19:36):
payments and they're not subjectto being clawed back.
Speaker 2 (19:40):
Perfect.
So when a private equity isacquiring a client, a lot of
these clients are S-Corps right,a lot of people set up as
S-Corps.
They typically are buying thestock of the corporation and I
always see in our M&A deals thatthey are like an F-Re or the
(20:01):
private equity group has to dosomething called an F-Re
organization, so we'recompletely unknown to the seller
.
So maybe you can explain whydoes a private equity have to
what is an F-Re organization andwhy does the private equity
have to what is an freorganization and why does the
private equity group the thepurchaser?
Speaker 3 (20:19):
there is a reorganization when you have an
s corporation.
Generally, you need toreorganize the company in order
to go ahead and if the equity isbeing bought to stock, you want
to make it an asset purchasefor tax purposes.
That's one of the reasons youdo it.
Secondly, there is somedeferred compensation benefits
that you get.
(20:39):
If you do an F?
Reorg and the buyer, the seller, for instance, is going to take
rollover equity in the newentity that's being formed.
if you do an F reorg thatrollover equity will only be
taxed at the time that thatequity is sold, not at the time
of the closing when that equityis acquired.
(21:02):
So there's tax benefits to thisA good amount of this is tax
driven as well, because you know, we want the sellers to get
capital gains, the buyer wantsto treat it as an asset sale so
they can depreciate the assets.
They want to get a step up inbasis.
So there's a number ofdifferent things that are going
on.
So we're always dealing withCPAs and tax attorneys and
(21:25):
trying to structure thetransaction that's most
efficient and tax effective forboth parties.
Speaker 2 (21:32):
Perfect.
Are they utilizing the 338H taxadvantage?
Speaker 3 (21:41):
Yeah, usually when you do an F reorg you don't need
to use a 338.
You can use a 338.
Generally we do on smallerdeals and this is a section of
the tax code which allows you totreat an equity purchase as an
asset purchase for tax purposesnot the liability purposes of
(22:01):
the tax purposes.
But when you want the fullbenefits of deferring the
rollover equity and other taxadvantages and you're dealing
with an S-corp, that's whenyou're going to do an FOE
organization.
Speaker 2 (22:15):
Perfect, perfect.
So a lot of times the businessowners are getting offered the
rollover equity and we had thatscenario with our roofing deal
that you were championing to theclosing table.
So there's preferred stock andcommon stock and maybe you can
explain to the closing table soyou know there's preferred stock
and common stock and maybe youcan explain to the business
(22:38):
owner why, if you're doing somerollover equity and you're
getting common stock, that's ared flag for you.
Maybe you can explain to thepeople listening why you should
not be taking common stock andwhy should it be preferred.
Speaker 3 (22:57):
Well, it really depends.
I think what you want to do isif you're going to take stock or
membership interest in a newlyformed entity by the buyer.
So, for instance, let's say wehave a deal where it's going to
be 20% of the equity in thebuyer is going to be contributed
to rollover stock of the seller.
Therefore, the seller really isputting in 20% of the equity
(23:21):
and the buyer is putting in 80%of the equity.
The debt shouldn't be includedwhen you're determining the
percentages of ownership, onlythe equity, because both the 80%
owner and the 20% owner, thecompany is going to be
responsible for that debt.
It's going to have to be paidout of the future% owner and the
20% owner the company is goingto be responsible for that debt.
It's going to have to be paidout of the future cash proceeds
of the company, so it shouldn'tbe credited to the buyer.
So you look at that and theequity.
(23:44):
If the client is going to take20% of the equity in the newly
formed buying entity, they wantit to be of the same class.
Okay, that the buyer is gettingtheir 80%.
In other words, they don't wantto have the buyer get
preferential distributions.
They don't want the buyer toget excess management fees up
front.
They want to have 20% of theprofit distributions and 20% of
(24:10):
the distributions upon what wecall a liquidity event once the
buying entity is sold.
So we want it to upon what wecall a liquidity event once the
buying entity is sold.
So we want it to be what wecall Paris-Pisou, which means
each party has the same rightsand liabilities under the
operating agreement or under theshareholder agreement.
So that's important, becauserollover equity, if it's
(24:33):
subordinate, if the other partyhas priorities or preferences,
that's going to affect not onlythe distributions during the
life of that buying entity butalso what may happen upon a
liquidity event of that buyingentity.
Mm-hmm.
Speaker 2 (24:51):
Thank you.
