February 9, 2024 • 12 mins
Imagine clinching a deal that not only shatters records but also cements your reputation as a titan in the M&A field—that's exactly the story Russell Cohen unfolds in our latest conversation. As he returns to the South Florida M&A Advisors podcast, we get an exclusive behind-the-scenes look at his monumental $100 million deal, an 11-month saga that tested the limits of resilience and showcased what it truly takes to succeed in the high-stakes world of mergers and acquisitions.
Joining forces with co-host Jeremy Wolf, Russell gives us the inside scoop on the intricacies of the Campany Roofing sale—a narrative filled with suspenseful near-misses and triumphant recoveries. From overcoming the challenges of securing financing with a fledgling private equity group to the delicate dance of negotiations that kept the deal alive against all odds, this episode is a masterclass in perseverance and ingenuity. Tune in for a real-world tale of ambition and strategy, as Russell and his team prove that with the right mindset, even the most daunting of deals can be sealed.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the South Florida M&A Advisors podcast,
your trusted M&A team.
Here's your host, Russell Cohen.
Jeremy (00:13):
Hello, hello everyone.
Welcome back to another episodeof the South Florida M&A
Advisors podcast.
I'm your co-host, jeremy Wolfe,joined by none other than your
host, the man, the myth, thelegend.
We have Russell Cohen in thehouse.
How you doing, my man, hey?
Doing great.
So good to see you.
It's been a while since we didone of these.
So nice to be back in the seathere talking to you, learning
about what you're doing in andaround our great community, and
(00:34):
I know you have some excitingnews to share on the horizon.
You just assisted a businesswith a deal for $100 million,
which is fantastic news.
So congratulations on that,thank you.
Russell Cohen (00:47):
That was the largest sale for myself and the
company and myself and SunilChenoy were co-listers and we
were able to go through 11months of an M&A transaction and
get to the finish line.
No doubt.
Jeremy (01:06):
Well, again, congratulations on that.
May it be the first of manymore to come.
I know you had been trying to,I guess, take the business to
that next level and startworking on some of these larger
deals in the M&A space.
Clearly you're on the path tothat place now, so congrats on
that, brother.
Russell Cohen (01:24):
Yes, and that's the goal, and that's why I
formed South Florida M&A toservice South Florida business
owners with great serviceboutique M&A service, and that's
what we're trying to achievehere.
So a great start and it mightbe the largest sale I ever do,
but I'm OK with that.
(01:45):
But now we're poised for moresuccesses in 24 and 25.
Jeremy (01:53):
Wonderful, wonderful.
So let's get into it.
Why don't you tell us a littlebit about the deal I guess,
frame it and then we'll get intosome of the challenges that you
had to overcome, because, as weknow these processes, you got
it.
It's a long time to build up toa transaction like this.
I think you mentioned it waslike 11 months in the making,
right, yeah, very complicatedsale.
Russell Cohen (02:14):
So the company that sold was Campany roofing
out of West Palm Beach.
The business was sold for ahundred million.
Final down payment 80 million,with 10% roll over equity and at
10% earn out.
So there are many complications, there were many issues along
(02:34):
the way that we were able toovercome.
It died like 10, 12 times butwe were, you know, somehow, some
way.
The business was extremelystrong a great owner, great
business, great management team.
Everything came together at theend and we were, you know, on
pins and needles all the waythrough the deal.
No doubt.
Jeremy (02:56):
Yeah, it sounds like it, so is that I?
I'd imagine that for a bit atransaction that large, the time
frame on that is extended pasta smaller transaction.
Is it common in those cases fordeals to kind of Die off and
then come back that many times,10 or 11 times, or is that?
Is that more uncommon?
Russell Cohen (03:16):
You know, in general when you're selling a,
selling a business, it issomeone's largest asset,
typically on their balance sheet, so a very emotional ride.
You obviously you don't expectto have issues.
You know there's gonna beissues.
In this particular case, thisdid take longer than we thought
Because we were dealing with,you know, the buyers.
(03:37):
The private equity group wastrying to get equity, equity
investors and debt lenders andthere were specific challenges
in raising funds for thisparticular transaction.
So that's kind of the one ofthe major points that you know
basically took from started withan LOI in February and closed
(03:57):
at the end of November.
So yeah, that was one of themany challenges in the, in the,
in the, in the Journey to theclosing.
