Episodes

  • Cross Border Accounting with Katrina Nacci

    Cross Border Accounting with Katrina Nacci
    Aug 27 2024
    Links:Visit the Show: https://podcast.masource.org Become a member or register for a class or event: https://masource.orgSummary of this EpisodeIntroduction to US GAAP and its importance for companies expanding into the US marketKey differences between US GAAP, UK GAAP, and IFRSThe process of converting from UK GAAP to US GAAPCompliance requirements and auditing considerations for US GAAPPreparing for fundraising rounds with US investorsChallenges and common issues faced during the conversion processStrategies for effective knowledge transfer and ongoing US GAAP supportTopic DiscussedIntroduction to US GAAP and its importance for companies expanding into the US marketThe discussion began with an introduction to US GAAP (Generally Accepted Accounting Principles) and its significance for companies looking to expand into the US market. Katrina Nachi, a cross-border accounting advisor, highlighted that companies often face challenges when entering the US market due to differences in accounting standards and regulations. Understanding and complying with US GAAP is crucial for companies seeking US investors, acquiring US companies, or planning an IPO in the US.Key differences between US GAAP, UK GAAP, and IFRSKatrina explained the key differences between US GAAP, UK GAAP, and IFRS (International Financial Reporting Standards). While IFRS and US GAAP are becoming more aligned, there are still nuances, particularly in areas such as revenue recognition, capitalization of costs, and share-based compensation. UK GAAP, on the other hand, has more significant differences from US GAAP, especially in terms of what can be capitalized.The process of converting from UK GAAP to US GAAPKatrina outlined a three-phase process for converting from UK GAAP to US GAAP:1. Qualitative assessment: Identifying differences in accounting policies and creating a matrix comparing current policies under UK GAAP with suggested US GAAP policies.2. Quantitative assessment: Adjusting calculations and schedules to reflect US GAAP requirements and quantifying conversion adjustments.3. Financial statement preparation: Preparing financial statements and footnote disclosures under US GAAP, incorporating conversion adjustments.Compliance requirements and auditing considerations for US GAAPThe discussion covered the additional compliance requirements and auditing considerations when adopting US GAAP. Companies may need to undergo a US GAAP audit, which typically involves a lower materiality threshold and more thorough walkthroughs and control testing. The timing of audits and potential overlap with local audits were also discussed.Preparing for fundraising rounds with US investorsKatrina emphasized the importance of being proactive in preparing for fundraising rounds with US investors. Presenting a qualitative assessment of US GAAP differences and potential conversion adjustments can demonstrate an understanding of the requirements and facilitate due diligence processes. This can potentially broaden the range of investors available to the company.Challenges and common issues faced during the conversion processSeveral challenges and common issues were discussed, including:- Lack of documentation and messy calculations under current GAAP, making the conversion process more difficult.- Determining the appropriate retrospective period for conversion, which may depend on the intended use of the financial statements.- Ensuring knowledge transfer and ongoing support for the local finance team to maintain US GAAP reporting after the conversion.Strategies for effective knowledge transfer and ongoing US GAAP supportKatrina highlighted the importance of effective knowledge transfer and ongoing support for the local finance team. She suggested exploring options such as working with a fractional Chief Accounting Officer or leveraging external advisors for specific transactions or new accounting standards. This approach can provide access to US GAAP expertise while enabling the local team to maintain day-to-day reporting.ActionsFor companies considering US expansion or fundraising with US investors:Document current accounting policies and procedures under local GAAP. Responsible: Finance Team, OngoingAssess the qualitative differences between local GAAP and US GAAP. Responsible: Katrina Nachi or other US GAAP advisor, Prior to fundraising/expansionEngage with auditors to align on the conversion process and required documentation. Responsible: Finance Team, Prior to conversionFor companies undergoing a US GAAP conversion:Develop a detailed conversion plan, including quantitative assessments and financial statement preparation. Responsible: Katrina Nachi or other US GAAP advisor, Prior to conversionEnsure knowledge transfer and training for the local finance team on US GAAP reporting. Responsible: Katrina Nachi or other US GAAP advisor, During and after conversionExplore options for ongoing US GAAP support, such as a fractional Chief Accounting Officer. ...
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    1 hr and 4 mins
  • Essential Business Performance Metrics for M&A Advisors

    Essential Business Performance Metrics for M&A Advisors
    Jun 27 2024

    Show notes: https://podcast.mesource.org

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    In this episode of the M&A Source podcast, Dave Dejewski dives deep into essential business performance metrics that significantly impact business valuation and success. Dave discusses key metrics such as EBITDA, employee activity ratios, and cash flow ratios, providing insights into their importance and how to leverage them for better client guidance. He shares practical examples from client experiences and offers a comprehensive worksheet of various metrics for M&A professionals.

