CORPORATE GROWTH & M&A
ACG Cleveland: Driving opportunity, one connection at a time
By Beth Haas
The start of a new year is always energizing! After the year-end sprint to close the deal, close the books or simply close up shop to enjoy some downtime with friends and family, it feels great to start working on a fresh set of goals. If those 2025 goals include expanding your professional network, finding new business opportunities or building genuine friendships, there is no better place to start than ACG Cleveland. Our 500 members represent a diverse array of firms throughout Northeast Ohio, and include investors, lenders, corporate leaders and many of the region’s top professional advisers in areas such as investment banking, accounting, law, insurance and wealth management.
Thanks to our vibrant board and committee members, we offer more than 25 events per year, ranging from large-scale networking events such as the Summer Social at the Shoreby Club to smaller contentfocused events and informal member meet-ups. Our mission of connecting, educating and supporting deal makers at all stages of their careers
underpins our programming.
Nothing highlights this better than two signature events being held this month. Our 28th annual Deal Makers Award event honors regional firms and individuals for notable transactions or inspiring professional legacies. These awards represent the culmination of years of work and the support of many of our exceptional Cleveland-based professional service providers. At the other end of the spectrum, January is also when we hold the annual ACG Cup. This case competition enables Ohio-based college students to explore the world of investment banking and private equity with the support of ACG mentors before making their best “pitch” to a panel of local deal experts. In recent years, an attendant career fair has led to successful placements for internships at several of our member firms.
For those in between seeking their first job and reflecting on the
highlights of a long career, we offer numerous ways to build valuable connections in highly accessible ways. For instance, the Women in Transactions (WiT) network’s summer golf series welcomes female golfers of all abilities to hone their skills and comfort level on the course. Other specialized networks focus on the Akron region, young professionals and corporate development professionals, offering engaging content to appeal to specific members of our community.
My ACG membership has been a key factor in my own professional development, and it has been a joy to lead the chapter this year. Join us for an event in 2025, and you’ll be reminded of just how many talented deal makers we have here in Northeast Ohio. I can promise you’ll have some fun as well!
Beth Haas is a partner at Cyprium Partners, a private equity firm focused on non-controlling investments in family- and founder-owned businesses. Reach her at 216-906-1347 or bhaas@ cyprium.com.
Contents
S2 Key considerations for family offices before acquisitions
S3 Crafting the optimal tech stack for private equity marketing
S4 Advice on how to compete in the competitive M&A marketplace
S5 M&A private equity and deal flow outlook for 2025
S6 “Best” deal structure to minimize taxes for private company sale
S7 Key legal issues impacting private equity transactions
S8 Avoid distress: These failures are not an option
S9 Mastering net working capital: Key factors that shape the deal
S10 A legal perspective on the art of the Letter of Intent
S11 I want to sell my business. How do I prepare, and where do I start?
S12 Top five concerns in M&A in 2025: What buyers need to know
S13 How to handle private equity interest in your business
S14 Timing the exit process
S15 Preparation is the cornerstone to a successful exit
S16 2025 M&A boom: Key sectors primed for enhanced growth
S17 Real estate valuation challenges in M&A deals
S17 What’s next — planning for business succession
S18 Key considerations in raising debt or equity capital
S18 ESOPs:The business succession solution
S19 Northeast Ohio’s top deal makers to be honored
S19 2024-25 Officers and Board of Directors
S19 2025 events calendar
HAAS
Key considerations for family offices before acquisitions
By Kip Irle and Warren Philipp
Following the sale of a family business, where most of their wealth was tied up in a single asset, many family offices were created to make passive investments in private equity funds and public securities. As a new generation of investment managers takes over, many now counsel a more active strategy of directly acquiring and operating individual companies, which was the original wealth driver of the family.
This significant growth in direct acquisition activity among family offices frequently leads to surprises because the buyers lack a comprehensive understanding of the risks they are acquiring along with the companies and an active plan to manage and integrate those risks into the family’s overall profile.
Risks impact results
While assets typically receive the greatest attention during due diligence for an acquisition, family offices need to examine just as closely the most pressing risks that may impact the business in the foreseeable future. How will those risks affect the family’s overall risk-bearing capacity? What will it cost to reduce those risks to a comfortable level?
Critical to any acquisition is ensuring the family office and its other assets are protected from risks associated with the new company. After all, when a family office invests with a fund manager, they may be one of dozens of passive investors, with layers of protection limiting any negative direct impacts. But when making a direct acquisition of a company they’ll operate or influence, they’re likely to face potential exposures they may not have experienced. Strategies such as D&O insurance and executive liability coverage are key elements of a protective wall between the new company and the family’s assets.
In new territory
If a family office’s existence results from having sold a previous business, there may be a danger associated with unfamiliarity, especially when a serial entrepreneur leads the family. Success in one business is rarely a guarantee they’ll do as well with another, especially
if it’s in a different industry or the family had little involvement in day-to-day operations.
In addition, as new owners of a smaller company, they may find themselves handling issues in which they lack personal experience. They may not even be familiar with the types of coverage they need or aware that having more liquid assets may make them a more attractive target for lawsuits.
Not always obvious
These issues underscore the value of working with a risk management consultant with a formal process for identifying and prioritizing the top five to eight risks that deserve the greatest time, attention and financing.
An excellent illustration involved a family office’s $300 million purchase of a noncore unit of a Fortune 500 company. An analysis revealed high-value risks that weren’t insured adequately. This arose from the differences in risk, culture and appetite inherent in the larger, more complex corporate entity. It created unhealthy financial risk for the family office that would manifest as a P&L impact from single or multiple losses that the larger seller considered a cost of doing business and inconsequential. One of the key examples involved the quality of receivables being acquired, which were
subsequently credit-enhanced through the use of trade credit insurance.
Engineering the balance sheet
Another element of the process involves what we refer to as engineering the balance sheet. Developing a postclosing plan for what the buyer wants to accomplish and how the balance sheet should look once the acquisition is complete addresses postclosing integration and cost-saving opportunities.
Risk management consultants can model both entities individually and then combine the forward-looking exposure base, unit rate averages and volatility to arrive at an actuarial forecast. They can then identify options for insurance coverage or other transfer tools to limit risks. When combined with the family’s other holdings and personal assets, this provides a unified approach to transferring risk across the enterprise.
Decapitalizing risks
Ultimately, an analysis allows family offices to consider their insurance spending in a different light. Can they increase their deductibles to take on more risk — and if so, how much can they safely absorb? Should they purchase insurance through a third-party provider? Or does forming a captive or using
another risk financing method make more sense?
These are critical questions because being able to decapitalize their insurance spend allows them to redeploy that capital into strategic projects, making risk management an investment decision rather than an expense.
Expertise matters
Insurance brokers and others associated with risk management don’t always have specialized experience assessing the unique risks facing family offices that choose to enter the acquisition marketplace. Achieving the family’s objectives depends largely on working with professionals who understand the intersection of acquisition risks and the types of coverage high-net-worth families need.
Kip Irle is senior vice president, Global Mergers & Acquisitions and Transaction Solutions leader at Hylant. Contact him at kip.irle@hylant.com. Warren Philipp is managing director of Transactional Risk at Hylant. Contact him at warren. philipp@hylant.com.
For more information, contact Hylant.com
Insuring Investments. Enhancing Returns.
What you don’t know can hurt you in small or large business transactions like mergers and acquisitions—especially when it comes to insuring risks before, during and after a transaction takes place.
That’s why Hylant offers clients the expertise of our dedicated M&A and Transaction Solutions team. Let us help you reduce the uncertainty of complex transactions, protect your investments and make the best use of your capital.
Learn more at hylant.com/mats
IRLE PHILIPP
Crafting the optimal tech stack for private equity marketing
By Brad Kostka
Having the right tech stack can be a game-changer in private equity marketing, giving firms the tools they need to raise funds, generate qualified deal flow and accelerate portfolio company growth. It allows marketers to automate repetitive tasks and streamline workflows, freeing up their time to focus on big-picture strategies and leverage data to create targeted campaigns.
These tools bring real, measurable value to private equity marketing:
CRM & marketing automation.
A CRM system is foundational to private equity marketing, serving as a hub for contact management, campaign automation and pipeline visualization.
HubSpot and Salesforce are popular for their scalable, user-friendly solutions and streamlined workflows. For private equity-specific applications, DealCloud offers tailored CRM capabilities, combining deal tracking and investor relationship insights. With these systems, firms can organize contacts, nurture leads and maintain investor relationships with data-driven strategies.
AI-generated content. AI has become integral to marketing over this past year, especially for generating content quickly and at scale. ChatGPT is an accessible and
versatile tool, aiding in the creation of reports, social media posts and thought leadership content. Claude and Perplexity offer advanced natural language capabilities, supporting marketers in producing highquality content based on industry data. By integrating AI, private equity marketers can save significant time, establish thought leadership and engage investors with targeted, high-quality information.
Email marketing. For lead nurturing and investor communications, email remains an essential channel.
MailChimp and ActiveCampaign offer user-friendly platforms with advanced segmentation and automation features, allowing marketers to send personalized messages to distinct target audiences — from investors to referral sources.
ActiveCampaign, which combines CRM functions with email marketing, also integrates well into broader marketing workflows. With these tools, firms can keep stakeholders informed, strengthen relationships and maintain visibility through consistent, targeted outreach.
Social media management
Social media platforms help private equity
marketers build thought leadership, promote portfolio companies and engage investors. Hootsuite and Sprout Social offer scheduling, engagement tracking and social listening features that simplify managing multiple channels. For firms with large social media needs, Sprinklr provides deeper audience insights and performance metrics, helping teams analyze and optimize campaigns. A strong social media presence allows firms to reach a broader audience and build brand credibility.
SEO & content marketing. To drive visibility and attract relevant traffic, private equity marketers should prioritize SEO tools. SEMrush and Ahrefs offer keyword research, backlink analysis and competitor tracking, allowing marketers to optimize content and improve search rankings. Establishing a strong approach to SEO supports a more targeted content strategy, ultimately helping firms enhance brand visibility, engage key decisionmakers and capture high-quality leads.
