Selling a Construction Company: M&A, Quality of Earnings, and What Buyers Really Care About (with Helana Huddleston & Tyler McCrary)

Rishi Srivastava (00:41)
Today, our guests are Helana Robbins Huddleston and Tyler McCrary. Both of you, welcome.

Tyler McCrary (00:51)
Thanks, Rishi.

Rishi Srivastava (00:51)
The first segment is about setting the stage. For a construction owner listening who has never bought or sold a company, how do each of you describe what you do in few sentences? What’s your role in a deal?

Tyler McCrary (01:09)
Sure. So I’ll start and let Helana weigh in as well. So I work for a firm called VRA Partners and we are an investment bank and

really our core focus is on advising business owners when they’re looking to either sell their business or in certain situations to buy a business. at its real core, our job is to help business owners maximize the value and the certainty to closing a deal if they’re selling. If they’re buying, it’s to help them make sure they fully understand any of the potential business risk associated with an acquisition, how to think about the value of that acquisition. And again,

how to increase the certainty of closing that transaction. And we work with business owners in those situations from pre-deal getting ready all the way until the deal documents are signed and the wires are sent and the transaction is closed.

Helana Robbins Huddleston (02:02)
And.

And so Tyler and I are very complimentary. I work at Cohn Reznick Advisory LLC. It’s an accounting consulting firm. I do work on the consulting side and I work in the transaction group and do quality of earnings. And so what that means is if a company is selling their business, a family, an entrepreneur will help make sure that their earnings are correct and that the valuation based on those earnings is as high as possible.

Tyler McCrary (02:03)
Thank

Helana Robbins Huddleston (02:28)
and also that it’s a very clean transaction so when they go to market it runs smoothly. And then we also work on the buy side similar to Tyler’s so if investor wants to buy a company outright or just wants to do a minority interest we will review the company financials that they’re looking at make sure that the earnings are correct so that the valuation is right.

Rishi Srivastava (02:47)
You guys both work at different stages of the deal.

Tyler McCrary (02:50)
Yes, and I would add that, you know, our my role and our team’s role is to help, I would say, quote, quarterback a lot of the process for.

the business owners and we’ve been fortunate to work with Helana and her team on multiple transactions both on the sell side and on the buy side. And she’s a great example of other advisors that are really critical to helping a process go smoothly and again, maximizing valuation or fully understanding risk and increasing certainty to closing. so, know, on our a lot of times business owners will maybe begin

a conversation with our firm about selling the business, but then we’re looking at advising them on bringing in folks like Helana and her team, especially in an industry like this where we’ve worked on a lot of deals together, to make sure that it goes smoothly. You only do a transaction like this typically once and you want it to go well and you want to maximize the opportunity for what the business owner has has built.

Helana Robbins Huddleston (03:37)
Thank

Rishi Srivastava (03:49)
takes a village to raise a child.

Helana Robbins Huddleston (03:51)
Yeah.

Tyler McCrary (03:51)
Yes.

Rishi Srivastava (03:53)
When you compare construction deals to other industries you work in, what makes construction services and the trades harder or more unique from a deal perspective?

Helana Robbins Huddleston (04:04)
So I can speak from the accounting perspective primarily and construction, you always hear what’s called percentage of completion because so many jobs in construction, that’s how revenue is recognized based on the cost incurred, what you project the cost to be and then you recognize revenue over time. right, you do your best at estimating what those costs are going to be, but there’s always changes. There’s, know, sometimes there’s change orders and obviously then everything increases, but sometimes it’s just change in estimates.

and that will make your revenue a little volatile in the recognition. And so when an investor comes in, they want to smooth all that out. So a lot of times what we do is a look back analysis. So that’s a common term in the industry, but that will definitely change what you thought was your revenue and earnings to what it is now based on just understanding all those deals that are closed and even the ones that you’re working on, know, truing up those estimates. So I think that’s a very big nuance with the construction industry that really does

change valuations a fair amount. And then the other thing I would say with construction industry where I see that more than any of the other industries I deal with is just the relationships. Construction is such a relationship business. And so it’s really important to understand, you know, the people that will stay on post transaction, or if you’re keeping the owners for a period of time, just understanding how you’re going to make those transitions so that those relationships stay intact with not only your customers, but also your subcontractors.

if you’re using them because again you need them to get the deals done. those are all important things that are very to me unique in the construction industry.

