M&A Pros Talk About Finding Success in Today’s Environment

The 2020 Waste360 Business Leadership Forum, hosted by Comerica Bank, is designed to provide real-world advice for small to midsized environmental services companies. And, this year, it’s all happening online, on September 14.

One of the Forum’s sessions will look at “Mergers & Acquisitions in Today's Environment” with a discussion featuring these industry veterans:

Here’s a sneak peek at the discussion:

Moderator Ian Mearns, SVP, Group Manager at Comerica Bank, will kick things off by asking the panelists what they are looking for when entering a new market. Appleby talks about an overarching strategy used by his firm, which is to “control the waste stream from inception to disposal and beneficial reuse.” He elaborates on the idea of developing or acquiring “integrated geographic hubs—with a landfill or recycling facility as the spoke of the wheel—and then we can feed volume into it.”
Appleby also speaks to the importance of doing a close analysis of the competitive dynamics in any marketplace an investor might be exploring. For instance, what are the growth opportunities? What is the current pricing like? What companies currently controls the market? What is the life of existing landfills in the area?

And, ultimately, Appleby reminds the audience that, “it’s always about people — from bottom to top. We wouldn’t have a job if it weren’t for our people doing what they do, day in and day out. We exist for them, not the other way around. And we need never to forget that.”

Foster addresses the question of why people want to sell now — or not. He notes that, “there’s still a really strong macroeconomic environment and a tremendous amount of capital available to buy businesses. And aging demographics in the ownership of companies is also driving sales.” He says it could also be a busy Q4 for deal making as people are trying to get deals done by the end of the year.

The panelists go on to talk about keys to a successful integration after a purchase or acquisition. As Winters says, it boils down to two things, “organization and communication.”

A buyer needs to understand what is important to both sides and address questions in the seller’s mind like, “What does this mean to me? What does this mean to my family?”

Michalik elaborates that, “when you’re doing and going through acquisitions, you need to make sure you appropriately integrate each one before moving onto the next. The biggest challenge you can find yourself in is if you’ve acquired too fast and didn’t appropriately integrate the prior acquisition or the one before that. And then it becomes too unwieldy.”

The discussion also delves into the effects of COVID-19 on the M&A market. How is the industry valuing businesses in this environment and assessing the short- and long-term impacts of the pandemic?

Foster notes that, “buyers have been somewhat tentative over the first few months of the COVID period. But now with five or six months of results, companies seem to be more comfortable and understand the various levers they can pull to manage costs — particularly labor costs. And buyers are also understanding this better.” But, he acknowledges, it is a challenging time to properly value businesses. “We’re really digging in on revenue and probably spending more time looking at forecasts and revised budgets instead of historical information. We’re trying to understand how revenue is trending month over month; are bad debts a problem? Is something a short term or permanent impact?”

The speakers will also discuss the specifics of what they look for in any a potential acquisition; strategies to approach a potential seller — even when they do not have an intention of selling; how to choose a financial partner, especially in a challenging environment; how to prepare a company for sale and avoid common pitfalls; and more.

Ready for more insights about the state of M&A and how it affects your small or midsized company?

See this full, dynamic session at the Business Leadership Forum on September 14.

Register here.