Project management. Project management tools are essential for coordinating complex campaigns and managing content development for private equity firms and their portfolio companies. Monday.com and Trello are intuitive platforms that allow teams to assign tasks, set deadlines and monitor progress in real time. For more advanced needs, Wrike provides additional tracking
and collaboration capabilities, enabling detailed project oversight. These tools help marketing teams stay organized and aligned, keeping campaigns on track and ensuring smooth execution.
Analytics & reporting. Analytics tools allow firms to evaluate marketing performance, measure impact and adjust strategies. Google Analytics provides indepth insights into website traffic, audience behavior and engagement trends. For those tracking customer journeys and conversions, Kissmetrics offers a granular view of user interactions across multiple touchpoints. These tools allow firms to make informed, data-driven decisions, measure ROI and refine their approach in real time.
Research & market intelligence.
Private equity marketers need up-todate market intelligence to inform decisions, track industry trends and assess competitors. PitchBook and Capital IQ are leading tools for financial data, competitor analysis and deal tracking, enabling firms to make strategic decisions. These platforms help marketers and investment teams stay competitive, position their firms as thought leaders and support portfolio management with comprehensive research capabilities.
Deal sourcing. Deal sourcing tools are crucial for firms seeking new investment opportunities. Platforms like 4Degrees
and Sourcescrub streamline the process by tracking relationships, identifying prospective investments and highlighting emerging opportunities. Deal sourcing tools allow firms to proactively search for high-potential leads and build valuable industry connections.
Building and integrating your tech stack. To maximize the value of a tech stack in practice, it’s absolutely vital to align tools with your firm’s specific needs and objectives. Start by identifying your marketing goals — whether its enhancing lead generation, improving investor engagement or boosting brand visibility — and then select tools that address those goals directly. Integration is key, so opt for platforms that work well together to avoid data silos and support streamlined workflows. Finally, ensure proper onboarding and training so your team can fully utilize each tool’s capabilities, maximizing both efficiency and ROI.
For more private equity marketing resources, visit roopco.com/pe.
Brad Kostka is president of Roopco, a strategic marketing agency with expertise in accelerating growth for private equity firms and their portfolio companies. Contact him at 216-902-3800 or bkostka@roopco.com.
GROWTH MARKETING FOR PRIVATE EQUITY
KOSTKA
Advice on how to compete in the competitive M&A marketplace
By Sydney Stroia
Prospective buyers and sellers are facing significant challenges in successfully negotiating deals in today’s M&A marketplace. The best way to minimize those challenges is by having a well-rounded and skilled deal team on both the buy-side and the sell-side. A successful deal team should consist of M&A attorneys, investment bankers, tax advisers and quality of earnings providers, along with other professionals as needed, depending on the transaction’s size and intricacy.
Establishing a sophisticated team is invaluable in managing the risks and complexities inherent to a transaction, and also gives each party an edge in the negotiation, speed, compliance and execution of these deals.
Engaging these professionals early in the deal process is key. Significant
consideration should be given to the deal type (i.e., an asset vs. stock purchase or a merger, all of which may involve different tax implications and potential risks or benefits). The parties’ deal teams can help identify the best structure for the contemplated transaction.
Structuring a deal in the most favorable way is especially beneficial to sellers, as the proper deal structure can optimize transaction value and mitigate risk. An experienced M&A attorney can also assist in negotiating the letter of intent, which outlines specific deal
terms that the parties may, at times, be legally bound to. If the parties cannot agree on the terms in the LOI, the deal will not move forward. In M&A deals, there are several standard practices and terms that are typically considered “market” for both buyers and sellers. If an inexperienced attorney is on either side of the deal and is attempting to over-negotiate a term that is considered “market,” this can lead to frustration by the other party and can stall the negotiation process. Experienced deal teams on both sides of the transaction
Lucas Murray | Partner | M&A | Buckingham
Michael Sirpilla | CEO & Co-Founder | Society Brands
Justin Sirpilla | President & Co-Founder | Society Brands
can help prevent a potential impasse by ensuring all parties are on the same page regarding the legal, financial and strategic aspects of the transaction.
Putting together a deal team of professionals who are familiar with the typical M&A deal cadence is critical to avoid unnecessary delays in the transaction. At the outset, the parties should set a realistic closing date and set milestones for each party to achieve at different points throughout the transaction timeline. The parties should also coordinate weekly check-ins for the buy-side and sell-side deal teams to attend so the parties can ensure that these milestones are being met, while also addressing issues as they arise so a solution can quickly be identified and put into action.
Putting together a deal team of professionals who are familiar with the typical M&A deal cadence is critical to avoid unnecessary delays in the transaction.
FROM IDEA TO ENTERPRISE
“Buckingham has been a valued partner to Society Brands since our inception. I remember the day Lucas Murray came into my office to draw up the original contracts. They’ve been with us from the beginning, through thick and thin, and I’m confident they’ll continue to be there for us in the future.
Not only have they done incredible work for us, but they also truly care about the company and our success. It’s rare to find a legal team that not only provides top-notch counsel but also genuinely believes in the people and vision behind the business. We’re honored to work with Buckingham and proud to call them our trusted legal advisors.”
- Michael Sirpilla, CEO and Co-Founder of Society Brands
At Buckingham, we take pride in forging meaningful, long-term relationships. From the earliest stages of an idea to every milestone of growth, we stand by our clients with exceptional legal counsel and unwavering support.
Because when our clients succeed, so do we. bdblaw.com
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Although each deal is unique, every transaction can be generally broken down into the following phases: pretransaction, due diligence, closing and post-closing. It is vital for the deal teams to work together to drive and support the various phases in an efficient manner. Experienced M&A attorneys can often anticipate potential industry-specific issues before they arise and creatively craft solutions to address these issues and prevent delays in closing the transaction. If the chosen counsel does not specialize in M&A or is unfamiliar with the industry involved in the deal, it can be difficult to prevent and/or solve common issues that may arise during any one of the deal phases. This can quickly lead to frustration in both the buyer and the seller, as both parties typically prioritize deal speed and want to close as quickly and efficiently as possible.
With today’s ever-changing technological advancements, the more successful M&A attorneys have chosen to “levelup” their practice by incorporating new technology into their transaction management processes. Technology can help to streamline a transaction, most notably through due diligence review and assisting with the closing mechanics. For example, cloud-based transaction management software can help simplify the closing process. If buyer’s counsel prepares a closing checklist that seller’s counsel has access to on such a platform, both parties can work together to update the closing checklist with the most up-todate transaction documents in real time. This process avoids error and ensures both parties have access to and are signing the final agreed-upon documents, thereby reducing the time needed to coordinate the closing.
Many sophisticated M&A attorneys also utilize artificial intelligence to aide in due diligence review by using AI
STROIA
contract review software. This software enables attorneys to more efficiently review contracts and better identify issues that may be material. Working with a legal team that has a reputation of streamlining diligence review and achieving a seamless closing process is not only appealing to sellers but can also benefit strategic buyers by helping them to close deals at a quicker pace, allowing them to more efficiently shift focus and target other potential deals in this competitive space.
Choosing a skilled team of professionals is one of the most important decisions that buyers and sellers make during a transaction. A knowledgeable deal team can have a positive effect on the transaction outcome on both sides, and ultimately can help successfully negotiate and close a deal in today’s competitive marketplace. As such, it is vital that this decision is given proper attention and be made as early as possible in the deal process.
M&A private equity and deal flow outlook for 2025
By Andrew Petryk
A year in review 2024 started as a “wait and see” market as it began its recovery from a slump in 2023, when total deal value came in at the $3 trillion mark, a 15.8% decrease from 2022, according to Pitchbook. The first half of 2024 was softer than expected due to elevated interest rates, inflationary concerns and geopolitical risks, among others. Interest rates in particular impacted buyers’ willingness to borrow and the availability of debt, resulting in pressure on valuations.
The weight of a threatening recession loomed large throughout much of 2024, yet the U.S. defied the alarm and sustained solid growth. Total global M&A deal value, encompassing buyers of all types, tracked 27.6% ahead, and deal count was up 13.3% year over year, according to Pitchbook’s Q3 2024 Global M&A report.
warehouse network and delivery fleet to better serve its “pro customers,” such as professional builders and contractors, to drive sales.
Large private equity firms also participated in the deployment of megadeal investments. Apollo Global Management Inc. agreed to buy a 49% stake in a joint venture related to Intel Corp.’s factory in Ireland for $11.23 billion, while KKR & Co. Inc. and The Carlyle Group Inc. agreed to buy about $10.1 billion of prime student loans from Discover Financial Services, according to S&P Global.
of uncommitted capital at the end of the first half of 2024. Perhaps more importantly, PE firms have held a surplus of assets longer than they anticipated, and many of those firms will need to sell those assets to return funds to their investors.
Outlook
Sydney Stroia is an associate attorney at Buckingham. Contact Sydney at 330-491-5213 or SStroia@bdblaw.com.
While corporate-led M&A came out of the gates early in the year, private equity activity lagged as investors looked for signs that the operational improvements of 2023 were sustainable and that capital markets supported deal activity. The Federal Reserve’s decision to lower interest rates by 50 basis points in September and 25 basis points in November — the first rate cuts in four years — served as a much-needed jolt to the M&A markets. The presidential election sorted out concerns about increased taxes and energy policy but also raised questions about potential tariffs and their impact on the overall U.S. economy and M&A activity. We believe the election results will have a favorable impact on M&A.
Megadeals fueling corporate confidence
A string of megadeals in the first half of 2024 reflected resilience within the M&A space as well as growing corporate confidence and strengthening balance sheets. Megadeals targeted companies across a range of sectors, including Consumer and Technology. Mars acquired Kellanova, a global manufacturer of snack and packaged foods, including brands like Pringles, Cheez-It, Pop-Tarts and Eggo, for $35.9 billion. Verizon acquired Frontier Communications, the largest pure-play fiber provider in the U.S., for $20 billion. In its largest acquisition ever, Home Depot announced in March that it acquired building materials supplier SRS Distribution in an $18.25 billion deal. The deal will help Home Depot leverage SRS’
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Head of Industrials
216.920.6613
apetryk@bglco.com
Learn more at bglco.com.