Tyler McCrary (05:39)
Yeah, and I would echo what Helana said on the financial side and just the nuances of construction.

compared to a company that sells a widget and they sell that widget for this amount of money and it costs this amount of money and it’s pretty clean and easy. It’s very different, especially when you get into certain sectors where you have big projects that last over long periods of time. And that’s just a nuance that I think personally for me and Helana probably should the same make our jobs that much more interesting because of that nuance and because of explaining that to buyers.

and it makes it a little bit more fun, but definitely trickier. The one other thing I would add to Helana’s list also would be within the construction industry, like labor and the importance of labor and the access to labor is critically important. And one of the things I’ve loved seeing with the construction companies that we work with is a lot of businesses where you have multi-generation employees at those companies. It seems to be an industry where,

Helana Robbins Huddleston (06:35)
.

Tyler McCrary (06:38)
Granddad started the business, dad went to go work there, son now works there. And you don’t see that in

lot of industries and it’s something that you still see, at least I’ve seen with a lot of construction businesses we’ve worked with. again, labor, access to labor, the people on the job doing the work, all really important things that, you know, we’ll talk about this more later, but that buyers will be really interested in and that’s again, a bit nuanced for this sector.

Helana Robbins Huddleston (07:03)
Well,

Rishi Srivastava (07:03)
Yeah,

actually, I’m good.

Helana Robbins Huddleston (07:03)
and Tyler, I was just gonna tell you, you also have to then handle the family dynamics. And so again, Tyler, and we help sometimes with that as well, just right different, they have different desires, different wants. And so you got to manage that during a process.

Rishi Srivastava (07:10)
Hmm.

Mm-hmm.

Tyler McCrary (07:19)
Yeah, good fun.

Rishi Srivastava (07:20)
We are a construction accounts payable automation software. A lot of our customers are actually husband and wife running construction companies. It’s a very interesting industry.

Helana Robbins Huddleston (07:31)
Peace.

Tyler McCrary (07:32)
Yeah. Yeah.

Helana Robbins Huddleston (07:33)
Dinoic.

Tyler McCrary (07:34)
There’s some

really phenomenal stories that have taken place in the industry that are start as family owned businesses, have multiple family members involved and they grow it well in excess of what they ever dreamed of. again, really neat stories. That’s where we spend a lot of our time and it’s a lot of fun. I have a client right now that’s like sixth generation in the industry. And so it is a unique aspect that you don’t necessarily see.

Rishi Srivastava (07:58)
Wow.

Tyler McCrary (08:04)
across other sectors.

Rishi Srivastava (08:06)
Tyler, what are you seeing in the construction M&A market today? Deal volume, valuations, and which types of contractors, site work, trades, service versus project-based, et cetera, are most in demand?

Tyler McCrary (08:24)
So if I look at, if I think about a broad spectrum of different companies providing various construction services, trade services.

the highest demand for companies is going to be those providing some type of recurring type of service. So they show up on site again and again, maybe it’s contracted service. It’s some type of trade related. We had a transaction last year specifically within the generator services space. They came and they did return routine maintenance and then they also did sort of engineering project based work.

Helana Robbins Huddleston (08:49)
you

Tyler McCrary (08:57)
lots of demand for that, lots of demand for the recurring service.

And then you kind of go to the next step where you’re in sort of like more renovation, replacement, repair type of work. Projects get a little bit bigger. Maybe there’s a little bit more risk to that project. And so I would say the demand from a buyer standpoint ticks down slightly because of that additional risk. And then big projects, long projects, capital intensive businesses, that’s probably where buyers, there’s the least demand. But I’ll say from my perspective,

Helana Robbins Huddleston (09:25)
Mm.

Tyler McCrary (09:28)
that over the past couple years, I’ve seen the demand for those types of businesses start to grow. And I think in particular,

Helana Robbins Huddleston (09:31)
the deck. Thank you.

