An Expert On How To Do M&A - Peter Levitan & Co.

I’ve got to tell you… you do not just wake up one morning and know how to do M&A. There is a fine art and science (both) to getting the smartest, best and happiest deals done.

Dominic Rinaldi is Managing Director of Chicago’s Sun Acquisitions. He is an expert at crafting the best deals for buyers and sellers. That, ladies and gentlemen, is what you can learn directly from a leading M&A advisor.

I’m into the universe of M&A these days because I wrote “How To Sell An Advertising Agency. And, How To Buy One.” I wrote the book for my advertising agency world because I think, well I know from my agency leadership conversations, that many advertising agency owners and potential buyers are looking at the M&A market. It is a time for some ad folks to either sell out or use the market to acquire some well-priced assets.

There is a lot of information in the interview. That said, here is a bit on getting bank financing. It sure looks like a good time to borrow.

Peter: I’ve, I’ve bought and sold three agencies. I never borrowed money. I never went to a bank, never lived through the banking experience. What percentage of sales of your middle and lower market clients require borrowing from a bank?

Dominic: The largest, most sophisticated buyers want to borrow money because they want to put leverage on that deal. So let’s talk in the terms of a sophisticated private equity group that’s looking to make acquisitions. If they have $200 million in a fund and they’re looking to go out and make acquisitions, they don’t want to do 10 transactions with the 200 million. They want to do a hundred transactions. So they’re spreading their risk. The chances are that they are going to hit a couple of home runs and also hit a couple of doubles and triples. Whereas if they do 10 deals the odds of success really shrink. So using the money to do as many deals as possible putting bank lending on it gives them leverage to do that. And it’s today’s very low-interest rates. It makes a lot of sense.