Private equity (PE)
Data suggests that private equity deal activity is emerging from a two-year slump that began in 2023, improving the odds that dry powder will be deployed. Private equity has reemerged hungry for new investments with support from lenders showing an increased willingness to fund acquisitions. PE investors continue to place a greater emphasis on operational improvements and add-on acquisitions rather than solely relying on financial leverage to generate returns. Chances for firms to chip away at the mountain of dry powder are improving. According to S&P Global, the PE firms with the largest amount of dry powder collectively reported $556.19 billion
As companies seek acquisitions to expand their product portfolios and service offerings and enter new markets, M&A becomes a key avenue to achieve those goals. Sectors such as Aerospace & Defense, General Industrials, Technology, Digital Infrastructure, Building Products, Environmental and Industrial Services are all poised for strong showing in M&A in 2025. The groundwork laid in 2024 offers promising signs of steadier growth and more consistent deal flow. We expect both strategic and private equity buyers to look for ways to aggressively deploy capital.
Andrew K. Petryk is a managing director and leads the Industrials practice at Brown Gibbons Lang & Company (BGL). Contact him at 216-920-6613 or apetryk@bglco.com.
PETRYK
“Best” deal structure to minimize taxes for private company sale
By Samantha Smudz and Robert Venables
One of the most dreaded replies from a professional services provider is, “it depends.”
Unfortunately, that’s truly the case when determining the most optimal tax structure for your transaction. There are many variables — tax and non-tax — that go into assessing whether a particular transaction structure “works.” From the sale price you’re willing to accept, to the value of your company’s tax attributes and the tax rates in effect at the time of the transaction, every scenario is inherently different.
Below are three common tax structuring options for sellers to consider. Keep in mind while these structuring options are generally available, to realize the most tax benefit there will be key nuances and distinctions you and your tax adviser will need to assess based on what type of entity you are selling.
1. Structuring your deal as an equity sale
From a seller’s perspective, a sale of equity is the holy grail of transaction structures, particularly when there is opportunity to fully or partially defer gain. Assuming you will realize a
gain, for tax purposes the biggest draw is that this structure allows you to maximize capital gain treatment, i.e., you will be taxed at a lower rate, and basis will be used to lower the taxable portion of the gain. From a non-tax perspective, structuring your deal as an equity sale is often ideal because it transfers your entity’s liabilities (known and unknown) to the buyer. Valuing and negotiating the sale of your entire company, as opposed to individual assets in an asset sale, is also generally much less cumbersome for owners to navigate.
While this structure is often ideal, it’s not always perfect. With an equity transaction you may receive a lower sale price, since buyers may feel the need to make up for fewer tax benefits as compared to benefits they would receive in an asset sale. Additionally, a buyer may request certain indemnities or protections, financial or otherwise,
for assuming all your company’s liabilities.
2. Structuring your deal as an asset sale
For some of the same reasons sellers tend to favor equity transactions, buyers tend to favor asset deals. In an asset purchase, the buyer is simply acquiring the discrete assets of the target, not the actual company, which may leave them with some undesirable assets and attributes. However, there are benefits for sellers. In an asset sale, a seller can be selective about which assets, and even strategic liabilities, it may want to retain for various reasons. An asset sale may
and the potential for a second layer of tax. Additionally, asset sales can be more complex, as they require the identification of which assets will be included in and excluded from the transaction. Asset sales also require the retitling of assets, if necessary, which can add costs to the transactions for the seller and/or buyer.
3. Structuring your deal as a legal equity/deemed asset sale
A legal equity/deemed asset sale is a transaction used to conduct an equity sale for legal purposes and an asset sale for tax purposes. From a tax perspective, the buyer typically requests this structure
From a seller’s perspective, a sale of equity is the holy grail of transaction structures, particularly when there is opportunity to fully or partially defer gain.
allow sellers to negotiate premium prices for and navigate various tax treatments of higher-value items.
On the downside, asset sales can result in higher taxes for a seller, particularly C corporations. An asset sale can lead to more items taxed at ordinary income rates than in an equity sale
to obtain stepped-up basis in the assets; from a legal perspective, this structure does not require transferring titles to assets and contracts. Generally, this structure is simpler for both parties to implement.
This structure could come at a cost to you as the seller, however, resulting in
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either two layers of tax or incrementally higher tax rates, as alluded to above in the considerations for an asset sale. Careful planning and evaluations of basis may ease this burden if a buyer can make an owner “whole” for the additional tax costs and still receive a net economic benefit due to the basis step-up the buyer will receive.
Whether a corporate or non-corporate entity, finding the right structure is key. The good news is you have choices; take the time to consider them all, holistically, to find the right fit.
Samantha Smudz, CPA, JD, is a transaction services tax partner at Cohen & Co Advisory, LLC. Reach her at 216-649-5546 or ssmudz@cohenco.com. Robert Venables is a tax partner at Cohen & Co Advisory, LLC. Reach him at 330-255-2135 or rvenables@cohenco.com.
Cohen & Co Advisory, LLC is not rendering legal, accounting or other professional advice. Information contained in this article is considered accurate as of the date of publishing. Any action taken based on information in this article should be taken only after a detailed review of the specific facts, circumstances and current law with your professional advisers.
SMUDZ
VENABLES
Key legal issues impacting private equity transactions
By Anthony J. Cox
As the devilish lawyer John Milton in the 1997 film “The Devil’s Advocate,” Al Pacino famously explained to his protégé why he chose to incarnate as an attorney: “Because the law, my boy, puts us into everything.”
Anyone who has played a role as a buyer, seller, lender or advisor on a private equity acquisition undoubtedly will agree that legal considerations impact nearly every aspect of a deal.
Experienced professionals are familiar with many important legal concepts involved in a deal, so this article homes in on a few critical legal concepts that could disrupt, delay or derail a transaction if not given proper attention from the start.
Securities regulation
As a general matter, the Securities Act of 1933 requires the registration of every issuance, offer or sale of securities with the Securities and Exchange Commission (SEC), unless an exemption from registration applies. Since registration is not practical in most private equity transactions, identifying an available exemption is important. Private placements of securities may be eligible for various exemptions from this general requirement, including those placements that are limited to “accredited investors” and otherwise meet the requirements of
Section 4(a)(2) of the Securities Act and the related “safe-harbor” in Rule 506 of Regulation D under the Securities Act. Identifying and confirming the availability of an exemption to the registration requirements is a highly fact-specific exercise that should be undertaken at the outset of a transaction. In addition to federal securities regulation, firms also should be aware that compliance with various state securities laws (or so-called “blue sky” laws), regulations and filing requirements may be necessary. The various burdens imposed by federal and state securities laws should be considered at the earliest stages of a transaction with the assistance of experienced securities counsel.
Antitrust scrutiny
Antitrust scrutiny will occur in transactions that might result in a significant reduction in market competition. Regulatory bodies, such as the U.S. Federal Trade Commission (FTC) or the European Commission, assess whether a deal could create a monopoly or harm consumer welfare. In some cases, deals may be delayed or require divestitures to meet regulatory approval.
In the acquisition context, one of the more commonly encountered regulatory hurdles concerns the requirements of the Hart-Scott-Rodino Antitrust Improvements Act, commonly referred to as “HSR,” which requires parties in certain deals to file pre-transaction notifications with the FTC and the U.S. Department of Justice (DOJ) for antitrust review. The HSR filing requirement is
investors are involved. The Committee on Foreign Investment in the United States (CFIUS) and similar agencies in other countries are regulatory bodies tasked with scrutinizing transactions that may impact critical industries, such as defense, telecommunications, energy and technology. CFIUS focuses on preventing foreign entities from gaining access to sensitive information, infrastructure or
Antitrust scrutiny will occur in transactions that might result in a significant reduction in market competition.
triggered when the transaction meets specific size thresholds, which are adjusted annually for inflation. The filing includes details on the companies involved, such as financials and market share data, allowing the FTC and DOJ to assess whether the deal could substantially reduce competition in any relevant market. Firms should consider whether HSR is likely to impact a transaction as early as possible in the process and stay aware of any changes to the enforcement environment driven by the incoming presidential administration.
National security considerations
National security concerns are increasingly important in private equity transactions, particularly when foreign
technologies that could threaten national security interests. Private equity firms must consider that cross-border deals may be subject to extensive review, including security clearances and the possible imposition of conditions on ownership or control. Transactions may also be delayed or blocked if deemed to pose significant risks. Even if no foreign control is involved, minority stakes in companies tied to national security could still attract regulatory scrutiny.
The International Traffic in Arms Regulations (ITAR) is a U.S. federal regulation administered by the U.S. Department of State designed to protect U.S. national security interests by restricting the transfer of sensitive
military and dual-use technologies to foreign entities or governments. Companies involved in defense contracting or manufacturing products with military applications must comply with ITAR requirements. ITAR can have significant implications, particularly when a target company is involved in defense contracting or deals with sensitive technologies. During due diligence, private equity firms must assess whether the target company is subject to ITAR and whether any of its assets, products or services fall under its jurisdiction. If so, the acquirer may need to obtain specific approvals from the U.S. government before completing the transaction, especially if the acquirer is a foreign entity. ITAR compliance can affect deal timelines, costs and structure. Failure to comply with ITAR could result in severe penalties, including fines and loss of export privileges, making ITAR a crucial consideration in any transaction involving defense-related assets.
Private equity transactions that may involve substantial complexities like HSR, CFIUS or ITAR require significant legal expertise to ensure early issue identification and efficient deal management.
Anthony J. Cox is a Corporate and Finance attorney with Calfee, Halter & Griswold. Contact Tony at 216-622-8596 or acox@calfee.com.