Tyler McCrary (09:36)
Some things that are attractive is that businesses doing that type of work, complex, big projects, customers are really relying on them to do a good job. Small things go wrong, can create big issues. And so I think buyers, both strategics and private equity firms are seeing more value to buying companies doing that type of work and the demand for that

type of transaction is growing. I think that the

what you really sort of focus in on is

What really truly differentiates a company, and that can be a company that from the outside looks like that it’s straightforward work. Guys on a big piece of property driving a bulldozer and grading a site. But at large scale and complex projects, it’s become super critical work and buyers are seeing that. So again, I think traditionally the highest demand is

Helana Robbins Huddleston (10:07)
.

Tyler McCrary (10:31)
for companies that are doing high level of recurring maintenance type of trade services. Lower demand for those doing big projects, new construction, build some cyclicality risk. But we are seeing demand for those types of transactions growing and we’ve done a number of those over the past year.

Rishi Srivastava (10:49)
Actually, even in software business investors love recurring revenue.

Tyler McCrary (10:53)
Yes. Yeah.

Helana Robbins Huddleston (10:53)
Yeah.

Rishi Srivastava (10:54)
The next segment here is how a deal really works. If I am a contractor thinking quote unquote, maybe it’s time to sell in the next year or two, what does the journey actually look like from first conversation to money in the bank? What are the big phases and where do each of you plug in along that timeline?

Helana Robbins Huddleston (11:09)
Okay.

Tyler McCrary (11:18)
So I’ll start and I’ll let Helana weigh in and I’ll sort of caveat some of this and that it’s all a little bit different. But if I’m a business owner and I’m trying to wrap my head around this process and how I get started, you know, we always tell business owners that it’s hard.

Helana Robbins Huddleston (11:19)
.

.

Tyler McCrary (11:34)
The first step is getting ready and sometimes that’s the most critical step. And that’s really before you start doing any work to quote, sell the company. It’s getting organized around your legal documentation. It’s getting organized around your financial reporting. Because as you get into a process and you start

having conversations with a buyer and they’re really serious and then at the table, you’ve built a lot of momentum. And all of sudden, if that momentum starts slowing down because you can’t

give them your financial update in a timely manner, or you can’t find all the contracts that you’ve signed that they want to review. It slows the deal down and it creates a lot of tension in getting a deal closed. And so a lot of that risk you can mitigate at the beginning by really preparing.

A key part of that preparation phase is getting Helana and her team involved and making sure that your financials are reported in a way that are consistent with how the company or the buyer would want to see them. And frankly, she can talk a little bit about this, identifying what we would call ad backs, EBITDA ad backs that are non-normal, could be some family member that’s not really involved in the business, that’s on the payroll, could be personal expense

Helana Robbins Huddleston (12:21)
. .

Tyler McCrary (12:46)
could be a lot of things that ultimately increase the earnings that someone’s going to pay you for. that can take, you know, four weeks, that can take four months, that can take 12 months. We always say there’s not really, it’s never too early to start preparing for a transaction, but that’s the critical phase. Then I would tell people once you’re prepared and our team starts the marketing process,

Helana Robbins Huddleston (12:52)
Okay. Okay.

Tyler McCrary (13:09)
You should probably plan for four to six months from that point until cash in the bank on average. So I’ll stop there. I can talk about some of the other stages, but maybe Helana, you weigh in on maybe some of the prep work that your team helps with.

Helana Robbins Huddleston (13:15)
Mm-hmm.

So

yeah we always usually come in after Tyler investment bankers are been really great to us and bringing us in because again they want their clients do as well as possible. We come in and anyone that is on this listening to this has been through an audit is similar to that unfortunately we give you a request list and we you know get trial balances and go through your analysis. But what I always say and Tyler kind of touched on this right. What we do could take four weeks or it could take.

multiple months and that’s because we go at their pace. We completely understand they’re running a business and that this is another additional project added to them and so you being able to get on calls with us or give us data may take some time. Again the good thing about doing all of this up front is that when you do go into market and Tyler’s marketing your company investors are interested

We have this wonderful package to give them that has all the financial information they’re going to ask for a majority of it. Hopefully like Tyler said, the contracts are ready. Everything’s prepared so that you’re not overwhelmed, especially if you’re dealing with multiple buyers, which is always the idea, right? You’re dealing with multiple requests, multiple buyers. It can be very overwhelming. So again, all this preparation is to make it so you’re not overwhelmed. You’re well prepared.

you go to market and it’s a very smooth, successful transaction. So we’re all partners. We actually stay through the entire process as well. I’ve been helping my clients to close and then even after close when they’re doing certain dynamics of a deal like true ups and whatnot. We’re there until it is completely finished and everything is successfully done.