Jeremy (04:06):
I would call can you dig into that a little bit deeper
to talk about how how youovercame the the financing
challenges through the process?
Russell Cohen (04:14):
this particular buyer was a startup, private
equity.
They were a company calledbroad-wing capital and now
they're officially a privateequity group because they did
their first platform Acquisitionin the roofing industry.
So basically, what was going on?
This was a couple, a couple ofGentlemen started this private
equity group, had a greatpedigree in the private equity
(04:37):
space, so they startedbroad-wing capital.
So they had to go out to theopen market and raise funds and
get those equity investors.
So, outside of trying to find70 to 80 million dollars for
this particular you know kickoff, you know platform deal, they
were raising funds for futureadd-ons and future platforms.
(05:01):
So you know, while while theywere talking to equity investors
and debt lenders, we were alsoyou know you were seeing the
interest rates rise.
You know the Fed has beenraising rates.
Everyone's interest rates areon on, everything that affects
life has been going up.
So you know, capital raisinggets, gets challenging.
So so you know we start thisdeal in February and we're going
(05:24):
through the quality of earnings, which is kind of the
colonoscopy of the M&A deal.
Basically go through all theaccounting and many different
levels of diligence and you knowwe get, you know, pretty, we
get through it, which is great,a very complicated process, as I
said before, and what happenedwas the sellers CFO resigned in
(05:47):
July.
He had an eye disease, he wasoverwhelmed with the process and
he you know he was, you knowhad to make a decision because,
you know, he had healthcomplications.
So in the middle of our youknow, of our deal, we lose the
sellers CFO and we had to bringin a fractional CFO that take
(06:10):
over the entire Accountingdepartment of this roofing
company.
So you know, we were basicallychasing our tails on the
financials.
The Broadwind capital was tryingto raise a lot of money based
on a hockey stick growth of from21 to 22 and the 23 numbers.
(06:32):
They were talking to equityinvestors with first quarter
numbers, which is like a no-no,basically.
So it got very difficult to getthe 630 profit and loss because
that when they're raising money, they want to see how the
business is doing in the currentyear.
So we're sitting in thesummertime and they're trying to
raise money and they only havethe first quarter numbers.
(06:52):
And so by the time we finallygot the 630 numbers, we were
deep into August, heading intoSeptember, and and so that
became the challenge that wewere chasing our tail on on the
numbers, even though we weremoving along in the quality of
earnings.
The buyers had to go through200, 200 investors to finally
(07:13):
land at a few.
And so now we're sitting, youknow, and you know we're sitting
on edge the entire way.
So so, basically, it was nowsitting in September and the
equity investors and debtlenders are coming into town
interviewing the seller.
We're going for meals, they'reseeing projects, we're going on
job sites, and, and you knowthis is going on pretty
(07:35):
consistently throughout themonths of September.
And then so we, we think we'regoing to get to the finish line,
and they're telling us they'regoing to pick a particular
equity investor and they give usa support letter saying that
they have the money.
And then they said, wait aminute, we have someone else.
So another group came down andand and, once again touring them
(07:56):
around lunches, dinners andmeetings, and by the mid October
they got the support letterfrom Tree Line Capital, which
funded the you know the, theinitial upfront money for the
private equity group, and theysecured their you know their
debt lenders.
(08:16):
So you know, we're talking aboutmid to late October and we've
been running this deal sinceFebruary and you know we we fit,
you know, at the end of thattimeframe we're like, oh my god,
we, you know, we got thefunding and now we're an erased,
a close.
But while all this was going on, the sellers EBITDA, the
earnings of the company wasgrowing from 13 to $20 million.
So in 22, he made 13 and he waslike exceeding on tracking to
(08:41):
over 20 million dollars.
So now you start thinkingseller's going to reprice the
deal because now he can get 100,you can get a hundred and 20,
hundred and 40 million.
So we're like, okay, are wegoing to pull the plug on the
deal and try to go back tomarket?
Jeremy (08:56):
So many moving parts there, it's no surprise how the
deal almost fell apart a dozentimes, nearly a dozen times.
A lot of things need to goright for a deal like that to
materialize for sure.
Russell Cohen (09:08):
Yes, a lot of stars have to align and and the
the the, the, the, the, the, the, the, the, the, the, the, the,
the, the, the, the, the, the,the, the, the, the, the, the.