Avoid distress: These failures are not an option
By Christopher J. Hewitt and Jayne E. Juvan
Those who closely follow economic policy understand that pinpointing exactly where we are in any given economic cycle is challenging even for the most experienced economists. Most recently, U.S. GDP grew at a relatively strong clip of 2.8% in Q3 2024, bolstered by consumer spending. In 2024, The Federal Reserve cut interest rates twice, and the Trump market rally began in earnest the day after the election, posting impressive gains on both the Dow and
the Nasdaq. In a potentially deregulated environment created by a Republican administration, happy days may be here again.
But whether these are happy days is no matter for companies that are distressed or on the brink of becoming so. In fact, distress is often created when times are good, not when headwinds are ever-
present. Warren Buffett famously quipped, “Only when the tide goes out do you discover who has been swimming naked.” Indeed, difficult times reveal which companies were careless in better times.
In our experience, the reason good companies with valuable assets go bankrupt is because of mismanagement.
Yes, some businesses are doomed. Take, for example, VHS rentals. But even there, Blockbuster could have transformed into Netflix before that competitor was ever formed. Netflix’s most likely path should have been that it would start as a fledgling and fall away given its lack of customers, brand recognition, and brick and mortar locations, or be acquired. Blockbuster should have had an advantage given its knowledge of the industry and the war chest it had the opportunity to build. But instead, Blockbuster eschewed a partnership offer from Netflix, only to subsequently find
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Jayne E. Juvan, Partner Co-Chair, M&A and Securities & Capital Markets Jayne.Juvan@TuckerEllis.com
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itself in bankruptcy. By contrast, Netflix became the real blockbuster, not needing the legacy brand at all. Reed Hastings, its founder, has been celebrated for his brilliance, while far fewer remember Blockbuster’s executive team.
Most properly-run companies will adapt to survive. In that regard, we’ve seen some common themes in companies that have gone into distress. Identifying these failures early could potentially save companies from that fate.
Failure of governance
The U.S. government is based on a philosophy of checks and balances. No branch of the government is more important than another. Similarly, we have found that the highest-functioning companies have strong boards of directors or managers or some other
In our experience, the reason good companies with valuable assets go bankrupt is because of mismanagement.
governing body that acts a check or governor on executive authority. While it has been said that “power corrupts, but absolute power corrupts absolutely,” a trustworthy organization with a strong governance framework attracts and retains investors, customers and talented employees, enhancing both their brand and profitability. It’s no coincidence that Jack Welch built a strong board with diverse skillsets and ultimately took GE’s market value from $14 billion to over $400 billion. A properly functioning CEO should surround herself with people whose opinions she values and should actively seek their views, even when they are dissenting views.
Failure to properly set strategy
As Jim Rohn once said, “Don’t major in minor things.” If the CEO is focused on being the chief cook and bottle washer, she will inevitably lose focus of strategic direction. The highest and best use of a CEO’s time is to reflect on the business, study industry trends, analyze competitors and otherwise think strategically. Once set, the vision and strategy need to be communicated broadly across the organization so that everyone understands and aligns behind the “why” driving the company’s purpose and the goals it aspires to achieve.
Failure to innovate
Clayton Christensen once said, “If you don’t disrupt yourself, someone else will.” There perhaps is no better example of why innovation is critical than Blockbuster. Had Blockbuster have thought ahead and developed new product and service offerings, it would have been in a better position to fight off the competitive threat that Netflix posed.
Failure to control expenses
Expenses should be tied to the organization’s strategic vision. Otherwise, resources are spent on non-core activities and hinder growth opportunities. Properly focusing on spending frees up capital for strategic investment and innovation.
JUVAN HEWITT
Failure to delegate and encourage
Every company has many moving parts that need to function together properly — research and development; marketing; manufacturing; operations management; human resources; facilities management; and accounting and finance, to name a few. Each of these areas requires its own skillsets, perspectives and resources. No one person has those skills and perspectives. Executives who oversee these divisions should have decisionmaking authority and be empowered to lead and not be micromanaged by the CEO.
When the Dow was created in 1896, it consisted of American Cotton Oil, American Sugar, American Tobacco, Chicago Gas, Distilling & Cattle Feeding,
General Electric, Laclede Gas, National Lead, North American, Tennessee Coal and Iron, U.S. Leather and U.S. Rubber. While not still part of the Dow, only GE still is publicly traded with an enormous market capitalization today. With leaders like Jack Welch in the recent past, that is no coincidence. Jayne E. Juvan is co-chair, M&A and Securities & Capital Markets, at Tucker Ellis. Contact her at Jayne.Juvan@ TuckerEllis.com. Christopher J. Hewitt is co-chair, M&A and Securities & Capital Markets, at Tucker Ellis. Contact him at Christopher.Hewitt@TuckerEllis.com.
Mastering net working capital: Key factors that shape the deal
By Mindy S. Marsden, CFE
Net working capital (“NWC”) is often a highly scrutinized component in M&A deals and can significantly impact the purchase price. NWC represents the liquidity a company needs to run its day-to-day operations and ensures the business can continue functioning smoothly after the deal closes.
The calculation for NWC is current assets less current liabilities and is commonly presented on a cash-free and debt-free basis in M&A deals; however, it is not that simple. The inclusion or exclusion of the following items can complicate the calculation and function of the NWC mechanism in an M&A transaction:
Clear negotiation on subjective items is vital to ensure both parties agree on a fair NWC target.
Deferred revenue
This represents payments a company has received in advance for goods or services it has not yet delivered. This is often viewed as debt-like and excluded from NWC, but that is not always the case as it depends on the company’s industry. This is a highly debatable component of NWC in subscription-based or SAAS businesses.
Gift certificates
Similar to deferred revenue, this liability represents pre-payment for goods or services. Depending on the industry of the business and if it’s viewed as part of the day-to-day operations or debt-like, it could be negotiated to be included or excluded in NWC.
Unbilled receivables
These represent revenue that has been earned for goods delivered or services
rendered, but for which an invoice has not yet been issued to the customer. This is generally seen in industries where billing happens on a milestone or time-based basis, like construction or consulting services. It can be included or excluded depending on many factors such as the cadence of the activity, verification and reliability, and the overall consistency of the company’s billing practices.
Accounts receivable and/or accounts payable that are aged beyond a certain period of time (i.e., outside of normal trade terms).
Inventory valuation
Depending on demand, there could be an argument that a higher valuation is needed to meet future demand or that there should be a discount on the valuation for slow-moving stock.
Proper negotiation and clarity around these subjective items are vital to ensure both parties agree on a fair NWC target, preventing post-closing disputes. It is recommended that the methodology for calculating the NWC target is agreed upon during the LOI stage, and clear definitions are outlined in the purchase agreement.
If you are involved in a transaction and need assistance in calculating or negotiating a methodology for NWC, we have experts that can help.
Mindy S. Marsden, CFE, is partner of Transaction Advisory Services at Bober Markey Fedorovich. Contact her at 330-255-2439 or mmarsden@bmf.cpa.
MARSDEN
A legal perspective on the art of the Letter of Intent
By Josh Bass
In the high-stakes realm of mergers and acquisitions, the Letter of Intent (LOI) is far more than a preliminary formality — it’s the strategic linchpin that charts the course for a successful transaction. At Taft, the firm’s corporate attorneys are skilled at guiding clients through the intricate nuances of this pivotal document. Below is a high-level exploration of some of the essential components of a LOI, along with insights on how to craft and negotiate each element with strategic acumen.
1. Preamble: Setting the scene
The preamble frames the deal and aligns both parties’ expectations. It introduces the key players, outlines the nature of the transaction and delineates the parties’ overarching objectives. Though seemingly straightforward, this section is critical in establishing a coherent framework and aligning expectations early.
When representing the buyer, it’s imperative that the preamble unequivocally defines the type of acquisition: asset purchase, stock acquisition or a merger. Are you buying an entire company, or is this a carve-out of a specific business line or entity?
2. Purchase price: Defining the value
The purchase price is often the focal point of discussions as it encapsulates the deal’s economic essence. It’s often advisable to articulate the price and provide a transparent rationale for its determination. Is the valuation based on multiple EBITDA, a recent fundraise or otherwise?
The LOI should clarify whether the price is fixed or subject to adjustments contingent on due diligence findings or closing working capital adjustments. There are also concepts like earn-outs or contingent payments that come into play, offering the seller the potential for additional compensation based on post-transaction performance metrics over a defined period of time. Achieving a balance between specificity and flexibility is crucial — securing a fair price while retaining room for necessary adjustments.
3. Payment terms: The how and when
Payment terms, closely related to the purchase price, deserve their own distinct discussion due to their inherent
materiality and complexity. Will the payment be structured as a lump sum, series of installments, promissory note (subordinated or not) or a mixture of cash and equity?
For sellers, negotiating a larger upfront payment can mitigate risk exposure, while buyers might favor a staggered or deferred payment structure linked to achieving specific post-closing milestones. This section also encompasses provisions for escrow accounts or holdbacks to ensure adherence to deal terms and company representations. The art of negotiating payment terms lies in aligning financial strategies with both parties’ risk tolerances.
4. Due diligence: Unearthing the details
The due diligence clause is the investigative component of the LOI, detailing the buyer’s right to conduct a comprehensive examination of the seller’s business. This encompasses a buyer review of financial statements, legal contracts, intellectual property, physical assets, real estate and other critical elements. The scope and timeline for due diligence must be meticulously defined to avoid any future ambiguities and give both sides proper time to procure and review all items.
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Discovering hidden liabilities or underperforming assets might necessitate a renegotiation of the purchase price or even an exit strategy. Crafting a thorough and precise due diligence clause is essential for safeguarding against unforeseen risks.
5. Confidentiality and exclusivity: Protecting the process Confidentiality clauses are indispensable in protecting sensitive information exchanged during negotiations. Without these safeguards, a seller risks disclosing critical business insights to a prospective buyer who may ultimately withdraw (and who could even be a competitor).
