Buying Carve-outs for Future Exits
from M&A Science
Joe Covey, a serial CEO and acquirer, and investor since 1992. Matthew Davidge, the co-owner of the NBC Affiliate WVNC (Watertown, NY) and several other stations around the country. In big companies, some business units may not perform well and might be overlooked. It can be helpful for the company to find a more suitable owner for these units. At the same time, buyers can take advantage of these opportunities to improve the businesses and maximize their potential. In this episode of the M&A Science podcast, we will explore the experiences of Josh Covey, a successful CEO, acquirer, and investor, and Matthew Davidge, co-owner of NBC Affiliate WVNC, as they buy and develop these businesses with the goal of exiting in the future. ____________________________________________________________________________ This episode is sponsored by the M&A Science Academy. If you're looking to improve your in-house training, we have corporate training plans provided. Give your team members access to the best-in-class courses, templates, and networking opportunities in the industry. Our academy was designed to lead practitioners to outdo M&A practices. It's also a great way to show your support for M&A Science. If you're interested in learning more about individual or team plans, visit this page. Episode Timestamps 00:00 Intro 06:43 Buy-side carve-out deals 10:35 Key approach to due diligence 11:52 Unbinding a company 13:51 Why carve-outs are difficult 15:41 Conversations with the right people 19:05 Key things to consider when doing a carve-out 22:58 Walking away from a deal 23:59 Considerations in the carve-out model 26:32 Challenges on the buy-side of carve-outs 27:58 You have to surround yourself 30:21 Evolving the operating model 34:37 The right time to exit 35:55 How working with an investment bank is different 37:48 Bank process vs. Proprietary deals 39:21 Key lessons 40:55 Timing 42:14 Communications 43:34 Alignment on post-close operations 45:27 Advice for first-time sellers 47:57 Negotiation considerations 49:59 Craziest thing in M&A
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