The M&A Source Podcast

By: M&A Source
Listen for free

  • Summary

  • If you work in the business of buying, growing, or selling businesses, this is the podcast for you! Welcome to the M&A Source Podcast, a podcast brought to you by M&A Source, a non-profit professional organization that provides training and education for small to mid-size business mergers and acquisitions intermediaries. In each episode of the podcast, we will interview leaders in the M&A world to discuss education opportunities provided by M&A Source, trends in M&A Markets, and useful insights provided by the experts that use them. Learn more about the podcast and the organization at M&A Source's website: www.masource.org.
    Copyright 2024 MASource Podcast
    Show more Show less
activate_Holiday_promo_in_buybox_DT_T2
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. ...
    Show more Show less
    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

    Share your origin story

    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.
    Show more Show less
    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...
    Show more Show less
    1 hr and 14 mins
Leadership Economics
Show more Show less

What listeners say about The M&A Source Podcast

Average customer ratings

Reviews - Please select the tabs below to change the source of reviews.

Audible.com reviews

Amazon reviews
No Reviews are Available