Exclusivity clauses, or “no-shop” provisions, prevent the seller from pursuing alternative offers while the buyer undertakes due diligence and spends time and money. These clauses are designed to protect the buyer’s investment in time and resources. It’s crucial to negotiate the duration of exclusivity carefully — long enough to complete due diligence, but not so protracted as to disadvantage the seller.
6. Binding and non-binding provisions: Knowing the limits
A LOI typically encompasses both binding and non-binding provisions. While the broader transaction terms are usually non-binding, certain elements — such
as confidentiality, exclusivity, payment of expenses and governing law — are generally binding. Clearly delineating which provisions are binding is critical to avoid potential disputes.
7. Termination clauses: Planning the exit
Termination clauses delineate the circumstances under which the LOI (and exclusivity) can be dissolved, such as unsatisfactory due diligence results, regulatory scrutiny or failure to secure financing. Think of this section as a contingency plan — a safety net that, while not always utilized, is crucial for managing deal complexities.
Conclusion: The starting line, not the finish
A LOI is a foundational framework that sets the stage for all subsequent negotiations and agreements. By meticulously crafting and negotiating each section with strategic foresight, you can facilitate a smoother transaction process and robustly protect your interests.
Josh Bass is a corporate attorney in Taft’s Cleveland office. Contact Josh at 216-706-3985 or jgbass@taftlaw.com. For more information, visit taftlaw.com/ people/joshua-g-bass/.
BASS
I want to sell my business. How do I prepare, and where do I start?
By Patricia Gajda and Caroline Smith
If you are a business owner, there may come a time when you decide to sell your business and enjoy retirement. Maybe you don’t have someone to take over, or maybe you are interested in a new project. Regardless of your situation, you need a plan so that you can successfully sell your business. What should you do to prepare for a sale?
First, find and assemble your team. Do you have a lawyer, accountant or financial planner that you know and trust, and are they well-versed in transactional work? Selling your business is a significant move, and you must have an experienced, knowledgeable team to help you navigate it.
Next, determine the value of your business. In most cases, this involves engaging an appraiser or valuation expert. You may have already received inquiries or heard numbers regarding the worth of your business, but it is impossible to identify a fair offer unless you objectively know the value of the business. When putting together your sale timeline, remember that valuations and appraisals will take time.
The first two steps involve engagements outside of the company. Now, it is time to focus inwardly. Think about what you might do before trading in a car. You
would clean it out, organize its contents, prepare your title and registration, and collect your insurance documents. The same approach applies to the sale of your business. You must get your business in order.
Once you get past the niceties with a potential buyer and there is an interest to proceed with a purchase, the buyer is going to present you with a due diligence request list. Take a breath, because the list is usually long and very detailed. You might wonder why a buyer would need all of this information about your business. Buyers require a diligence list because they do not know your business as well as you; buyers have no idea how you manage your business or whether you comply with laws and regulations. Buyers might ask you for information through a formal, written request, email or an oral recitation. They might only ask for a few items, or they might ask for almost all of the information you have.
Due diligence requests typically cover all the following major areas:
Ownership
Make sure your company is in good standing. Confirm online with the Secretary of State’s office that all the necessary forms have been filed. Check in with any co-owners: is everyone in agreement to sell? Have the Articles of Incorporation/Organization, bylaws/code of regulations or operating agreement, voting agreements and any buy/sell or similar restrictions, all as amended.
Selling your business is a significant move, and you must have an experienced, knowledgeable team to help you navigate it.
Real estate and environmental
Do you own or lease your properties, or some combination of both? Do you have any easements or share agreements with a neighbor? Is the business entity the proper owner of record? For leased property, make sure you have the executed lease and any amendments, and that you know of any assignment rights. Find any environmental reports you have
The Roetzel Corporate and Transactional group provides strategic and commercial guidance to a broad range of middle-market participants, including privately held and emerging growth companies, debt/equity participants, traditional/ alternative lenders, financial advisors, as well as private investors, entrepreneurs and executives.
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on the property. If the property is subject to any orders, be sure to provide copies of them.
Cybersecurity
Have you had any cyber assessments done? Compile the reports. Have you had any cyberattacks? If so, what did you do to remedy them? Gather any information relevant to your business’s cybersecurity.
Labor and employment
Chart all active employees with title, whether they are part time or full time, salary or hourly, whether they receive bonuses and their years of service. Check that you have all relevant employee forms, including I-9s. Find your executed current labor agreement if your business has unionized labor. Provide any employment agreements, consultant agreements, severance or termination agreements, and stay put bonuses. Check whether you have non-competes or confidentiality agreements with your employees and consultants.
Litigation; compliance with laws
Work with your legal team to summarize the status of any current litigation or settlements. Be prepared to answer questions and bring copies of licenses, permits, approvals, certifications or any citations and warnings.
Contracts
Contracts are difficult to compile but very important to a buyer. Do you have contracts, agreements, blanket purchase orders or other written agreements? You need to provide a buyer with copies of all these documents. It is a best practice for your legal team to review your contracts for assignability, term, non-competes, confidentiality provisions and any licenses of intellectual property.
Miscellaneous
Some other documents typically sought during the diligence period include: your insurance policies, loss runs, fixed asset lists, an intellectual property list, bank loan documents, tax returns, your marketing materials and any social media information.
Remember, it may seem like a lot to do, but preparing in advance makes the process smoother, faster and cleaner when you are in the midst of the sale.
Patricia Gajda is a shareholder in Roetzel’s Corporate, Tax & Transactional Group. She can be reached at PGajda@ ralaw.com. Caroline Smith is an associate in the Corporate, Tax & Transactional Group. She can be reached at CRSmith@ralaw.com.
Chris Reuscher creuscher@ralaw.com
Daniel Silfani dsilfani@ralaw.com
• Asset, Stock, and Equity Purchase and Sales
• Commercial Contract and General Business Negotiations
• Corporate Governance and Shareholder/Board Management
• Cybersecurity and Data Privacy Guidance
• Labor/Employment, HR Compliance, Wage/Hour, and Exec. Comp.
• Mergers & Acquisitions, Joint Ventures and Exits
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• Succession and Estate Planning
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GAJDA
SMITH
Top five concerns in M&A in 2025: What buyers need to know
By Jeff Schwab
As anyone who has been involved in a merger or acquisition knows, they aren’t easy to navigate. On top of the typical amount of due diligence and paperwork, terms and concerns are always changing and evolving in Northeast Ohio and beyond.
Here are the top five things to consider as companies work through a merger or acquisition in 2025.
1. PFAS (per and polyfluoroalkyl substances)
Dubbed forever chemicals because they do not break down, PFAS has become the fastest-rising concern in insurance over the past two years. The reasoning is simple.
These chemicals are found in drinking water, soil and many common household items such as carpet, non-stick cookware and food packaging. They have even been found in fruits, vegetables and meats.
Research has linked the presence of PFAS to a host of health issues, such as cancer, high blood pressure and problems experienced during pregnancy, according to the Centers for Disease Control and Prevention.
As such, PFAS have become a huge liability for businesses, and insurers no
longer cover it. However, some of the legacy insurance policies may apply, so we suggest taking a close look at whether they currently or have used these chemicals, as it could change the worth of the business and increase costs.
2. Cybersecurity and liability
Cyberattacks are becoming increasingly prevalent through internal and external threats, and they target organizations in all industries, of all sizes, public or private.
When vetting an M&A transaction, take a close look at safety mechanisms used within the business to protect against cybercrimes such as malware, phishing and ransomware.
Does the business being acquired have a cybersecurity plan in place? This should include items such as mandatory cyber training for employees to ensure they know how to spot a scam through a fake email, phone call or video.
Every business should have a vendor authentication process in place for new and existing vendors. They should have
steps to verify the vendor before any requests by the vendor are fulfilled.
3. Property catastrophic events
Climate change is impacting weather patterns, resulting in more severe weather in places that historically didn’t worry about problems such as flooding, wildfires or hurricanes.
In Northeast Ohio, the U.S. Environmental Protection Agency warns that floods are becoming more frequent and temperatures are rising, which leads to a longer growing season and less ice cover on Lake Erie. In 2024, there were 24 insured events topping a billion dollars in damages. The Southern Indiana/Northern Kentucky region was recently deemed by insurers as a high hazard zone for wind and hail. Many in the mountain town of Asheville, N.C., likely thought they would not have to worry about massive floods until the town experienced deadly flooding due to Hurricane Helene last September.
During due diligence, consider if the company you’re interested in is prone to catastrophic weather. It could make insurance tougher to obtain and more expensive.
4. Supply chain
We live in a global economy in which we procure goods from around the world. It is convenient most of the time, but
a disruption in the supply chain could bring business to a halt.
For example, the bridge collapse in Baltimore in March 2024 significantly impacted the global shipping industry for months as the waterway was blocked. As the closest seaport to Northeast Ohio, logistics for many businesses had to be changed. This can cost money and valuable time.
As anyone who has been involved in a merger or acquisition knows, they aren’t easy to navigate.
When considering buying a company, determine how the supply chain could be disrupted. Are the proper precautions and plans in place to minimize the impact?
5. Workplace violence/active assailant
Workplace violence has been on the rise in recent years, with workers being injured by a colleague. Such violence can be triggered in many ways.
When vetting a business to acquire or become a partner, look at ownership beliefs. Does the owner support radical ideas or groups? Do they foster employee health and wellness by providing good benefits or practicing work-life balance? Does the business have a zero-tolerance policy for workplace violence? According to the U.S. Department of Labor’s Occupational Safety and Health Administration, such a policy combined with training and controls can help reduce the likelihood of workplace violence.
These factors should weigh heavily on any M&A decision, as they can be the difference between affordable insurance portfolios or obtaining insurance at all.
One of the most popular policies in M&A deals is Representation and Warranty. It is designed to enhance or replace the indemnification from the seller to the buyer. As M&A activity rebounds, we may see an uptick in pricing, but for now the coverage remains very competitive. The Oswald team can help you navigate a merger or acquisition, determine the risks your business faces and mitigate the impact.
Jeff Schwab is senior vice president of Private Equity Services at Oswald Companies. Contact him at 216-658-5208 or jschwab@ oswaldcompanies.com.