    The episode discusses the importance of understanding and analyzing key business performance metrics in the M&A process, emphasizing on metrics like sales per employee, employee turnover rate, and operating cash flow, and offers a comprehensive worksheet with various valuation ratios and metrics to better guide clients and position oneself as an expert.

    David emphasizes the value of presenting oneself as an expert by having in-depth knowledge of these metrics and being able to have meaningful conversations with sellers and buyers. By analyzing these metrics, M&A advisors can drive improvements, increase the value of the businesses they represent, and remove friction from the transaction process.

    The offer of a worksheet with 56 different valuation ratios, sector-specific ratios, profitability ratios, operational metrics, and more is a valuable resource for M&A professionals to incorporate into their practice and better serve our clients.
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    25 mins
  • Business Valuations with Shelia Darby

    Business Valuations with Shelia Darby
    May 8 2024
    Visit us at https://podcast.masource.orgIn this episode, Shelia Darby, Managing Director of Bizworth, discusses the importance of accurate business valuations in M&A transactions, the different valuation methodologies, challenges in valuations, best practices and ethical considerations, and the value of partnering with valuation professionals.Resources Discussed in this EpisodeAswath Damodaran resources on valuation and corporate finance: https://pages.stern.nyu.edu/~adamodar/Business Reference Guide: https://businessreferenceguide.com/Vertical IQ: https://verticaliq.com/Deal Stats: https://www.bvresources.com/products/dealstatsBiz Comps: https://bizcomps.com/ValueSource: https://www.valusource.com/Peer Comps: https://peercomps.gvalue.com/Pitchbook: https://pitchbook.com/Brokerage Simplification Act Info: https://masource.org/resources/legal-updates/Topic DiscussedStructure and SummaryThis episode features an interview with Shelia Darby, Managing Director of Bizworth, who has over 25 years of experience in business valuations. The discussion covers the following key sections:Introduction and Background Shelia shares her background, starting in the corporate world at companies like Enron and transitioning to the middle market and Main Street valuations. She discusses her certifications and the importance of continuous learning.Importance of Accurate Business ValuationsShelia explains why accurate business valuations are critical for both buyers and sellers in M&A transactions, helping to close more deals and avoid leaving money on the table.Valuation MethodologiesThe three main valuation approaches are discussed: asset approach, market approach, and income approach. Shelia dives into the details of each approach, common methods used, and when to apply them.Special Circumstances and ChallengesVarious special circumstances and challenges in business valuations are explored, including non-operating assets, intangible assets, regulatory impacts, distressed businesses, and rapid growth or volatile businesses.Best Practices and Ethical ConsiderationsShelia shares best practices for valuations, emphasizing transparency, honesty, and using reputable sources. She also discusses ethical considerations, drawing from her experience on the Ethics Oversight Board of NACVA.About BizworthShelia provides information about her company, Bizworth, and the valuation services they offer to support M&A advisors and business brokers.Questions/AnswersThroughout the interview, several questions were asked and answered:Q: How did you get into the business of valuations, and what drew you to it as a career?A: Shelia started in the corporate world at companies like Enron, working in valuation groups. She transitioned to Main Street and middle market valuations in 2014, finding it more appealing.Q: Why is an accurate business valuation critical for both the seller and the buyer in the M&A process?A: Accurate valuations help close more deals, avoid leaving money on the table, and identify gaps early on.Q: What are the different valuation methodologies, and what should M&A advisors consider when looking at them?A: The three main approaches are asset, market, and income. Sheila explains each approach, common methods, and when to use them.Q: What are some common challenges you come across when valuing businesses, particularly in the small and medium enterprise area?A: Common challenges include non-operating assets, intangible assets, regulatory impacts, distressed businesses, and rapid growth or volatile businesses.Q: What are your thoughts on best practices and ethical considerations in valuations?A: Best practices include transparency, honesty, and using reputable sources. Ethical considerations involve operating with integrity, avoiding conflicts of interest, and staying in your lane.5 Best QuotesValuable QuotesHere are five valuable quotes from the interview:"If you don't get a proper accurate valuation, you're leaving money on the table. First of all, you're not closing as many deals as you can, right you're not identifying as early on as possible if there's gaps."Shelia Darby, on the importance of accurate valuations"Honesty is the best policy. Transparency is crucial. It doesn't matter if you're an M&A advisor, an attorney supporting an M&A advisor, CPA, or evaluation professional honesty is the best policy transparency.”Shelia Darby, on best practices"Make sure you're not making things up you're not feeling your way through everything it's one thing to have an intuitive gut. We all want to listen to our gut, but back it up with facts."Shelia Darby, on best practices"If you're going to spend a lifetime building up your reputation, don't lose it in 5 minutes that's that's the standard there, that you're going to have a long plus, very plus, you know, very you have lots of prosperity in your field if you just abide by those."Shelia Darby, on maintaining a good reputation"It's OK to say you have a valuation professional supporting...
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    1 hr and 14 mins
  • Beyond Numbers: Unveiling the Tax Puzzle in M&A Transactions with Roman Basi

