Mergers and Acquisitions Explained – Rick Schwartz [RR 668]

As co-founder of Schwartz Advisors, Managing Partner Rick Schwartz specializes in working with clients on strategic planning, growth, performance improvement and M&A strategy related to the motor vehicle aftermarket. Rick is a recognized leader in the aftermarket and has a critical eye for what it takes to drive value.  He is the lead Schwartz Advisors partner in support of projects with private equity firms, boards of directors and management teams. Rick is a Trustee of the University of the Aftermarket Foundation and a member of the Auto Care Association Board of Directors. He is a recipient of the prestigious Northwood University Automotive Aftermarket Management Education Award. Prior to starting Schwartz Advisors, Rick held various senior level positions at Nestle, Macy’s and The Upper Deck Company. Rick received an MBA from the University of Southern California Marshall School of Business and a BA in International Relations from USC. Key Talking Points What is going on in overall M&A – not just the aftermarket- Many of the investment bankers are reporting record deal flow. A few key factors driving the abundance of M&A deals- catch up to deals that were put on hold in 2020. Excess “dry powder” (cash)- financial buyers (private equity firms & family offices) had an abundance of capital ready to deploy last year. Potential tax changes- the change in political administrations in the U.S. has caused concern among business owners that the capital gains tax will increase substantially upon exit. Low-interest rates- easier for buyers to finance acquisitions  The aftermarket has slow steady growth- making it appealing to private equity  Business owner- opportunity to cash out and next owner could do a lot to recruit, market, and grow.   Why are some family-owned businesses selling? Timing – it is time to exit, (not related to the economy), competition, diversify personal investments and net worth, concern about changes in the tax code How long will the current M&A