Tyler McCrary (15:03)
Yeah, and so, you know, we talked a lot about preparation phase.

let’s you’ve gone through all that you’re ready to go. Our team is going to start the marketing phase. And that’s where you know we are with the support of the client identifying who all the potential buyers are both private equity firms as well as other companies strategic buyers. And then our team is going out with materials that we will have created with the support of the client. And we’re having those discussions with those potential buyers. So a lot of work on our team

try to let the client as much as possible focus on running the business. That allows us to run a process that includes a good number of buyers. We were definitely not a, you know, let’s send this out to 10,000 people and see who bites. We’re very, you we’re going to be very targeted about making sure we’re showing it to the buyers who are most likely to have an interest based on their stated preferences, their history and so forth. We’re managing all of that back and forth, answering questions, doing calls.

Helana Robbins Huddleston (15:46)
.

Tyler McCrary (15:57)
until you get to your first bid. So a process is going to include two bids. Right? So all buyers will then submit a bid. The client will say, I like this one, I don’t like that one. What do you think about this one? And we will narrow it down to a group that will be invited to now meet the buyer, the owners of the business and the management team as we all appropriately decide who that will

Helana Robbins Huddleston (15:58)
English. Okay.

Tyler McCrary (16:19)
be and do an in-person meeting. That whole phase of initial marketing to those in-person

meetings, including first bids is sort of four to eight weeks. Coming out of those meetings, we’ll then get second and final bids. That process to get those is another few weeks. That’s going to be negotiating our team helping negotiate the terms of that deal. You pick a party that you’d want to close a deal with. And now that’s anywhere from six to eight weeks from final due diligence, legal documentation, closing

Helana Robbins Huddleston (16:29)
.

Tyler McCrary (16:54)
a

deal of monies in the bank. And as Helana said, there are teams there along the entire way because as you can imagine, the financial analysis and financial discussions are all continuing from beginning of process to, as Helana mentioned, even after a process. And we’ll talk about probably working capital here in a little bit, but that’s also where her team becomes a real critical partner in negotiating a key aspect of the deal. again, deal

If I’m a seller, thinking prepare as early as I can once I’m ready to go. Call it four to six months from start to money in the bank.

Helana Robbins Huddleston (17:26)
And – Rishi we talked a lot about documents because we do we help get everything you know organized and the financials correct

But also what we do on the sell side is we ask a lot of questions that the buyers are gonna ask you. So it’s like the scenario playing, right? We’re asking all the questions, we’re hearing your answer and we’re letting you know, okay, maybe you should think about saying it this way or maybe not saying that part because it could be confusing to a buyer. So we do all these like, I mean, you could almost say a role playing, because again, it’s getting them ready to answer all the questions to be well prepared.

So we do it that as well. want to mention besides the documents, it is a lot of documents, but it’s also a lot of discussions.

Rishi Srivastava (18:05)
Actually, your team Helana and Cohn Reznik, are you almost auditing the sellers financial statements? Is this how?

Helana Robbins Huddleston (18:12)
We are

not, no, I mean, people do ask us all the time, is this an audit? It’s definitely not at the audit level standards, but people sometimes ask me, hey, I’m gonna sell a business in two years, like your question, should I start getting an audit done or should I get a QV done? And I say, I love my firm, we do a fantastic job auditing, but if you’re really thinking about selling a QV, is there a route you wanna go?

Rishi Srivastava (18:36)
Or one comedian Seinfeld has compared it to a rectal exam.

Helana Robbins Huddleston (18:41)
That does not sound so sick.