The seller was happy with theprice.
He did not want to go throughthe process again of re
interviewing buyers.
You know there was so muchmoney spent on attorneys, the
CFO, all the advisors that wereinvolved, from from you know, to
(09:28):
M and a advisors, sunil andmyself and his uh, uh benefits
advisor.
You know his insurance advisor.
You know the two attorneys onthe transaction.
So, yes, so it was.
It was incredible amounts ofcalls and meetings and it got
done November 30th, but it, youknow, we really weren't skiing
downhill, as I say, until weknew that we got the funding, uh
(09:51):
, so, so that, yeah, that's whatcaused the deal to go longer
than we thought, you know.
But at the end of the day,we're sitting here on, uh,
february 8th and you know we'relooking back and you look back
at what, what went wrong, andand you want to improve upon the
process, um, and and be betterfor the next deal, and and we,
(10:16):
you know we all went into theLOI thinking, you know, this
would not be as as challenging.
You know we all went, feelingeveryone's in love with each
other and you know deal fatiguegets involved in any transaction
.
It could be a small businessand a large business and that's
where you run the risk of theseller just calling, calling the
deal off.
Jeremy (10:38):
Well, congratulations again on this deal.
May may you have many, manymore to come in the future, in
the years to come.
And was there anything else youwanted to to share before we
wrap up here?
Russell Cohen (10:51):
Uh yeah so so love the opportunity.
Whoever is actually clicks onthe podcast?
Uh, it's very important thatyou prepare your business for
sale If, if I can meet with abusiness owner in advance, I can
give them the proper tips, howto be private equity ready.
Because you don't know what youdon't know and you might think
(11:16):
your books are perfect, but Icould promise you there are
things that you probably neverthought of that will happen in
transaction.
So we really got to get inearly, get the right team
together, get the books in order, make recommendations so you
don't have to go throughcraziness in the transaction
100%.
Jeremy (11:37):
Yeah, I'm learning a lot through this process and and
it's definitely important tohave a professional such as
yourself on your side throughthis process, because it is
wildly complicated for sure.
Russell Cohen (11:49):
All right, that's only a few of the.
That was only one issue, youknow, so we could probably do,
you know, five or six podcastson on the challenges, on this,
on this, on the final, uh, finalsale of this company.
So, but this is a.
This one was a good start.
Jeremy (12:04):
Good start, All right, everyone thanks for tuning in
and we will catch you all nexttime.
Everyone, take care.
Have a wonderful day.
Speaker 1 (12:13):
Thanks for listening to the South Florida M&A
advisors podcast.
For more information, visitSouth Florida MAcom 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.
Jeremy (00:13):
Hello, hello everyone.
Welcome back to another episodeof the South Florida M&A
Advisors podcast.
I'm your co-host, jeremy Wolfe,joined by none other than your
host, the man, the myth, thelegend.
We have Russell Cohen in thehouse.
How you doing, my man, hey?
Doing great.
So good to see you.
It's been a while since we didone of these.
So nice to be back in the seathere talking to you, learning
about what you're doing in andaround our great community, and
(00:34):
I know you have some excitingnews to share on the horizon.
You just assisted a businesswith a deal for $100 million,
which is fantastic news.
So congratulations on that,thank you.
Russell Cohen (00:47):
That was the largest sale for myself and the
company and myself and SunilChenoy were co-listers and we
were able to go through 11months of an M&A transaction and
get to the finish line.
No doubt.
Jeremy (01:06):
Well, again, congratulations on that.
May it be the first of manymore to come.
I know you had been trying to,I guess, take the business to
that next level and startworking on some of these larger
deals in the M&A space.
Clearly you're on the path tothat place now, so congrats on
that, brother.
Russell Cohen (01:24):
Yes, and that's the goal, and that's why I
formed South Florida M&A toservice South Florida business
owners with great serviceboutique M&A service, and that's
what we're trying to achievehere.
So a great start and it mightbe the largest sale I ever do,
but I'm OK with that.
(01:45):
But now we're poised for moresuccesses in 24 and 25.
Jeremy (01:53):
Wonderful, wonderful.
So let's get into it.
Why don't you tell us a littlebit about the deal I guess,
frame it and then we'll get intosome of the challenges that you
had to overcome, because, as weknow these processes, you got
it.