SCHWAB
How to handle private equity interest in your business
By Lizabeth Roth
With private equity’s everincreasing interest in the lower middle market, there has been an inevitable rise in the frequency in which business owners receive phone calls asking if they are interested in considering the sale of their business. Suppose you are on the receiving end of correspondence from private equity. In that case, it can be helpful to know what to expect and to understand better the questions to ask to qualify the opportunity presented.
Why is there an increase in interest from private equity?
An increase in new private equity firms and uninvested capital has caused substantially more competition for quality investment opportunities. A crowded marketplace leads to an overabundance of buyers all vying for the same banked M&A deals. As a result, more firms emphasize increasing deal flow through channels outside traditional sell-side investment banking relationships.
This process, known as proprietary deal origination, involves firms prioritizing direct outreach to business owners and leadership teams focusing on relationship building in preparation for a future sale. Proprietary origination is attractive
because it can provide an exclusive opportunity for a firm to talk directly to a business owner as the only potential buyer or allow the firm to develop a rapport, hopefully providing a competitive advantage when the business enters a formal process
To get started, most firms will develop an investment thesis specifying the qualifying profile of companies they want to target as potential investment opportunities. From there, private equity professionals will assemble a list of companies the firm believes best fit the search criteria. Next, most firms will focus on direct outreach to the business owners and leadership teams on the list of target companies. Direct outreach may include letters, emails, phone calls and messages on LinkedIn.
You said yes to an introductory call. Now what?
Most introductory calls between business owners and private equity firms follow a similar cadence. After exchanging pleasantries and a round of introductions, the firm will typically take the lead and
present a general overview. Your goal should be to ask the right questions to assess whether this opportunity aligns with your personal goals and objectives for the business. The following are questions that could be helpful to ask:
• What is the firm’s investment strategy and structure?
• Why is there interest in your company?
• How did the firm find your company?
• Does the firm envision your company as a new platform investment or as an addon acquisition?
• Does the firm have a successful track record and relevant industry experience?
Most introductory calls between business owners and private equity firms follow a similar cadence.
• What is the firm’s preferred deal structure? Does it involve cash at close, rollover equity or an earn-out?
• How does the firm envision ownership or leadership’s involvement postacquisition?
• What is the firm’s management style?
Similarly, the private equity firm you are
speaking with is trying to determine if your company matches its investment thesis as quickly and professionally as possible. It would help if you prepared to answer the following;
• Can you provide a general business overview highlighting core product/ service offerings?
• What industries and end-markets does your company serve?
• What is the company’s geographic focus?
• Can you describe the company’s facilities, including location, square footage and capacity?
• What is the financial profile of the company?
• What is the makeup of the company’s workforce?
• Does the company have a leadership team in place?
• Can you discuss the customer base?
• Does the company have any customer concentration in its top 10 customers?
• What are ownership’s goals postacquisition?
What happens when you decide to move forward with the next step?
Let’s assume that both parties want to continue the discussion; this will lead to the execution of a non-disclosure agreement (NDA) and an exchange of
additional data. An NDA is a legally binding document that protects confidential information exchanged between parties. After executing the NDA, the private equity firm will share a followup Request for Information (RFI). Most commonly, an RFI will include questions about historical financials, employee makeup, customer data, product/ service breakout and general organizational information. This next step kicks off the private equity’s diligence process.
Once you have determined that you have a genuine interest in the opportunity presented, it is also important to start assembling your advisory team — including, but not limited to, legal, accounting, wealth management and business advisory. When putting together your team, it is essential to recognize that some of the advisers who have helped you get to where you are today may not be the best equipped to get you where you want to go. Ensuring that the team around you has experience working in and around transactions must be stressed.
If you are receiving interest from private equity or want to learn more about how Copper Run can support your deal origination efforts, please contact Lizabeth Roth at lroth@copperruncap.com.
ROTH
Timing the exit process
By Jeff Johnston and Arindam Basu
Experts across financial, academic and business fields agree that it is futile to try to time the market when making individual investment decisions. However, when contemplating the sale of a business, there are various internal and external considerations about timing the exit process that can help improve the chances of a successful outcome.
Assemble a team of experts
Once a decision has been reached to sell a business, timing the exit starts with fundamental preparation and strategic planning. This is where engaging with experienced financial and legal advisers early can help enhance the likelihood of a successful outcome. Notwithstanding macroeconomic factors, the business must be seen as a sound investment for the next buyer. In making initial investment decisions, buyers usually focus on recent financial performance, future capital requirements and the
management team’s quality.
Irrespective of a type of transaction or eventual buyer, a strong management team with experienced people in all key positions will be essential in driving the exit process and ensuring value maximization. If there is a significant open position in the executive management or commercial leadership teams, it is prudent to fill that position and allow the individual six to 12 months in the seat ahead of an exit process.
Position the company for a strong financial performance With respect to financial performance, the best time to exit is when the business is firing on all cylinders, exceeding budgets and demonstrating continued growth. Much of the buyer’s financial due diligence focus will be on the trailing 12 months of earnings before interest, taxes, depreciation and amortization (“EBITDA”). This cash flow metric and the company’s capital expenditure profile
are critical when determining the level of indebtedness a business can support and can directly impact valuation. However, equally important are the company’s future prospects, which include demonstrating sustainable growth by accessing new markets, introducing new products / services or taking advantage of industry trends. If for example, nearterm growth prospects require a capital investment, it may be prudent to make the investment and allow some time to demonstrate a ramp-up in financial performance ahead of a sale. Buyers are often reluctant to increase value related to new or unproven growth initiatives, which can lead to a discount on its implied value or a change in structure (earnout or future payments tied to the initiative’s performance).
Prepare for due diligence
Any sale process requires significant effort from all parties to facilitate comprehensive due diligence. This involves all aspects of the business, including operations, customer and supplier relations, HR, IT, health and safety, environmental, legal, risk management, financial, etc. The best advisers help business owners anticipate and prepare for such due diligence well ahead of starting the exit process. Due diligence creates significant demands on management’s time; being well-organized and prepared minimizes surprises during the exit process.
Strategically plan for impact of key external factors
Savvy business owners are generally cognizant of macroeconomic, geopolitical and other extraneous elements that impact their performance. For instance, timing an exit during a U.S. presidential election cycle is always complicated — not because buyers prefer one party or the other, but mostly due to the uncertainty of potential policy directions
Any sale process requires significant effort from all parties to facilitate comprehensive due diligence.
until the results are clear. While stock market performance might dominate the airwaves before and immediately after elections, near-term economic indicators, cost of financing and tax policies are significantly more important to sellers and buyers.
Geopolitical issues are increasingly impacting businesses across most sectors of the economy, particularly those exposed to tariffs, supply chain complications, labor issues (think port strikes), etc. One business might directly benefit from new or existing tariffs, while another might experience significant impacts in end-user demand due to prevailing tariffs. An industrial distribution business relying on a global supply chain may be severely disrupted by port strikes. While any single business owner cannot control these issues during a sale process, they should work with their advisers to be prepared to address business impacts and due diligence questions.
Thoughtfully time the exit Transactions that require antitrust, national security or other regulatory clearances may need several months from signing of definitive agreements to final closing. For example, a sizeable
specialty materials business with strong competitive position that sells critical minerals to the Department of Defense can expect multiple lengthy regulatory reviews before closing. If this business owner wants to close a transaction before a certain date, they should account for the regulatory approval process and start the exit process early.
Timing an exit process for a business requires introspection, strategic planning and thoughtful preparation, while accounting for a host of internal and external parameters. Control the controllables and have a plan for potential surprises that invariably arise.
Jeff Johnston is managing director and group head of Mergers & Acquisitions at KeyBanc Capital Markets. Contact him at 216-689-4115 or jjohnston@key. com. Arindam Basu is managing director of Mergers & Acquisitions at KeyBanc Capital Markets. Contact him at 216689-4262 or abasu@key.com.
KeyBanc Capital Markets is a trade name under which the corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., member FINRA/SIPC (“KBCMI”), and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and by its licensed securities representatives. Banking products and services are offered by KeyBank N.A.
Preparation is the cornerstone to a successful exit
By Amber J. Ferrie
Transitioning your business is much more than a financial transaction. It’s a major life change that can bring up a range of emotions, from excitement, to anxiety, to joy and even grief. While it may be the right decision for you, it’s important to be prepared for the process, and we can help.
No matter who the next owner of your business may be or when you plan to exit, transitioning is a significant process that requires time and effort. It’s a series of choices, assessments and reassessments that can influence how you run your business. And while emotions are inevitable during this process, there are actions you can take action to prepare:
1. Identify your “why” and your expectations for the sale.
The first crucial step to ensuring a smooth and successful transition — a step you should take well before starting the transition process — is establishing a clear understanding of why you are selling your business. Are you selling it for financial reasons? Health? Are you ready to retire? What is your top priority for the transaction? Is it making an impact on the community? Ensuring the company
culture you’ve built endures new ownership? Opening opportunities for loyal employees?
Clarifying your intentions and expectations early on can help you make informed decisions and reduce the risk of unexpected emotional reactions.
2. Build strong systems and processes.
Clear systems and process are essential for building a robust infrastructure and optimizing operations. By incorporating data analytics and bestin-class reporting, organizations can collect comprehensive information and understand their business in real-time. Such transparency can prove invaluable during a transition period. A business with sturdy systems and processes is viewed as more scalable and easier to integrate into a buyer’s existing operations. Therefore, having these systems in place can make a business more attractive to potential buyers.
Moreover, streamlining your business operations can increase efficiency and reduce costs. This might include implementing process improvements,
automation and technology solutions to enhance productivity and profitability. An operation with robust systems and processes can attract buyers seeking a well-organized business.
3. Seek professional help from trusted advisers.
You can’t complete a successful transition alone — and fortunately, you don’t have to. Seeking professional help can provide valuable insight and expertise to guide you through the complex process of selling a business.
Professional advisers can help you maximize the value of your business, ensuring that you receive the best possible return on your investment. They can assist you in determining the valuation of your business, assessing the marketability and strategizing a financial plan for after the sale.