Tyler McCrary (18:42)
I’ve clients say that before.

Rishi Srivastava (18:43)
You both work on buy side and sell side. For our audience, how does life look different on each side of the table? What is the seller worried about versus the buyer? And how does that change what you are doing day to day in a deal?

Tyler McCrary (18:59)
I-I-I-

simplified, think the seller is worried about maximizing value and maximizing terms of the deal. And so that’s our job to help make those things happen. From the buyer’s perspective, I think they’re most worried about appropriately pricing in the risk of the deal. So I’m going to pay X about a dollars and I want to make sure I fully understand the various risks and opportunities for that investment to decide how much that dollar amount I’m going to pay for. So that’s

Again, our job to help make sure that they fully understand the risk and opportunities to decide what the value is.

Helana Robbins Huddleston (19:33)
I mean,

that’s why we think of Rishi is so amazing about transactions and why I’ve been doing it for over 15 years is at the end of the day, everyone wants a fair deal, right? I don’t think anyone’s trying to not get what they think they deserve is just coming to that agreement and making sure it works out. And that’s why Tyler and I are there for the entire process, because we want to make sure if anything comes up and someone doesn’t think it’s fair, you know, working together to make sure we can find a resolution. So I think

That’s kind of where I feel they’re both of the same page is they just want they want a deal to get done right? That’s why we’re all at the table and they want to both walk away pretty satisfied with the outcome.

Rishi Srivastava (20:13)
Buying and selling, you know, thats – the world.

Owners sometimes think this is a 60-day sprint. Others assume it’s a multi-year marathon. What’s a realistic timeline for a typical $25-250 million revenue contractor going through a sale? And what tends to speed it up or slow it down?

Helana Robbins Huddleston (20:37)
So Tyler, I think you touched on this, right? I mean, it be a couple of months, but most likely it’s more like six months plus. And again, the best way to speed it up is to be really well-prepared once you’re in market, because buyers, they expect it to go pretty quickly. So if you’re not prepared, lose, kind of to Tyler’s point, they lose momentum and then they actually could walk away. It does happen and we don’t want that to happen. And so the best way is to be most prepared.

Tyler McCrary (20:37)
So, yeah.

Yeah, I would echo that. That’s really where things can, other than sort of…

buyer shows up, they know the business really well, they’ve had a relationship with the business and the business owner for a long time and they say, here’s what I’m willing to pay and the business owner likes that. Well, that deal can happen relatively quickly. But if the objective is, I wanna run a process, I want it to be competitive and I wanna ultimately feel like I got the best value in terms for my business, that takes time because you need to start with a funnel of people, create a competitive dynamic and get down to the best buyer. And then where that speeds up is exactly

Helana Robbins Huddleston (21:17)
Mm-hmm.

Tyler McCrary (21:42)
exactly where Helana said. The more prepared you are, the more ready you are to provide information quickly that the buyer’s gonna be looking for. Some of that to help them substantiate their business case for doing the deal. Some of it just because they need, they are typically fiduciaries to somebody. The buyer, if they’re a private equity firm, they have investors, they’re fiduciaries too. If they’re a strategic buyer, they have shareholders, they’re fiduciaries too. So they have to go through a process of a lot of check the box type of diligence.

Helana Robbins Huddleston (22:00)
Thank you.

Tyler McCrary (22:10)
requires a lot of document sharing and if you’re a seller and you’re going around and you’re trying to locate all these documents and that takes time then that’s going to extend the deal and you could be like this document is not even material to my business why does the buyer need to see it? Why does this really matter? And the answer is is you’re right it might not be that material but if it is something and they didn’t look at it and they were fiduciaries to their third party

now they’re going to have a hard time in that situation. So the more prepared you are, the more organized you are, the more quick it can go, the less, so the longer it can go.

Helana Robbins Huddleston (22:42)
I

would also say just have your team together. So right, you have Tyler, you hopefully have me, you have an M&A lawyer. I can’t tell you how many deals I’ve done where they’re like, just use my normal corporate lawyer. They don’t do M&A. And M&A is very specific understanding deal terms, negotiation tips. So it’s important to have your whole team ready to go and be there to support you as well. So the team dynamic.