It's a long time to build up toa transaction like this.
I think you mentioned it waslike 11 months in the making,
right, yeah, very complicatedsale.
Russell Cohen (02:14):
So the company that sold was Campany roofing
out of West Palm Beach.
The business was sold for ahundred million.
Final down payment 80 million,with 10% roll over equity and at
10% earn out.
So there are many complications, there were many issues along
(02:34):
the way that we were able toovercome.
It died like 10, 12 times butwe were, you know, somehow, some
way.
The business was extremelystrong a great owner, great
business, great management team.
Everything came together at theend and we were, you know, on
pins and needles all the waythrough the deal.
No doubt.
Jeremy (02:56):
Yeah, it sounds like it, so is that I?
I'd imagine that for a bit atransaction that large, the time
frame on that is extended pasta smaller transaction.
Is it common in those cases fordeals to kind of Die off and
then come back that many times,10 or 11 times, or is that?
Is that more uncommon?
Russell Cohen (03:16):
You know, in general when you're selling a,
selling a business, it issomeone's largest asset,
typically on their balance sheet, so a very emotional ride.
You obviously you don't expectto have issues.
You know there's gonna beissues.
In this particular case, thisdid take longer than we thought
Because we were dealing with,you know, the buyers.
(03:37):
The private equity group wastrying to get equity, equity
investors and debt lenders andthere were specific challenges
in raising funds for thisparticular transaction.
So that's kind of the one ofthe major points that you know
basically took from started withan LOI in February and closed
(03:57):
at the end of November.
So yeah, that was one of themany challenges in the, in the,
in the, in the Journey to theclosing.
Jeremy (04:06):
I would call can you dig into that a little bit deeper
to talk about how how youovercame the the financing
challenges through the process?
Russell Cohen (04:14):
this particular buyer was a startup, private
equity.
They were a company calledbroad-wing capital and now
they're officially a privateequity group because they did
their first platform Acquisitionin the roofing industry.
So basically, what was going on?
This was a couple, a couple ofGentlemen started this private
equity group, had a greatpedigree in the private equity
(04:37):
space, so they startedbroad-wing capital.
So they had to go out to theopen market and raise funds and
get those equity investors.
So, outside of trying to find70 to 80 million dollars for
this particular you know kickoff, you know platform deal, they
were raising funds for futureadd-ons and future platforms.
(05:01):
So you know, while while theywere talking to equity investors
and debt lenders, we were alsoyou know you were seeing the
interest rates rise.
You know the Fed has beenraising rates.
Everyone's interest rates areon on, everything that affects
life has been going up.
So you know, capital raisinggets, gets challenging.
So so you know we start thisdeal in February and we're going
(05:24):
through the quality of earnings, which is kind of the
colonoscopy of the M&A deal.
Basically go through all theaccounting and many different
levels of diligence and you knowwe get, you know, pretty, we
get through it, which is great,a very complicated process, as I
said before, and what happenedwas the sellers CFO resigned in
(05:47):
July.
He had an eye disease, he wasoverwhelmed with the process and
he you know he was, you knowhad to make a decision because,
you know, he had healthcomplications.
So in the middle of our youknow, of our deal, we lose the
sellers CFO and we had to bringin a fractional CFO that take
(06:10):
over the entire Accountingdepartment of this roofing
company.
So you know, we were basicallychasing our tails on the
financials.
The Broadwind capital was tryingto raise a lot of money based
on a hockey stick growth of from21 to 22 and the 23 numbers.
(06:32):
They were talking to equityinvestors with first quarter
numbers, which is like a no-no,basically.
So it got very difficult to getthe 630 profit and loss because
that when they're raising money, they want to see how the
business is doing in the currentyear.
So we're sitting in thesummertime and they're trying to
raise money and they only havethe first quarter numbers.
(06:52):
And so by the time we finallygot the 630 numbers, we were
deep into August, heading intoSeptember, and and so that
became the challenge that wewere chasing our tail on on the
numbers, even though we weremoving along in the quality of
earnings.
The buyers had to go through200, 200 investors to finally
(07:13):
land at a few.
And so now we're sitting, youknow, and you know we're sitting
on edge the entire way.
So so, basically, it was nowsitting in September and the
equity investors and debtlenders are coming into town
interviewing the seller.