Speaker 3 (24:51):
Yeah.
Speaker 2 (24:53):
If you're not getting the right legal advice, you
could be in a, in a, in a commonstock ownership and and the
private equity group has thepreferred and and so yeah, like
you mentioned, they're takingdividends, they're taking
management expenses.
That could be something thatwould be a surprise to the uh,
(25:16):
to the business owner who rolledover equity.
So it's important, obviously,to have the right uh legal team
and the right advisor thatunderstands that, that they can
coach you through that uh.
Now, a lot of, a lot ofbusiness owners do not expect a
background check, right, they,you know they're checking out
the private equity group.
They're, you know, they'rereally concerned about you know
(25:39):
their abouts.
But there are background checksdone on the business owner and
which is very common.
So so have you.
How do you?
How do you comfort a seller?
That you know obviously it'spart of my job, but I'm sure
you're involved in it too, soyou know it's a standard
procedure, but has there been ascenario where you had a seller
(26:02):
didn't want to do that?
Speaker 3 (26:04):
Well, if that's an area where you know, of course,
the clients have said there'snothing, that I always ask is
there anything that's going tocome up on the background?
Check that?
Uh, because let's assume thebuyer finds out everything.
Okay, so there are no secretsand these m a transactions, it's
it's very difficult to hideanything and you don't want to
(26:26):
hide anything.
This is going to come backlater on and cost you a lot of
money, uh, so you got to beforthright.
So if there's any informationthat is concerning, okay, let's
know what it is, let's talk tothe buyer beforehand, let's
frame it in a certain way, let'ssee how we can deal with it or
at least explain it, becausewhen things come up later on and
(26:52):
they haven't been disclosed,there's either two things about
it.
Number one, that feeling thatthe seller has not been honest
or the seller is not smartenough to really know that
there's a problem.
Neither one is good, okay.
So we want to deal with theseup front and I've had situations
, probably like you, russ, whereyou know a client says
everything's fine and then weget a report back with 20 items,
(27:14):
20 items, 20 items.
How could all this be fine?
Well, this happened 15 yearsago.
This happened 12 years ago.
This, I thought, was taken careof.
This I didn't think was a bigdeal.
You know all kinds of excuses,so you know this kind of thing
does happen and in that one dealit caused significant problems
because all of this wasunexpected.
(27:35):
Yes, some of it was not all.
In that one deal, it causedsignificant problems because all
of this was unexpected.
Yes, some of it was not allthat relevant, some of it was
very old, but some of it wasn't,and none of it was disclosed
and that was part of the problem.
And so we've seen this beforeand sometimes, listen, something
happened a long time ago.
We do forget sometimes, youknow, or we think it's been
(27:55):
expunged from the record andnobody's going to find it, that
sort of thing, or you know ithappened so long ago.
It was another part of my life.
It wasn't important.
I'm not that person anymore.
Whatever it is so, but we needto know about it.
Speaker 2 (28:10):
Know not about it.
Speaker 3 (28:10):
full disclosure Based on it that we can.
Speaker 2 (28:14):
I agree, I agree and I think if the advisor sets the
expectation early on talking tothe seller that they're going to
have that background check,then maybe you know, maybe as
the advisor, I could, you know,find out if there are skeletons
in the closet.
One of the biggest challengesin our world, our world, in your
world, is this networkingcapital shows up on the loi uh.
(28:39):
It shows uh.
Shows up in the in the qualityof earnings uh.
It shows up in the in thepurchase agreement.
It's done as a calculationtowards the closing and it's
calculated towards the closingand it's calculated 90 days
after closing.
So probably one of the biggestdifferences you know from an M&A
(28:59):
M&A deal compared to selling asmaller business is the
networking capital.
So have you run into asituation where you're working
with a seller and they had noclue about the networking
capital?
That's kind of the one of the,it's like a game stopper.
So networking capitaladjustment is vital to the
(29:23):
success of the M&A deal.
So have you had some goodexperiences or you had some
crazy experiences?
Speaker 3 (29:32):
Well, I think one of the things when an LOI comes in
and before it's signed, we needto describe all these different
aspects to the seller.
What is indemnification?
What do they mean by this?
What is 12 months?
What is this?
What is a fundamentalrepresentation?
(29:52):
What is a non-fundamentalrepresentation?
Because they're treateddifferently in terms of the time
of the escrow and how muchmoney can be claimed and so
forth.
So there's a lot of uh detailsthat go on, uh.
