Strategic M&A Advisors is an M&A advisory firm based in Ridgeland, Mississippi and Little Rock, Arkansas. The firm was ranked #3 in our Q3 2019 league tables of the top lower middle market M&A advisory firms and investment bankers. We talked to Ryan Holder and Greg Maloney, co-managing directors of the firm, about its history and focus.
What kind of clients does Strategic M&A Advisors work with?
We primarily serve the Southeast, including Mississippi, Tennessee, Louisiana, and Arkansas, as well as Texas and Alabama. We’re business brokers of deals typically ranging from $1 million to $10 million in EBITDA, though we’re currently working on two that are well in excess of that range. We are sell-side advisors and sell-side advisors only. We do a lot of work with manufacturing, heavy industrial, and energy-related businesses, but have also had a lot of experience in healthcare and financial services.
What’s one thing your clients tend to have in common?
We’ve worked really hard to be in a position where we see a lot of opportunities and are able to say no quite a bit. We’re able to choose transactions that reflect our values. One commonality among almost all our clients is that they’re a lot more concerned with the aftermath of a transaction than they are the check size. Although the check is important, of course, they’re more worried about the impact a transaction or succession plan will have on their employees and community. We’re able to help them make the best decisions for not only themselves and their families but also the families of all the employees that work for them.
How can owners ensure that they’re in a good position for a sale?
We always ask questions like: What does the customer concentration look like? What is the quality of the financial housekeeping of the business, and how well can this be communicated and demonstrated to a buyer? How dependent is the company on its president or CEO and how strong is the management team? These are all elements that determine how attractive the business will be in the marketplace. We’re also looking for the growth opportunities of the business in its market.
There are a lot of factors that affect the timing of a sale — the economy as a whole, industry trends, the health of the business, the health of the owner himself or herself. When possible, the best time to sell is when your company is healthy and growing and when the business owner is healthy and has time to transition the company to the buyer. Our highest and best use as advisors is educating the business owner on what an M&A process looks like and how they can make themselves more marketable or valuable. That way when the time is right they’re prepared. Because oftentimes you don’t get to sell your business in ideal situations, but if you have your ear to the ground, you have a better chance of finding the best time.
You mentioned advising a lot of companies within your local markets. Do the buyers also tend to be local?
The smaller the deal, the more likely that the buyer will be local. The larger the deal, the more likely that the buyer will be farther flung or even international. Our goal is to bring a wide range of interested buyers to each client so that they can cherry pick the best fit for their objectives. We work an extensive process designed to put the client in a position where they can determine what’s most important to them in a buyer.
We had a client, a very niche manufacturing company, who was convinced he knew exactly what company was going to buy him. He had five buyers in mind and he gave us their cell phone numbers and told us to call them all and get back to him with the best deal. But after we ran our own process, we had upwards of 40 potential buyers for him. Four of the top 5 were international. What this owner didn’t realize was that even though he’d been in the industry forever — even though he had to some extent created the industry — there were buyers all over the world who were interested in what he did and his product.
How do you use Axial?
Axial is always part of our process. When we bring our deals to the market, Axial is always the first place we go and we receive a very positive and healthy response from the community. The Axial network is a very important part of our ultimate value proposition to our clients and helps us find a wide variety of buyers to the table.