    Beyond Numbers: Unveiling the Tax Puzzle in M&A Transactions with Roman Basi
    Mar 28 2024
    In this enlightening episode of the M&A Source Podcast, we dive deep into the world of taxes, a topic often deemed tedious but undeniably crucial within the mergers and acquisitions sector. Our distinguished guest, Roman Basi, an attorney, CPA, and multifaceted professional, unveils the intricate dance between tax legislation and M&A activities. With expertise spanning several states and a multitude of professional licenses, Roman brings a wealth of knowledge and practical insights to our listeners. From the significant implications of capital gains tax adjustments and corporate tax changes to the nuances of depreciation, amortization rule changes, and international tax policies, this episode covers the vast landscape of tax considerations that M&A advisors and business owners must navigate. Roman's unique blend of legal, financial, and real estate expertise, combined with personal anecdotes and a passion for education, makes for an engaging discussion that not only enlightens but also empowers our audience with actionable knowledge. Join us as we explore the critical impact of taxes on the outcome of M&A transactions, learn from Roman's vast experience in the field, and discover how to leverage tax strategies for successful business deals. Whether you're an M&A professional, business owner, or simply intrigued by the complexities of tax laws, this episode is packed with valuable insights and stories that illuminate the often-overlooked aspects of taxes in the business world.
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    1 hr
  • Spring 2024 Conference Overview

    Spring 2024 Conference Overview
    Mar 11 2024
    Register and find the agenda here: https://snip.ly/2024_MA_conference Visit Show Notes here: https://podcast.masource.org/spring-2024-conference-overview/ Visit MASource.org In this short community update, hear from Kathlene Theil, our 2024 Conference Chair as she explains our agenda and what you can expect from this Spring conference.
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    6 mins
  • 2024 M&A Source Member Benefits with Russell Cohen

    2024 M&A Source Member Benefits with Russell Cohen
    Jan 15 2024

    Visit the show notes at https://podcast.masource.org

    Visit M&A Source at https://masource.org

    In today's episode of the M&A Source Podcast, we discuss the myriad benefits that M&A Source offers to its members with Russell Cohen, an M&A advisor and board member for M&A Source. Russel is also the chairman for the membership benefits committee.

    Russell and David cover a wide range of topics, from exclusive discounts on essential services like insurance and data room solutions to access to valuable tools that are crucial for any successful M&A advisor. Russell shares his personal experiences and success stories, highlighting how these benefits have positively impacted his professional journey.

    We also touch on the importance of the M and A Source community in fostering connections and sharing knowledge within the M&A world.

    Whether you're an experienced advisor or just starting, this episode is a treasure trove of information on how being a part of M&A Source can elevate your practice in the competitive world of mergers and acquisitions.