Why start exit planning early?
Enhancing your business’s value takes time, effort, energy and strategy. There is no “perfect time” to start looking for a buyer. Rather, you must look at your long-term business and financial goals. Planning early and executing initiatives to position your business favorably in the marketplace will help attract potential buyers when the time comes.
To get in a selling state of mind, you
should:
• Be financially and psychologically prepared to handle the efforts required in a transaction.
• Set realistic expectations and gain knowledge of the transaction process.
• Have the fundamentals in place to respond to due diligence efforts.
• Prepare your team to continue business under new ownership.
• Make the necessary adjustments to optimize the value of your business.
Above all, being sell-ready means setting operational goals and positioning your company optimally to achieve those goals. Eide Bailly can help. Download our e-book to learn more about building a successful exit strategy.
Future Up to Chance
trusted advisor can help you
Amber J. Ferrie CPA, ABV, CFF, CM&AA is a partner/transaction advisory & private equity industry leader at Eide Bailly. Contact her at 701-239-8608 or aferrie@ eidebailly.com.
FERRIE
2025 M&A boom: Key sectors primed for enhanced growth
By Amy Willey
After a sluggish 2023, the mergers and acquisitions landscape improved in 2024, signaling the start of a promising recovery in deal activity. While deal volume increased and is approaching pre-pandemic levels, it has not reached the levels seen during the boom of 2021-22. This gradual rebound can be attributed to factors including higher interest rates, inflation and ongoing global geopolitical uncertainty, which have hindered
deal activity momentum. With consumer confidence in the economy growing, interest rates expected to ease, bottled-up interest from business owners to monetize their assets, and the time-limited nature of private market investments, the stage is set for heightened M&A activity in 2025.
The following sectors appear particularly ripe for activity.
Artificial intelligence & technology In 2023-24, industry leaders grappled with embracing AI for their operations. According to IDC, global AI market spending stands at nearly $235 billion, with projections indicating a rise to over $631 billion by 2028. With the potential need and appetite for AI in the future, AI companies experienced significant investment from venture
capital and limited partners for research and development in 2024.
While investors are expected to continue their interest in AI companies, the large-scale investments made for R&D in 2024 are expected to decrease. We anticipate seeing deal activity by mid-2025 for the most successful AI companies coming out of these R&D activities. We also anticipate increased deal activity due to digital transformation as companies develop a greater need for cloud computing and cybersecurity.
The team that gets your deal done!
McDonald Hopkins’ full-service M&A practice is committed to knowing the goals of its diverse client base servicing numerous industries. With a team of attorneys who understand the importance of balancing risk with a client’s focus on closing a transaction, we are the destination for businesses looking for an integrated approach to M&A. We work seamlessly with professionals in tax, executive compensation, finance, employee benefits, intellectual property, and restructuring to provide business-focused solutions to complex deal issues.
Health care
While private equity deal making activity in health care decreased in Q3 2024 and has declined since 2021 highs, industry experts remain optimistic about an increase in health care M&A in 2025. The health care M&A market has seen a consolidation of providers resulting from efforts to improve efficiency, combat labor shortages, and promote technology adoption and revenue cycle optimization. Medspa and aesthetics, outpatient mental health, cardiology, aesthetics, dermatology, oncology, specialty dental and veterinary will continue to see high demand and interest in 2025 for sponsorformed physician practice management companies.
Energy
The energy sector is expected to experience a surge in M&A activity in 2025 due to an increased focus on transitioning to cleaner energy sources, renewable energy acquisitions, strategic partnerships to develop carbon capture technologies and consolidation within the sector.
Financial services
Traditional financial institutions are experiencing increased competition from non-regulated and less-regulated financial service startups and fintech companies. As a result, the financial services sector is expected to see greater M&A activity in 2025. Traditional financial institutions are focusing on cost efficiencies and scalability, which may lead to additional acquisition activity. Financial institutions are looking to expand technology to provide new services to build and maintain strong customer relationships. This
In 2023-24, industry leaders grappled with embracing AI for their operations.
will continue for financial services M&A activity in 2025, as acquirers need to make robust value-add offers based on new services and technologies, as well as compliance and regulatory solutions and cost efficiencies. Some experts believe that M&A activity in this sector will increase in 2025 and 2026 due to an expectation that deal approval “will speed up markedly and the process will be more clearly delineated” under a Trump administration, according to Piper Sandler analyst Mark Fitzgibbon.
Industrial and manufacturing
The industrial and manufacturing sectors are expected to see moderate growth in 2025 as digital transformation and automation technologies put pressure on companies to stay competitive in an evolving market. With sustainable transportation gaining momentum, increased investments in battery technology, electric vehicle infrastructure and autonomous vehicle development will likely drive additional deals.
While we do not anticipate M&A activity rising to the unprecedented levels of 2021-22, the number of transactions in 2024 approached pre-pandemic levels of activity, setting the stage for an exciting 2025. The pent-up demand for deals,
combined with renewed optimism in the market, means 2025 could see an influx of high-stakes transactions driven by a powerful mix of buyer appetite and seller readiness. This environment could spark bidding wars, pushing deal values higher and accelerating the pace of activity.
Start planning now if you are considering an acquisition or divestiture in 2025. Consulting with your advisers early is crucial to navigating shifting market dynamics and capitalizing on this exciting M&A environment. With an optimistic deal horizon on the way, the 2025 M&A market promises opportunity and strategic advantage.
Amy Willey is a member in the Mergers and Acquisitions Practice Group at McDonald Hopkins. Contact Amy at awilley@mcdonaldhopkins.com. To learn more, visit mcdonaldhopkins.com.
The foregoing discussion is general information rather than specific legal advice. Always consult your legal adviser before using this discussion as a basis for a specific action. This material is not intended to create, and your receipt of it does not constitute, an attorney-client relationship with McDonald Hopkins.
Real estate valuation challenges in M&A deals
By Charbel M. Najm
Real estate valuation plays a crucial role in many mergers and acquisitions (“M&A”), especially when real estate assets may represent a significant portion of a target company’s value. However, accurately assessing real estate value in M&A deals comes with unique challenges. Key obstacles include diverse valuation methods, complex ownership structures
NAJM
and strategic tax planning.
The first challenge, evaluating the real estate assets, requires the calculated decision on which valuation method is best suited for the deal. There are three main valuation methods:
What’s next — planning for business succession
By Michael D. Makofsky and Ryan M. Palko
Lower-middle market businesses are the runaway for the American dream. After years of growth (and success), many family-owned businesses reach a pivotal moment when it’s time to plan for the future. Whether the decision is to sell, hold or transition the business to the next generation, these closely-held businesses are often the cornerstone of family wealth. Thoughtful planning ensures the business legacy and value are preserved for years ahead.
Succession planning for the family business takes one of three main forms — selling, holding or transitioning the business.
The classic example of family business planning is going to market. On one hand, sales of closely-held businesses are influenced by latent issues of valuation, financing and other potential pitfalls. On the other hand, a sale provides a direct injection of liquidity, unlocking wealth and helping owners transition into another phase of life. A sale may be best for those who want to get out of a business and pursue new endeavors.
The business could also continue operating in the family — even without the daily operations of legacy owners. The power of restructuring allows legacy owners to step back from the day-today, remain involved and add flexibility. Restructuring is an option for businesses with a strong management team that can continue profitable operations.
Transitioning the family business takes many forms. Advisers have multiple tools to tailor transitioning options with an eye toward tax, business and corporate considerations. Transitioning could be from legacy owners to current management, intra-family or even a hybrid — all bearing unique considerations. Transitioning the business may be best for those owners looking to pass an incomeproducing asset onto future generations.
Succession planning for the family business takes one of three main forms — selling, holding or transitioning the business. In all circumstances, legacy owners can guard their visions with creative, yet comprehensive planning to keep their asset running in tip-top shape.
Michael D. Makofsky is principal at McCarthy, Lebit, Crystal & Liffman Co. Contact him at 216-696-1422 or mdm@ mccarthylebit.com. Ryan M. Palko is an associate at McCarthy, Lebit, Crystal & Liffman Co. Contact him at 216-696-1422 or rmp@mccarthylebit.com.
Ultimately, navigating the difficulties of real estate valuation in M&A deals requires expert knowledge, thorough due diligence and a flexible approach to account for these varied challenges.
(i) the income approach which utilizes the current profitability of a property; (ii) the replacement cost approach which utilizes the current reconstruction cost of a property; and (iii) the comparable sales approach which utilizes recent similar real estate transactions. Further, companies may own a mix of properties, from office buildings to retail spaces, each of which may warrant the use a particular valuation method. Land, for example, may be valued based upon zoning potential or other factors that may not be relevant in evaluating an office building.
The second challenge, strategic tax planning, is vital. There can be many intricacies depending upon the length of ownership of the real estate, the current ownership structure and the sales price. Often, real estate owners may elect to complete what is known as a 1031 like-kind property exchange to defer any capital gains tax liability. A 1031 like-kind property exchange requires that the selling property owner(s) purchase another replacement property utilizing the sale proceeds to defer any capital gains tax liability.
Ultimately, navigating the difficulties of real estate valuation in M&A deals requires expert knowledge, thorough due diligence and a flexible approach to account for these varied challenges.
Charbel M. Najm, Esq., is an associate at Schneider Smeltz Spieth Bell LLP. Contact him at 216-696-4200 or cnajm@sssb-law.com.
MAKOFSKY
PALKO
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Avoid surprises. Our national experts provide thorough buy and sell-side due diligence and quality of earnings assessments so you can make informed transaction decisions.
Mark B. Bober mbober@bmf.cpa
Steve C. Swann sswann@bmf.cpa
Mindy S. Marsden mmarsden@bmf.cpa
Key considerations in raising debt or equity capital
By Edward Hopson
Entrepreneurs, business owners and senior executives have been engaged in raising capital for centuries. Whether the capital was financed as debt or equity, the “best practices” to raise the capital have changed over the years. But one thing has remained constant — providing evidence the debt can be repaid or that the return on investment justifies the equity investment and risk. Lenders and investors employ many methods to evaluate the inherent risks and returns of business loans or equity investments. We explore some key methods utilized in today’s lending and private equity industries.