But working capital isimportant because in an m a
transaction, the buyer is buyinga company and they expect it to
(30:13):
be able to cash flow on day one.
In other words, they're buying abusiness and they don't want to
have to put working capital in.
That's different than a smallermain street transaction where
the buyer if they're getting anSBA- loan they're going to get a
working capital line of creditand that type of thing.
So how you calculate the workingcapital, we try to put a
formula into the LOI andgenerally it's something like
(30:36):
you know you take the balancesheet of the company for the
last 12 months.
You take current assets minuscash, minus current liabilities,
and that's your working capitalrequirements.
It's the average of the last 12months and that's what needs to
be left in the business andgiven to the buyer at close.
Typically that's.
But how that's calculated issometime in question.
(30:58):
And I tell clients that youknow, if you have a good CPA,
have your CPA calculated first.
Give them our number, becausethey're going to have a large
CPA from the buyer and they'regoing to come up with a number
that many times is higher thanwhat it should be, and that's
something that we negotiate.
We bring in our own experts, weget our clients' accountants and
(31:19):
sometimes we end up pushingback on that.
Business may be seasonal, therevenue may be increasing or
decreasing.
We have to specifically look atthe time of the measurement of
the 12-month period.
So there's a lot of differentvariables that come into play.
But you don't want to justaccept the buyers number for
(31:41):
what is working capital?
This is something that needs tobe calculated independently by
the client, the seller, and ifthere is a disconnect, then we
need to negotiate that.
So many times there is anegotiation to figure out a
working capital number that issatisfactory to both parties.
Speaker 2 (31:59):
Yeah, very well explained.
I'm a firm believer that ifyour CPA is not going to jump
into the networking capital, wehave fractional CFOs that you
and I have worked withincredible experience.
Fractional CFOs and what I tryto do is have the CFO calculated
while the LOI is beingnegotiated or prior, so they're
(32:23):
aware, and then it's calculatedagain during the quality of
earnings and then calculatedtowards the end of the deal, so
end of the acquisition, so theseller is aware of of of that
number, as that can changethroughout the six to nine
months timeframe that can taketo close on this acquisition.
(32:45):
For one of our last, theroofing company that we worked
on, the business was growingincredibly so the networking
capital was increasing as theacquisition was happening and we
had a major negotiation as theprivate equity group was like $5
million off on the networkingcapital, which created an
(33:07):
incredible challenge and we were, you know, between Mark and the
fractional CFO and we were ableto work it out and it was just
a balance sheet item.
That was an issue.
So networking capital is very,very important to the business
owner, to the private equitygroup, and it cannot be ignored.
It has to be handled up front.
(33:27):
So you know, I know we'rejumping around, but is there
anything in the agreement whereyou typically find challenging
to the seller?
You know we talked aboutnetworking capital, we talked
about reps and warranties.
You know we covered, we covereda lot of.
Is there something where everyM&A legal review that comes up
(33:52):
that is like a common, commonissue, where you have to go to
the seller and explain to themand and explain what is what is
normal?
Is there something that Imissed in that negotiation?
Speaker 3 (34:04):
the contract no, I think that a lot of times, when
we're looking at some of thesereps and warranties,
particularly when it comes toprivacy policies, when it comes
to, uh, onboarding employeeswith i9s, when it comes to IT,
uh, today you know privacy, youknow IP type stuff, intellectual
(34:29):
property, the systems that thecompany is running in terms of
their software and so forth very, very important and the
security that is behind thosesystems.
A lot of times you know theprivate equity and the buyers.
(34:49):
They're looking for sellers tomake representations that they
were in compliance with everypotential possible regulation
and law relating to this type ofan area.
And small companies cannot bein compliance with every
regulation and law becausethere's so many and you know
it's one thing if you're dealingwith a Fortune 500 company, but
(35:11):
our clients that are runningsmall businesses- yes they've
got processes and procedures.
Yes they do protect their data.
Yes, they do register their IP.
Yes, they do, in most cases,properly enroll their employees,
but there's a point where youhave to push back and say,
(35:32):
listen, we're not in compliancewith this law.
Ok, because either we don'tbelieve it applies to us or we
believe that our process ofprocedures, you know, safeguard
our data and do what isnecessary, and some of these
laws require actions to be takenthat are beyond the capacity of
(35:55):
our client and therefore weneed to push back and say,
listen, you know, we'll tell youthat we have proper procedures,
but we're not going to tell youthat we're compliant with all
eight of these different laws,okay, of which our client is
unfamiliar with, okay.