Tyler McCrary (23:08)
Yep, very good point.

Rishi Srivastava (23:10)
You know, in B2B sales, a deal goes cold if you have not contacted with the prospect within a week. So every week you have to have a conversation.

Helana Robbins Huddleston (23:21)
That’s a lot of follow up. ⁓

Rishi Srivastava (23:23)
Yeah.

this segment is on quality of earnings and construction accounting. Quote unquote quality of earnings sounds like jargon to a lot of contractors. In practical terms, what are you doing in a QOE for a construction business? And what are the big things you are trying to validate or adjust?

Helana Robbins Huddleston (23:46)
Yeah, so just quality of earnings. Just take out quality of and just think earnings, right? We’re looking at your your bottom line and we’re making sure that it’s right. We talked about doing the look back analysis to make sure if you changed estimates on contracts, right? We’re normalizing all that, so we’re just making sure that at the end of day, whatever you’re giving to a buyer, they’re going to say, yep, that’s correct. We agree with the earnings you’re giving us. We’re going to put a multiple to it and give you the purchase price offer.

So that’s what a quality awareness is.

Rishi Srivastava (24:18)
So why has the accounting not reported already good quality earnings?

Helana Robbins Huddleston (24:25)
Well, and again, this is just nuances where I’m not saying they’re not doing it correctly, but we do try to make it first gaap compliant. So a lot of our clients do a lot of things on a cash basis, completely fine for running your business and understanding your cashflow. But for purpose of an investor putting a-valuation on it, a lot of times they do like to see US gaap reporting. So that’s usually the one thing. And then again, the estimation that you’re doing again, normal course.

Nothing wrong with that in daily operations, but from a buyer’s viewpoint, they want to see everything adjusted to more of a normal, consistent margin base for that project during the life of the project. So Tyler touched on this. You know, if you’re doing three month projects, this is not going to be material. We wouldn’t do this analysis, but a lot of contractors that we work with sometimes have one, two, three year projects. So.

consistent margins to the entire duration of the three years is important to an investor.

Tyler McCrary (25:25)
Yeah, and I think a couple of things would add is one, every buyer in every transaction nowadays that we do is doing equality earnings on their side. And regardless of how clean the company’s financials are having equality earnings on the sell side allows the seller

to control the narrative and to control the positioning of the financials. So when you don’t have a sell-side quality of earnings and the buyer’s accounting firm shows up and they say, hey, we need to make all these adjustments that we see, they’re now controlling the story and they’re controlling the narrative around the financials and sellers on their back foot having to then respond. And so it is a very, you know, it’s become one of those pieces of the deal and the deal team

Rishi Srivastava (25:56)
you

Tyler McCrary (26:07)
that’s super critical to helping again the seller maximize value, maximize terms, increase certainty to closing. The other thing I would say is while we predominantly work with founder family owned businesses, we also do work for private equity firms who are selling their businesses. So institutional owners, institutionally like financial reporting and so forth.

those clients get a quality of earnings on the sales side. So quality of earnings is not necessarily just a, know, hey, the financials might be messy because it’s a family-owned business. That could be the case. They’re also very helpful and powerful and a good tool to have for a seller, even if their financials are pristine public company audit ready. Because again, it’s substantiating the historical financial trends of the business.

Helana Robbins Huddleston (26:40)
Right.

Tyler McCrary (26:55)
which help establish for a buyer how to think about the future financial trends. And then we haven’t even gotten in and talked about working capital and the complexities of that and how there’s real dollars on the table when you start trying to negotiate what the appropriate amount of working capital should be in the business when it’s delivered to the client. And that’s another part Helana’s team is super-focusing on.

Helana Robbins Huddleston (27:00)
Yeah.

And. And

Rishi Srivastava (27:16)
And there’s

a question on that. Yeah. Good.

Helana Robbins Huddleston (27:17)
Rishi, I was going to say too, right? If you give the earnings that you’re showing just day to day to someone, typically if you are family or you are an entrepreneur, some personal expenses, some things that you really don’t need in the business are going into those earnings. And again, it’s your business. Totally fine, right? We have. We have no qualm on it, but again we want to add those back because in normal course or post close.

