Articles
- Articles
- Podcasts
Latest Article
The Role of an Independent Sponsor
In this episode, we’re taking a look at a unique independent sponsor’s M&A strategies. My guest Bakari Akil is the founder of Graves Hall Capital, which seeks to buy and run businesses where owners and founders are seeking an exit. Bakari will share his M&A journey and advice for enticing a seller to do business with you. He’ll also cover: Why he believes buying companies is the best wealth building strategy What types of companies he’s looking for The role of reps & warranties insurance And more Mentioned in this episode: http://graveshallcap.com https://linkedin.com/in/bakariakil Transcript Patrick Stroth: Hello there. I’m Patrick Stroth, trusted authority in executive and transactional liability and founder of Rubicon M&A Insurance Services, now a proud member of the Liberty Company Insurance Broker Network. Welcome to M&A Masters, where I speak with the leading experts in mergers and acquisitions, and we’re all about one thing here. That’s a clean exit for owners, founders and their investors. Today I’m joined by Bakari Akil, founder of Graves Hall Capital. Based in New York, Graves Hall seeks to buy and run businesses, where owners and founders are seeking an exit. And we recently had an article from Bloomberg about search funders. There’s been information about other types of buyers such as independent sponsors, so I thought it’d be great and ideal to have Bakari, who is out there in the market right now, come and join us. Bakari, great to have you. Thanks for joining us today. Bakari Akil: Thank you very much, Patrick. Patrick: Now, before we get into Graves Hall, let’s talk about you. What brought you to this point in your career? Bakari: Sure. So I am the founder of Graves Hall Capital. Graves Hall is effectively an independent sponsor. We bought companies, we’ve done a couple of
The Next Evolution in Representations and Warranty Insurance
An exciting innovation is coming to Representations and Warranty insurance world, and if you’re a Buyer or Seller in the lower middle market, you need to know about it. This new product is especially useful to serial acquirers. In short: insurtech is coming to M&A… sort of.
M&A Trends for the Rest of 2022 and into 2023
Inflation, a rise in interest rates, and global unrest and uncertainty represent some serious headwinds for the economy right now. But the consensus, from my sources in the M&A world is that dealmaking for the lower middle market has not faltered and will not falter going into the next year. Granted there has been a decrease in the pace of M&A activity when you compare 2022 to 2021, but that’s not a far comparison, as last year we saw record-breaking deal-making thanks to pent-up demand for deals as we emerged from the pandemic. As PricewaterhouseCoopers put it in their Deals
TLPE Insurance and Non-Disclosure Policies
Transaction Liability Private Enterprise insurance (TLPE) is taking the lower middle market M&A world by storm. Unlike traditional R&W insurance, TLPE is a Sell-Side policy where the Seller, rather than the Buyer, is the policyholder. The policy is triggered when the Buyer makes a claim against the Seller. Instead of going after the Seller directly, the Buyer simply collects from the insurer. Sellers benefit from this insurance as well, with TLPE effectively reducing escrow levels in deals from 10% to 1% of the purchase price. (The cost of TLPE is only $10,000 to $20,000 per $1M in Limits.) You can
Current Trends in M&A Add-Ons
Globally, M&A activity so far has declined 23% in 2022 compared to 2021. Yes, that is a significant drop. But, as I wrote in a previous article, you must consider that 2021 was a historic record-breaking year of deal-making. So, in a sense, 2022 has been somewhat of a return to normal. That said, while worldwide M&A activity has declined, what we’ve seen in the U.S. is little or no decline in deal-making. It’s essentially “flat.” This is largely because of the increasingly common practice of purchasing “add-ons” instead of platform companies.
Legal Diligence Reports and R&W Insurance
I’m helping a first-time client place Representations and Warranty (R&W) insurance, and it’s taking a bit of hand-holding on this first go-around as we get quotes from insurers and review other elements of the process. We should all keep in mind that the primary thing Underwriters want to see is thorough due diligence. Otherwise, they are going to be a lot of exclusions in the policy.
It’s Never Too Late for TLPE
It’s Never Too Late for TLPE I was at a conference recently talking with an M&A advisor. One of his clients sold his RV park for about $10M a few months prior. But, he was getting nervous that he has money withheld from the purchase price, in escrow, in case of a breach of the purchase and sale agreement.
A Look Back at 2022 Q1 M&A Activity
As we exit the first quarter of 2022, all the buzz is around the slowdown in M&A activity. It’s true that deal activity in the beginning of 2022 is a drop from Q4 2021, as well as a drop compared with Q3, Q2, and Q1 of 2021 because there was so much pent-up activity as pandemic closures waned.
Case Study: A Strategic Buyer and TLPE Insurance
Case Study: A Strategic Buyer and TLPE Insurance It took years for Representations & Warranty insurance (R&W) to gain the trust of the M&A community. For years, lawyers argued that nothing was more sure than cold- hard cash sitting in an escrow account. But PE firms, seeing the value of R&W’s ability to successfully transfer risk at a reasonable cost propelled the use of R&W to where it’s present in far more deals than not.