So part of this is language.
You know what is reasonable,what is not.
How do we give you assurancesthat we're not going to be in
(36:20):
breach?
We're not going to be sued overthe way we're handling data
privacy information, whatever itis.
We've got good firewalls, we'reprotecting all of our data, but
we're not doing it to a pointthat a Fortune 500 company would
do.
So we're always negotiatingwhat language can be acceptable
(36:41):
to our client without makingrepresentations that are either
not true or they don't knowwhether they're true or not, and
also satisfy the buyer that wehave the systems, the procedures
in place that are going toprotect the uh, the company and
their clients going forward andyou know there's another point
that is, uh, very important whenyou get the agreement and
(37:06):
you're negotiating the agreement, the private equity group is
running on GAAP accounting rightand the small business owner is
not.
Speaker 2 (37:16):
Sometimes they might have reviewed financial
statements, they might havecompiled financial statements
and all throughout the contractyou see that they want to, that
the seller's running throughgenerally accepted accounting
principles and they're nowhereclose to it.
So I noticed that it's a verycommon that the attorneys will
(37:38):
strike that out and protecttheir client.
Can you add anything to that?
Speaker 3 (37:44):
Because private equity groups are held to a very
different standard compared tothe small business that's a very
significant point because inalmost every agreement you know
they're saying that thefinancials are gap compliant and
most of the time they're not,because unless you have ordered
or reviewed financials, you'relikely not to be gap compliant.
Certainly, if you're on a cashbasis and not an accrual basis,
(38:06):
you're not going to be gapcompliant.
So what ends up happening?
We try to change the languageand say that the financial
statements are true and accurateand they've been compiled in
accordance with the pasthistorical practices of the
company.
We haven't changed anythingrecently.
They're accurate.
This is the way we've alwaysdone it.
It's consistent, based uponhistorical precedent and that
(38:30):
type of thing.
Sometimes that works, sometimesit doesn't.
Sometimes what the buyer willask for is some kind of a
schedule that shows a gapdeviation, and we do this where
we say listen, you know, this ishow we're compiling our
financial statements.
They are different than GAAP inthe following ways Recognition
(38:52):
of income, recognition ofexpenses, things of that nature.
That is okay.
But sometimes it's taken to,and we did that on a recent deal
that I closed only, uh, onlylast week.
We did that but, uh, ourposition was we'll do the
deviation, we'll work with theaccountants, we'll put it on the
(39:13):
schedule, but we're not goingto give you a special indemnity
for this.
Okay, we're not going toindemnify you if our financials
in any way, any respect, aredifferent than what they would
have been if they were GAAPcompliant.
We're not going to do that.
Okay, you know, we don't haveGAAP and we don't want an
analysis later on saying that,listen, on the GAAP, your, you
(39:35):
know, your EBITDA would havebeen X rather than Y, okay, and
we want to go ahead and bringthe suit that.
We want to go ahead and get thedifference based upon the
difference times the multiple.
We don't want to have that kindof a situation.
So a lot of it is in the detail, russell, whether they want to
list this as a special indemnityor not.
A special indemnity issomething that is not
(39:56):
specifically set forth in thebasic reps but is put forth as a
special indemnity which isgoing to be fundamental, which
therefore is going to last for along period of time and which
there probably is going to be nolimitation on the amount that
can be pursued with regard to abreach of that special indemnity
.
So you know again, details.
Speaker 2 (40:18):
Yeah, I mean, like I said, the small business owner
is nowhere near gap accountingand the private equity is, so
you got to have your M&Aattorney like Mark you know go
through that agreement andprotect you, right?
That could really backfire withthe reps and warranties you
know post-closing.
So one of the last questions Iwant to talk about is the,
(40:42):
because we've been on the call agood amount of time and I'm
sure you need to go back to work, make some money.
So the funds flow statement isa lot different than a typical
Main Street transaction.
Can you maybe explain thedifferences between what you
would typically see in a MainStreet closing statement versus
(41:02):
what a funds flow statement is?
Because it is a littledifferent, right.
Speaker 3 (41:10):
Funds flow statement is very in-depth and generally
put together by the privateequity group and it lists the
purchase price.
It lists the cash at closing.
It lists all debts that arebeing paid.
It lists all transactionexpenses.
It lists all debts that arebeing paid.