Those won’t exist. Well, you should get credit for that because every ad back we do is a multiple. So if we’re adding back $50,000 and you do a multiple of six on it, and again, I’m just throwing out random multiples. That’s $300,000 that we created for you by finding $50,000 of ad backs. And we always find ad backs. I don’t think I’ve ever done a deal where we didn’t find adjustments that we needed to say, no, that’s not going to happen. Like Tyler pointed out, family members, that’s a big one where

I’m giving my children $50,000 a year and they never come to work. So it’s like, well, we can add that back because they’re not going to be part of the deal post-close. So things like that where we help find. And what I’ve also found working in the buy side is when you get a quality of earnings and earnings analysis done by a firm that’s very regional or small or one-man shop.

Rishi Srivastava (28:14)
Yeah.

Helana Robbins Huddleston (28:38)
it is going to be very discounted by the buyer. They’re not going to really say, okay, we can rely on that. But when you do get, and I’m going to kind of promote myself here. When you get a Cohn Reznick report, you know, we’re a national $1 billion firm, right? They’re like, oh, we know Cone Resnick. They’re in the market. We do over 700 deals a year. So they know that, you know, we know what we’re doing. So I do want to stress that because I have unfortunately on the buy side run into

in transactions where our buyers looking and they get a quality of earnings and they’re like it wasn’t worth whatever they spent on it because it just wasn’t a proper quality of earnings.

Rishi Srivastava (29:17)
Construction accounting has % of completion, WIP schedules, under slash over billings. Where do you see the biggest issues show up in deals? And can you share an example of when the WIP or job costing told a very different story than management expected?

Helana Robbins Huddleston (29:21)
Mm-hmm.

So I have a recent one on this. I was looking at it for an investor. So I was on the buy side on this one and they said, the business is doing well. It’s growing over year over year. So, you know, we think this is a good investment, but we want to do a quality of earnings. So we went in and they hadn’t done anything on the sell side and we found projects that it was a really big project for them.

So they were really conservative on their costing. Again, not a problem when you’re doing day-to-day operations, but because they were so conservative, the project was very long. It was like three years. The last year and a half, they cut off all the revenue and they showed all this increase in revenue because they’re like, we’re actually not going to incur the cost we thought. So it made them the overall company look a small increase from fiscal year to…

fiscal year 23 to 24, and then a really large increase from fiscal year 24 and 25. But when we normalized it, the business was flat. And so our investor was like, wait, this business isn’t growing at all. So they had to retrade. And so things like that, you do not want that kind of surprise because they had to retrade on the valuation because they said, it wasn’t the story you were telling us. It’s not growing. It’s actually flat over the years.

Rishi Srivastava (30:51)
you have anything to add onto that one.

Tyler McCrary (30:53)
Yeah, I think.

Listen, one of the beautiful things about these businesses that you don’t get in a lot of companies is that they do have a backlog, right? And it’s attracted revenue and earnings that are going to be generated into the future that a buyer can show up and they’re effectively buying that, you know, X number of months of additional earnings. So it’s a, you don’t get that with every business. Some, you know, a lot of businesses, you got to go sell something every single day to keep generating revenue.

The complexity of it is are the margin estimates, the cost estimates, the margin estimates in that backlog accurate or not? And if they’re not and they historically have not been and there’s been all, you know, you think it’s X and then it moves up and down, makes it really hard for a buyer to know what they’re actually getting. If they’re real consistent and real stable and they’ve got really good practices,

Helana Robbins Huddleston (31:36)
.

Tyler McCrary (31:41)
it makes it really easy for the buyer to get behind what sort of is already in the book that they’re acquiring. And it reduces risk, increases valuation, and it’s a great dynamic of the deal. But as Helana said, you you start getting estimates all over the place, it can create a lot of noise and lot of uncertainty in the numbers when it all starts to get trued up.

Rishi Srivastava (32:00)
This is a tough business. Estimating is not easy.