We're going for meals, they'reseeing projects, we're going on
job sites, and, and you knowthis is going on pretty
(07:35):
consistently throughout themonths of September.
And then so we, we think we'regoing to get to the finish line,
and they're telling us they'regoing to pick a particular
equity investor and they give usa support letter saying that
they have the money.
And then they said, wait aminute, we have someone else.
So another group came down andand and, once again touring them
(07:56):
around lunches, dinners andmeetings, and by the mid October
they got the support letterfrom Tree Line Capital, which
funded the you know the, theinitial upfront money for the
private equity group, and theysecured their you know their
debt lenders.
(08:16):
So you know, we're talking aboutmid to late October and we've
been running this deal sinceFebruary and you know we we fit,
you know, at the end of thattimeframe we're like, oh my god,
we, you know, we got thefunding and now we're an erased,
a close.
But while all this was going on, the sellers EBITDA, the
earnings of the company wasgrowing from 13 to $20 million.
So in 22, he made 13 and he waslike exceeding on tracking to
(08:41):
over 20 million dollars.
So now you start thinkingseller's going to reprice the
deal because now he can get 100,you can get a hundred and 20,
hundred and 40 million.
So we're like, okay, are wegoing to pull the plug on the
deal and try to go back tomarket?
Jeremy (08:56):
So many moving parts there, it's no surprise how the
deal almost fell apart a dozentimes, nearly a dozen times.
A lot of things need to goright for a deal like that to
materialize for sure.
Russell Cohen (09:08):
Yes, a lot of stars have to align and and the
the the, the, the, the, the, the, the, the, the, the, the, the,
the, the, the, the, the, the,the, the, the, the, the, the.
The seller was happy with theprice.
He did not want to go throughthe process again of re
interviewing buyers.
You know there was so muchmoney spent on attorneys, the
CFO, all the advisors that wereinvolved, from from you know, to
(09:28):
M and a advisors, sunil andmyself and his uh, uh benefits
advisor.
You know his insurance advisor.
You know the two attorneys onthe transaction.
So, yes, so it was.
It was incredible amounts ofcalls and meetings and it got
done November 30th, but it, youknow, we really weren't skiing
downhill, as I say, until weknew that we got the funding, uh
(09:51):
, so, so that, yeah, that's whatcaused the deal to go longer
than we thought, you know.
But at the end of the day,we're sitting here on, uh,
february 8th and you know we'relooking back and you look back
at what, what went wrong, andand you want to improve upon the
process, um, and and be betterfor the next deal, and and we,
(10:16):
you know we all went into theLOI thinking, you know, this
would not be as as challenging.
You know we all went, feelingeveryone's in love with each
other and you know deal fatiguegets involved in any transaction
.
It could be a small businessand a large business and that's
where you run the risk of theseller just calling, calling the
deal off.
Jeremy (10:38):
Well, congratulations again on this deal.
May may you have many, manymore to come in the future, in
the years to come.
And was there anything else youwanted to to share before we
wrap up here?
Russell Cohen (10:51):
Uh yeah so so love the opportunity.
Whoever is actually clicks onthe podcast?
Uh, it's very important thatyou prepare your business for
sale If, if I can meet with abusiness owner in advance, I can
give them the proper tips, howto be private equity ready.
Because you don't know what youdon't know and you might think
(11:16):
your books are perfect, but Icould promise you there are
things that you probably neverthought of that will happen in
transaction.
So we really got to get inearly, get the right team
together, get the books in order, make recommendations so you
don't have to go throughcraziness in the transaction
100%.
Jeremy (11:37):
Yeah, I'm learning a lot through this process and and
it's definitely important tohave a professional such as
yourself on your side throughthis process, because it is
wildly complicated for sure.
Russell Cohen (11:49):
All right, that's only a few of the.
That was only one issue, youknow, so we could probably do,
you know, five or six podcastson on the challenges, on this,
on this, on the final, uh, finalsale of this company.
So, but this is a.
This one was a good start.
Jeremy (12:04):
Good start, All right, everyone thanks for tuning in
and we will catch you all nexttime.
Everyone, take care.
Have a wonderful day.
Speaker 1 (12:13):
Thanks for listening to the South Florida M&A
advisors podcast.
For more information, visitSouth Florida MAcom or contact
954-646-7651.
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