    Resources Mentioned in the Show:

    • Membership Benefits: https://masource.org/membership/benefits/
    • Vertical IQ: https://verticaliq.com/ (regularly $100 / mo or $125 per report - Free to members)
    • Private Equity Info: https://privateequityinfo.com/
    • VaultRooms (data rooms): https://vaultrooms.com/ (free with membership)
    • DealRelations (CRM): https://dealrelations.com/ (member discount)
    • Digital Wow (Web, Social Media, etc): https://www.thedigitalwow.com/masource
    • ValueCraftz: http://www.valuecraftz.com/ (member discount)
    • ClientsIO (email lead generation): https://clientsio.com/ (two months free)
    • Sourcescrub (private company research): https://www.sourcescrub.com/ (50% off)
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    53 mins
  • Anatomy of a Purchase Agreement with Matt Bowles

    Anatomy of a Purchase Agreement with Matt Bowles
    Oct 16 2023

    Welcome to our latest episode of the M&A Source Podcast. In this episode, we dive deep into the world of Purchase Agreements with our esteemed guest, Matt Bowles, an attorney at Hogan Lovells. Here's what you'll discover in this insightful discussion:

    1. Introduction to Purchase Agreements: We start by exploring why purchase agreements are more than just documents. They are crucial tools in M&A transactions, impacting everything from payment to maintaining tranquility in post-deal activities.
    2. Expert Insight: Matt Bowles brings his extensive experience with purchase agreements to the table, offering in-depth knowledge for both beginners and veterans in the M&A space.
    3. Anatomy of a Purchase Agreement: Delve into the structure of purchase agreements. We discuss key components such as economic terms, representations, warranties, covenants, and closing conditions.
    4. Real-World Applications: Listen to real-world scenarios from Matt's experience, demonstrating the practical application and importance of purchase agreements in various M&A situations.
    5. Role of Intermediaries and Attorneys: Understand the crucial roles that intermediaries and attorneys play in the M&A process, particularly in relation to purchase agreements.
    6. M&A Stories: Matt shares stories from his career, illustrating both successful and challenging M&A deals, and how purchase agreements played a role in these.
    7. Educational Focus: Whether you're new to M&A or a seasoned professional, this episode provides valuable insights into the complex world of purchase agreements.
    8. Final Takeaways: We wrap up with key learnings and advice for M&A professionals, emphasizing the importance of understanding and effectively utilizing purchase agreements.

    Join us in this enlightening conversation and enhance your understanding of the critical role of purchase agreements in M&A transactions. Whether you're a business owner, intermediary, or legal professional, this episode offers valuable insights for all.

    Additional Resources:

    • Matt Bowles' LinkedIn Profile
    • Hogan Lovells Website
    • M&A Source Website for Further Learning and Networking Opportunities

    Connect with Us:

    • Visit our Website: https://masource.org
    • Follow us on LinkedIn/Twitter/Facebook
    • Subscribe to our podcast for more insightful episodes

    Don't forget to leave us a review if you found this episode valuable!
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    59 mins
  • Working Capital with Ryan Hurst

    Working Capital with Ryan Hurst
    Jul 13 2023

    In this episode of the M&A Source Podcast, host Dave Dejewski is joined by Ryan Hurst, an expert in financial consulting, to discuss the complexities and significance of working capital in mergers and acquisitions.

    Key Highlights:

    Ryan Hurst's Background: Ryan shares his journey from growing up in a family-owned business to his current role in financial consulting, focusing on helping business owners broaden their perspectives on their companies' potential.

    Understanding Working Capital: The episode delves into the multifaceted nature of working capital in M&A transactions. Ryan explains the varying interpretations across different sectors like accounting, valuation, and transaction advisory.

    Real-World Scenarios: Ryan provides three compelling case studies, each highlighting different aspects and challenges of working capital in M&A:

    • A Complex Transaction: A $60-70 million deal with inventory and project completion issues.
    • A Typical Scenario: A $30-40 million consumer products deal illustrating common working capital challenges.
    •   An Ideal Transaction: A smooth $50-60 million construction-oriented company sale, demonstrating the benefits of thorough preparation and clear communication.

    Advice for M&A Intermediaries: The importance of early preparation, understanding working capital, building trust, and staying informed about industry trends is emphasized.

    Connecting with Ryan Hurst: Listeners interested in Ryan’s expertise can reach him through RKL’s website, LinkedIn, or his email. See his bio and contact info here.

    ---

    *This podcast is brought to you by M&A Source, a nonprofit organization dedicated to the professional development of mergers and acquisitions intermediaries. For more information, visit [M&A Source](www.masource.org).*
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    51 mins