“If you just want to focus on price, I can flip you around, turn you over, spin you around and send you out the side door and you don’t even know what happened. It’s the wrong thing to focus on. You got to look at this thing holistically.”
– Scott Mashuda
Recently, REAG co-founder Scott Mashuda had the chance to join host Jordan Rodriguez on Price Discovery | Money and Mindset.
This episode delves into the intricacies of mergers and acquisitions in the lower middle market, drawing on Scott Mashuda’s 20+ years of experience. The discussion covers common misconceptions about M&A, the importance of deal structure not just price, and the emotional aspects of selling a business. Mashuda provides valuable insights on deal structures, value maximization, and the critical role of early planning in successful business transitions.
Key Takeaways:
- M&A is a process, not an event: Understand that business transitions typically take 9-12 months or longer.
- Look beyond the headline number: Focus on deal structure, tax implications, and long-term goals rather than just the sale price.
- Start planning early: Begin thinking about exit strategies years in advance to maximize business value.
- Build a strong advisory team: Include wealth managers, tax advisors, and legal counsel alongside M&A experts.
- Understand the emotional aspects: Recognize that selling a business is not just a financial transaction but an emotional journey.
- Focus on value maximization: Shift from “exit planning” to ongoing improvements that benefit the business regardless of sale timing.
- Consider after-tax outcomes: Structure deals with an understanding of personal tax situations to optimize net proceeds.
- De-risk the business: Address potential buyer concerns proactively to improve valuation and transaction smoothness.
- Evaluate buyer fit: When considering earnouts or deferred payments, assess the acquirer’s ability to successfully run and grow the business.
- Stay informed about market trends: Leverage M&A advisors’ knowledge of current buyer preferences and industry-specific valuation factors.
Ways to listen:
Listen to the podcast on Apple Podcasts:https://podcasts.apple.com/us/podcast…
Listen to the podcast on Spotify:https://open.spotify.com/episode/2ghB…
Listen to the podcast on YouTube:https://www.youtube.com/watch?v=q-ASfD6GMgg
About Price Discovery: Money & Mindset
Price Discovery: Money & Mindset is brought to you by Wernick Spear Wealth Managers and Chagrin Valley Business Strategies. Opinions expressed by Jordan Rodriguez and guests are their own and do not represent investment advice, solicitation, or the like. For more information and resources referenced in this episode, be sure to check out the show notes.
About REAG
REAG specializes in Mergers and Acquisitions and Private Capital Market Advisory Services in the Lower Middle Market, offering expertise in mergers, acquisitions, business valuations, and strategic ownership planning with a commitment to meaningful engagement and long-term collaboration. For over two decades, REAG has helped leadership teams, private equity groups, and family offices optimize cash flow and overcome challenges to grow, maximize the value of their businesses, and successfully transfer ownership.
About Scott Mashuda
Scott Mashua is a co-founder and managing partner of REAG, a certified and award-winning lower-middle market investment bank. With over two decades of experience in mergers & acquisitions and business valuation. Scott has guided both public and private companies through sales, purchases, valuations, dissolutions, and restructurings.
As a key leader at REAG, Scott drives the firm’s growth and strategic vision, leveraging his expertise in the sale, acquisition, valuation, dissolution, and consolidation of closely held companies. His leadership has been instrumental in establishing REAG as a respected authority in the lower-middle market.
Scott’s industry influence extends beyond REAG. He serves on the Board of Directors of the M&A Source, where he has held various leadership roles including chair of the marketing committee, chair of the sponsorship committee, and chair of the conference committee. In 2023, Scott was appointed Chair of M&A Source, a testament to his contributions to the field.
Recognized for his excellence, Scott was named one of the 2013 “40 Under 40” top M&A service providers by The M&A Advisor. He remains an active member of the Cleveland Chapter of the Association for Corporate Growth, further contributing to the M&A community.
