4 | Acquisition International M&A Awards 2023 Best Lower-Middle Market M&A Advisory 2023 - Western USA o begin, Michael Wildeveld gives us further insight into Veld Mergers & Acquisitions’ background, with his words speaking volumes in terms of the reasons for its success: “Rather than beginning as deal makers in private equity or with Wall Street type of investment banks, we began with the smaller, more challenging deals that tend to have a lot more moving parts and clients with varying levels of financial sophistication.” He continues, “Believe it or not, the more ‘upmarket’ a company is, the easier preparing it and its owner to go to market tends to be. Larger businesses have a far greater buyer pool, and access to talent and capital are no longer an issue. A transaction becomes a bit more academic – it essentially boils down to valuation and deal structure. The stakeholders tend to be dispassionate, so they are far more rational and predictable. When working with founders and their businesses in the lower middle market or even on Main Street, you can sometimes throw logic out the window. Companies in these markets are the owners’ babies, and all parties better be prepared to treat them as such if they want to transact.” Veld Mergers & Acquisitions’ client base isn’t comprised of buttoned-up blue-chip businesses. It’s made up of founder or family operated companies that have persevered for decades to achieve a remarkable level of success despite their humble beginnings and substantial market forces working against them. Demonstrating the variety of sell-side engagements Veld Mergers & Acquisitions takes on, Michael informs us, “This month, I’ve been focused on keeping three very different deals moving towards the finish line. The first is a 45-year-old retail furnishings chain located in four states in the mid-Atlantic region. Despite the challenges retail has faced in large urban areas, we’ve managed to attract a variety of competing private equity bidders. Each buy-side team has been led by partners that are the chain’s longstanding clients. Rather than focusing on the bottom-line, the seller chose to work with the buyer that most reminded her of herself, as she felt they would maintain the family-like culture she’s created. “In a second instance, we are entertaining offers on a global beauty care brand. The two founders left corporate America (one hailed from Big 5 Accounting while the other came from Big Beauty). These partners felt they could better service their luxury-oriented skincare customers with a unique model and disruptive sales channel. They used their nimble size to their advantage against the majors with coveted retail shelf space. They now outcompete them in their niche and have generated over $70 million in revenues annually on three continents.” The last example involves a specialty contractor that Veld Mergers & Acquisitions has an established relationship with, as Veld sold him a ‘trophy’ business a decade ago, and has since sold it for him. This client left high school in the 10th grade to drive dump trucks and operate tractors for his father. As a specialty operator, he became an industry celebrity due to his well-honed skillset and ability to size up the most efficient way to complete a job. After working for the industry majors, he went out on his own with a vision to capitalize on his experience to tackle a broader market segment than competitors could. It turned out that literally spending his formative years “in the trenches” allowed him to recognize opportunities that publicly traded competitors miss, since their leaders were never operators. The company is set to surpass $50 million in revenue this year with an incredible margin at twice the industry average. While Veld Mergers & Acquisitions is already in discussions with industry leaders, including his former employer, this client was just awarded a $250M government contract over five years. To fully capitalize on this, they now need growth capital more than ever. Despite being in the midst of negotiations, their market position and valuation has dramatically changed so all parties will adapt accordingly. “These stories differ but also remain the same,” Michael says. “Each is a Cinderella story about founders with vision and the necessary grit to realize it. None of them are MBAs and none of these are glamourous tech start-ups. Each made it without access to capital, or guidance from their board of directors, let alone private equity partners. We are honoured to be entrusted to see the results of their decades of toil through to their next chapter. In these instances, it feels like we are managing their legacy as much as we are their transaction.” Exit On Your Terms Course To help owners gain clarity on their transition options and to better prepare them and their companies to potentially transact, Veld Mergers & Acquisitions launched “Exit On Your Terms” in 2023. The comprehensive course touches on business valuation, personal readiness, business planning, tax strategy, value maximization, and legacy planning. It is geared towards owners who are 1-5 years away from going to market, but want to approach a merger, sale, or even an internal transition prepared and well-informed. Rather than being academic in nature, a participant (which isn’t necessarily a Veld Mergers & Acquisitions client) can take the course at their own pace. They can participate publicly and leverage the experience of other participants, or they can opt to not share their identity. In fact, there are “Do It Yourself”, “Done With You” (most popular) and even “Done For You” options available. In Michael’s words, the course was created “to reach a larger number of comparably sized business owners earlier in their decision process.” He elaborates, “We’ve incorporated the lessons we’ve learned in orchestrating over 1,000 transactions in 20+ years so that owners who are contemplating a transition – whether that be a sale, recapitalization, succession event, or sometimes to achieve growth prior to selling – can not only learn from our experiences, but also from the course contributors from the financial, wealth, insurance, tax, legal, estate planning and other advisory industries. “We are able to provide owners a broad overview of business valuation, exit planning, and mergers and acquisitions concepts in a non-charged atmosphere. Neither ourselves nor the vetted Growing out of a Business Consulting and Valuations, and later a Main Street Business Brokerage firm that began in 2002, Veld Mergers & Acquisitions has become a beacon of light within its industry. Here we learn more from its Director, Michael Wildeveld, as the business wins its title in the M and A Awards 2023. T
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