It was all transaction expenses, it was all working capital
adjustments.
It breaks things down in a veryfine way and also puts together
(41:33):
the so-called capital stack.
It talks about what money isbeing raised to buy the company
and who's that coming from.
How much is equity, how much isdebt, how much is rollover debt
, and it also talks about howthat money is being dispersed.
How much is going to thesellers, how much is going to
(41:54):
the transaction folks like youand I?
How much is being used to payoff debts?
How much is being kept in thecompany for working capital
purposes?
So there's an awful lot ofinformation.
It's very detailed.
There's spreadsheets andthere's several different tabs
on the spreadsheet that dealwith different aspects of that
(42:16):
funds flow statement.
Speaker 2 (42:18):
Yeah, great explanation.
You know.
So you know you have to puttogether a very strong team an
M&A advisor, fractional CFO, m&aattorney.
The team that you put togetherwill get you to the finish line.
And there's more team members,there's consultants, there's
(42:39):
benefits.
The CPA will get involved froma tax standpoint, of course.
The CPA will get involved froma tax standpoint, of course.
So, putting together the rightteam to work with the private
equity group Remember, theprivate equity group does it for
a living.
These are professional buyersand they have very large
(43:10):
attorney firms and accountingfirms that they're paying
hundreds of thousands of dollarsfor to get to, uh, hopefully to
a great uh finish right.
So, mark, how can, uh, how canmy viewers reach you, uh, your
website, your contact, uh, howdoes someone get, uh, you know,
reach out to you and get to knowyou a little bit better and,
hopefully, can use your services?
Speaker 3 (43:21):
you know I, I think emailing me at m solomon
s-o-l-o-m-o-n at w-s-h-l-a-wcom.
So that's m solomon at w as inwilliam s is in san h is in
harry dash, c-o-m dash, excuseme, l-a-w dot c-o-m.
(43:44):
And also, of course, they canask, they can reach out to you,
russ, and you can funnel anyquestions and if folks have
questions you know whetherthey're going to engage us or
not.
Happy to try to answer somegeneral questions for people.
You know sellers of businesses,as you mentioned.
The buyers are veryprofessional.
They have the biggest firmsworking on their behalf.
Seller has to have a good dealteam because otherwise they're
(44:06):
going to be eaten up.
You got to be able to combatsome of this and listen,
everybody is trying to get abetter deal for themselves.
So the buyer is going to try togo ahead and you know, reduce
the purchase price, reduce thecash at closing, ask for a
larger amount of working capital, ask for a larger escrow.
And you know we need to makesure that the sellers are
(44:31):
properly protected andrepresented so they can stand up
to the kind of professionalsthat the buyer team has.
And the sellers have never beenthrough this before.
The buyers are very experiencedand they understand the process
.
So you really get playing ontheir home turf and they have an
advantage.
Okay, what we're trying to dois even the playing field to
(44:53):
some degree.
Speaker 2 (44:55):
Yeah, it's a draining process.
I can tell you many sellersdon't want to go through it two
or three times.
They get drained through thisbecause you're running your
business.
And two or three times, uh they, they get drained through this
because you're running yourbusiness and working this.
You're trying to maintain thebusiness, while this m a process
that is asking for so muchinformation and volumes of
information that you got to digout from many, many years ago
(45:16):
and and it's all, it's reallyoverwhelming to the business
owner.
So the better team that you have, like having mark solomon on
your team that can explain thewhole legal side of the process
and we all work together, youput together a strong team and
get you to the finish line.
So I want to thank you forcoming on to the first podcast
(45:37):
guest.
So that's awesome and I'mlooking forward to many more
years of bringing great clientsto you and hopefully my clients
can watch this podcast and learnhow so important to have
someone like Mark Solomon onyour team, because he will go
(45:58):
the extra mile.
I've seen it in person andgreat rapport with the client.
So thank you again for comingon the podcast.
Speaker 3 (46:05):
Mark, thank you for inviting me, and it's great to
work with professionals like you, Russell.
So again very appreciative ofbeing on the program Awesome.
Speaker 2 (46:15):
So, yeah, so, thank you, thank you and we'll see you
on the next South Florida M&AAdvisors podcast.
Have a great week.
Speaker 3 (46:23):
Very good, terrific.
Have a good day, take care.
Speaker 1 (46:26):
Thanks for listening to the South Florida M&A
Advisors Podcast.
For more information, visitSouthFloridaMAcom or contact
954-646-7651.
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