The most common form of raising capital is debt, which is usually obtained as either a bank loan, equipment, real estate financing from specialty lenders or capital leases from leasing companies with options to purchase the equipment at the end of the lease term. These lenders usually adhere to commercial credit policies and underwriting guidelines rooted in “The 5 Cs of Commercial Credit:”
• Character: professional background and credit worthiness
• Collateral: pledged assets
• Capacity: the borrower’s ability to repay the loan.
• Capital: The business’ net worth or equity, and potentially the personal net worth of any loan guarantor associated
with a startup • Conditions: the current and projected economic climate.
The focus of raising equity shifts to future potential. Characteristics such as product/service marketing potential, sales projections and the enterprise’s future valuation are important to equity investors. Less emphasis is placed on the owners’ net worth since equity investors usually have the option to impact the management or direction. The business plan should be well-developed, and sales projections must include potential market and industry elements that can affect business growth.
Raising capital through debt or equity requires your business model and financials to justify the financing or equity investment. Lenders or investors want to verify the enterprise can service the debt and/or provide an adequate ROI regardless of the normal ebbs and flows of business operations.
Edward C. Hopson is a certified business advisor by the Ohio Department of Development’s SBDC Program, a former commercial banker at two major banks, and he has nearly 30 years of experience in entrepreneurship, business banking and real estate finance. Contact him at 234-274-6185 or edward@hopsoncc.com.
ESOPs: The business succession solution
By Jake Derenthal and Sebastian Pascu
An employee stock ownership plan (ESOP) may be the best way to secure your business legacy. Transitioning a closely-held business to an ESOP-owned structure provides current owners with financial liquidity together with tax benefits to the sellers and the company alike. In most circumstances, owners continue to guide the culture that has benefited employees and customers over the years.
Selling all or a portion of a company to an ESOP allows legacy owners of family businesses to guide future management and determine their post-transaction role in the company they have nurtured for years. There is no need to walk away and watch from the sidelines unless you choose to do so.
Through creation of an ESOP, selling company owners lead the transformation of the business while generating favorable after-tax sale proceeds in a structure designed to benefit the owner’s family, employees and customers for years to come. ESOP benefits include:
• Creation of perpetual tax-exempt market maker for company stock.
• Minimizing estate taxes and preserving family wealth.
• Assuring management continuity and company culture.
• Eliminating federal income taxes on company profits.
• Assuring continued care for company employees and customers.
After the ESOP transaction, most sellers continue to manage the business and build an “ownership culture” which is the driving force for ESOP companies out-performance of non-ESOP counterparts. Employees get a “piece of the action” that allows family businesses to grow and thrive, benefiting generations of future ESOP stakeholders.
Jake Derenthal is a partner and chair of Walter Haverfield’s Business Services Group. He is experienced in corporate transactions including business succession planning, ESOPs, mergers, acquisitions, divestitures and corporate restructurings. He can be reached at 216928-2933 or jderenthal@walterhav.com.
Sebastian Pascu is a partner and chair of Walter Haverfield’s Tax & Wealth Management Group. He counsels domestic and international highnet-worth individuals, families and closely-held businesses in a wide range of personal, charitable, business succession (ESOP) and estate planning matters. He can be reached at 216-619-7870 or spascu@walterhav.com.
HOPSON
CORPORATE GROWTH & M&A
Northeast Ohio’s top deal makers to be honored
ACG Cleveland will recognize the winners of its 28th Annual Deal Maker Awards. The event is scheduled for Jan. 29 at the Huntington Convention Center of Cleveland’s Atrium Ballroom.
The Deal Maker Awards honor Northeast Ohio’s leading corporate deal makers for their accomplishments in using acquisitions, divestitures, financings and other transactions to fuel sustainable growth. Here are this year’s winners:
Deal of the Year Winner: CBIZ, Inc.
CBIZ, Inc. (NYSE: CBZ) is a leading professional services adviser to middlemarket businesses and organizations nationwide. With unmatched industry knowledge and expertise in accounting, tax, advisory, benefits, insurance and technology, CBIZ delivers forwardthinking insights and actionable solutions to help clients anticipate what’s next and discover new ways to accelerate growth. CBIZ has more than 10,000 team members across more than 160 locations in 21 major markets coast to coast. For more information, visit cbiz.com.
Corporate Deal Maker Winner: NexaMotion Group
NexaMotion Group (NMG), the parent company of Transtar, is at the forefront of innovation, tackling critical challenges in the automotive repair industry and serving both transmission and general automotive repair shops. With over 50 years of leadership in the aftermarket, NMG is dedicated to simplifying complex vehicle repairs to keep the world moving. Supported by a team of more than 1,500 dedicated members and a robust network of over 125 locations, NMG provides access to industry-leading brands and delivers forward-thinking solutions. Through unparalleled customer service, efficient distribution of cutting-edge OE and aftermarket products, and its industry-leading e-commerce platform, Transend Auto Tech, NMG simplifies the process of ordering complex parts, setting
a new benchmark in the aftermarket space.
Over the past 18 months, NMG has achieved remarkable growth through strategic acquisitions and divestitures.
By adding C&M Auto Parts, Arch Auto Parts, PPi Automotive, 4M Parts Warehouse and City Auto Supply to its portfolio, NMG has expanded its footprint by 47 locations, welcomed 470 new team members and driven significant revenue growth. These acquisitions have enhanced the company’s ability to serve customers by broadening its reach and expanding product offerings.
In parallel, NMG successfully divested CoverFlexx Group to Axalta Coating Systems for $285 million, a strategic decision that enables a focused investment in its core business.
NexaMotion Group continues to redefine the automotive aftermarket by leveraging innovation, strategic growth and strong customer partnerships, confidently shaping the future of the industry.
Buyout Deal Maker Winner:
Bridge Industries
Bridge Industries is a private holding company focused on acquiring and advancing companies within the industrial manufacturing and energy sectors. The firm collaborates with management teams to drive growth and operational excellence, creating longterm value for all stakeholders. Bridge Industries’ strategic approach emphasizes hands-on operational involvement and the integration of complementary businesses to maximize value.
Women in Transactions: Megan Mehalko, Co-chair, Corporate & Securities Practice Group; Member, Executive Committee
Megan is a seasoned attorney and trusted adviser to both public and private companies, providing strategic counsel
2025 CALENDAR OF EVENTS
in executing complex domestic and international mergers, acquisitions, divestitures and joint ventures. With a deep expertise spanning critical industries such as performance materials, metal forging, chemicals, health care devices and consumer products, Megan has consistently delivered exceptional outcomes for her clients.
Her leadership extends beyond deal execution. Megan is an authority on corporate governance, securities law, ESG strategy and compliance, ensuring that her clients not only achieve their strategic objectives but do so with integrity and foresight. Her role in the firm’s Public Company Practice, Private Equity Group and Polymer Industry Team underscores her versatile expertise and ability to navigate diverse business landscapes.
Megan’s influence is further highlighted by her roles on the firm’s executive, professional development and finance committees, where she demonstrates a commitment to shaping the next generation of legal professionals and ensuring the firm’s operational excellence. Known for her ability to handle high-stakes, complex transactions, Megan exemplifies the spirit of a top dealmaker. Her innovative thinking, coupled with her dedication to her clients’ success, makes her a standout leader in the business and legal community.
Megan earned her J.D. from Case Western University School of Law. Her commitment to the community is reflected in her roles as chair of the Board of Trustees of Laurel School, long-serving board member of College Now Greater Cleveland, board member of Business Volunteers Unlimited, membership in In Counsel With Women and The 50 Club of Cleveland.
Megan’s exceptional track record and unwavering commitment to excellence make her a deserving recipient of ACG Cleveland’s Top Dealmaker’s Award.
2024-25 Officers and Board of Directors
EXECUTIVE OFFICERS
President Beth Haas, Cyprium Investment Partners
Past President Jay Moroscak, Aon
President Elect Tom Libeg, Grant Thornton
Executive Vice President, Annual Events Terry Doyle, Calfee
Executive Vice President, Branding
Peter Cavrell, Fortress Security Risk Management
Executive Vice President, Governance (Co-Chair) Charles Aquino, Edgepoint
Executive Vice President, Governance (Co-Chair) Mitch Gecht, Benesch
Executive Vice President, Innovation Ryan McGovern, Star Mountain Capital
Executive Vice President, Membership Dawn Southard, Team NEO
Executive Vice President, Programming (Co-Chair) John Allotta, BakerHostetler
Executive Vice President, Programming (Co-Chair) Nick House, Vorys
Executive Vice President Sponsorship
Ann Seger, Calfee
Treasurer Don Stanovcak, Plante Moran
At-Large
Tricia Balser, CIBC
Corrie Menary, Kirtland Capital Partners
Mark Heinrich, Plante Moran
BOARD OF DIRECTORS
Rob Cheffins, CIBC
Steve Danford, KeyBanc Capital Markets
Michael Fanous, PwC
Dave Fechter, Acchroma
Sarita Gavhane-Ritz, Edgewater Capital Partners
Matt Koleman, Deloitte
Mindy Marsden, Bober Markey Fedorovich
Craig Panzica, CIBC
William Parker, Parker Revenue Growth Strategies
Brandon Patton, Aon
Lizabeth Roth, Copper Run
Kevin Rozsa, Transtar Industries
Larissa Rozycki, Harris Williams
David Schindelheim, Jones Day
About this project
This section was produced by Crain’s Content Studio, the marketing storytelling division of Crain’s Cleveland Business, in collaboration with ACG Cleveland. For questions about this project or to participate in the future, please contact Crain’s Cleveland Business Sales Director John White at John.white@crain.com.
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MAY 22 8:30 a.m. to 10 a.m. ACG Akron: Spring Panel Event Buckingham, Doolittle & Burroughs
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