Mike McCarron sold MSM Transportation to the Wheels Group for $18.6 million. After receiving the letter of intent (LOI) he signed it immediately. If McCarron had the opportunity to do it all again he’d handle this request differently. Listen now and find out why.
Once the LOI is signed, the buyer knows they are now the only player at the table and can start dragging negotiations out, hoping to squeeze concessions out of the seller. However, McCarron had maintained some negotiating leverage because he knew what made the business attractive to his strategic acquirer. Find out how acquirers would view your business by getting your Value Builder Score.
About Mike McCarron
Mike McCarron is the president and founder of Left Lane Associations, a firm specializing in growth strategies, both organic and through M&A, in the transportation sector. McCarron is a 33-year industry veteran, entrepreneur and founder of MSM Transportation (est. 1990), which was sold to the Wheels Group in 2012. Under his leadership, MSM won numerous business awards including the Top Canadian Motor Carrier of the Year for seven consecutive years.
Over the past 25 years, McCarron has served on the board of directors of the Toronto Transportation Club, the Ontario Trucking Association, the Canadian Trucking Alliance and the National Transportation Brokers Association. He is a regular industry speaker and monthly columnist forToday’s Trucking magazine (Open Mike), where he was twice a finalist for the KRW Award for best regularly featured Canadian columnist. McCarron is also the former owner of the storied St. Michael’s Buzzers junior “A” hockey club (winner of 3 OJHL Championships under his leadership).
Some Highlights Of The Show
Business: MSM Transportation
1:40: “We were in the trucking business … part trucking company, part freight broker.”
2:50: “I started in the early 80s at Yellow Freight… I refused to transfer to the States.”
3:55: “I was more the face of the business, the strategist and the long-term thinker… He figured out how to make them work… We weren’t great friends but we certainly respected each other as business partners.”
5:00: Talking growth, cash and the ‘secret sauce’.
7:50: “We embraced this philosophy that good companies aren’t sold, they are bought.”
8:25: Click to Tweet: Critical Secret to @AceMcc success… a business that was sustainable without owner involvement.
10:50: A chance encounter.
12:08: “The biggest mistake we made was selling the LOI to early… Once it is signed all of the power goes to the buyer.”
13:42: “It’s like buying a house based on inspection… In retrospect you’re really agreeing to nothing, except the buyer pulls you off the market.”
17:15: “Make sure you have leverage when you [sell], without that leverage you are at a disadvantage as a seller.”
17:35: “What gave us the leverage is that we didn’t need to sell. [There were no] dreaded Ds, no death, divorce, disease, disability… We had a business that was sustainable and scalable without us.”
21:52: “There developed a very serious dislike between Bob, our CEO, and their accounts person… Frankly, it almost killed the deal.”
22:30: Selling the real estate separately.
24:20: “We had to make the announcement to my staff after the [stock] market had closed.”
24:47: “The first thing I thought of was, ‘What’s next?’”
25:30: “We were always really upfront with our employees… we told them right from the start what was going on… We didn’t want to lie to our employees… It was bitter sweet. There were a lot of tears from a lot of people… They weren’t surprised; they were involved very early.”
28:01: 6X EBITA and $3 million in extra cash.
32:20: “When they went public they never performed well as a company… They never posted significant gains in the stock; then they ran into the situation where cash was tight… Then they did the right thing and sold.”
34:48: “[The sale] had very little impact on my life…”
35:15: “This was not my life; it was just a job that I happened to own.”
36:50: mike@leftlaneassociates.ca | @AceMcc | @LeftLaneAssoc
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Article LINKFor additional information regarding Florida business sales, acquisitions and valuations, please contact Eric J. Gall at Eric@EdisonAvenue.com or 239.738.6227. Also, visit our Edison Avenue website at www.EdisonAvenue.com.
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