Helana Robbins Huddleston (32:02)
It it

it’s not especially if you get like these great wins right these great

big projects that you didn’t have before and you’re like, all right, I’m doing the best I can, but this isn’t the same thing that I’m doing over and over again. So I can’t just know that it’s going to be at this exact margin.

Tyler McCrary (32:17)
Yeah, and we’ve seen sometimes where clients don’t really do a true like WIP update until the end of the year and they’re doing it more for just your end of year numbers. You start getting into a process and you start looking at financials mid-year, right? Because someone wants to know, how do you look at the end of March or the end of April and so forth? so you got to that’s where like preparation again, going back to like you got to build in some of those practices and make sure you can present

numbers in a way that a buyer can understand and that it doesn’t create concern or noise that’s not actually related to the deal or to the business and the attractiveness of the business but there’s so much noise in the numbers a buyer kind of puts up their hands and says I don’t know what I love the business I love the team I love the opportunity but I don’t know how to think about the numbers and how to value the business.

Helana Robbins Huddleston (32:58)
Mm.

Hmm.

Rishi Srivastava (33:07)
That’s a great perspective, both of you. Owners often hear quote unquote, working capital peg for the first time during a deal and panic. How do you explain working capital targets in a construction context? And why can this become one of the most contentious parts of the negotiation?

Helana Robbins Huddleston (33:19)
Thanks.

Tyler McCrary (33:30)
Y’all let Helana take this one.

Helana Robbins Huddleston (33:33)
So working capital is working capital by definition is just current assets minus current liabilities. And what the point of working capital is is to figure out, OK, what is the business average trending? Usually it’s a six to 12 month average. What is it trending at before close?

Well, that’s what we want to get at close because we don’t want the seller depleting any of the assets, the AR, the inventory, right? And just giving us liabilities. So this mechanism is to, it’s mostly protect a buyer to make sure that the seller is just operating as normal, but it also is a benefit to the seller. And that’s where I think sellers get so scared, Rishi, is that again, we’re just saying we want it normal course. So if you’re, you know, the past 12 months you have been.

doing it at let’s say 2.1 million dollar networking capital positive balance and then you get some really great revenue and you bill it out so your AR goes up and you actually deliver say 2.6 million in networking capital because your AR went up so well. Well the sellers should get that 500,000 because they delivered more than they have consistently been doing. So again it can definitely work to a seller’s advantage as well. It’s supposed to be

fair to both sides. But that is why the mechanisms put in place so that you don’t deplete your assets for the buyers itself and that the seller gets reimbursed. If they’re doing really well at close, they should earn that higher point.

Rishi Srivastava (35:03)
Hmm.

Tyler McCrary (35:04)
And the other point, a couple of points that I will make with clients a lot when they’re struggling to understand some of this, because they might ask…

why does the buyer get to keep all the AR? I sold, I did all that work, I sold all that, why do they get to keep it? Why do they get to collect that cash? And the thing to remind them would be that they’re also paying you a multiple of earnings of the business and those earnings, the calculation of those earnings included things that you’ve billed for but not yet collected the cash. And so you’re getting a multiple of something that’s not actually cash that you’ve collected yet.

Helana Robbins Huddleston (35:14)
See you.

Tyler McCrary (35:37)
So that’s why the dynamic of the deal includes they get to keep the working capital. The other point that sometimes we try to make is, you know, working capital and the working capital peg is, it’s kind of like when you buy a car and you’re expecting it’s going to have some gas in it so that like you buy it and then all of sudden you can’t actually drive it off the lot. So you got to go find gas and you got to go put it in the car. Like nobody would really buy a car that way. Now we’re talking about much bigger numbers and complex transactions, but it’s kind of

Helana Robbins Huddleston (36:04)
Okay.

Tyler McCrary (36:05)
the same. Someone’s saying I’m buying a business. I’m assuming it’s a going concern and I need that business to continue to operate without I’ve got to show up day one as the buyer and then fund more cash into the business just so it can keep going. If I’m doing that, effectively am paying more for the business. And so it’s the working capital peg is what everyone is going to agree to is that amount of gas

Helana Robbins Huddleston (36:18)
Okay.

Tyler McCrary (36:29)
that the car needs

needs

to keep running at the purchase. Not forever, not like hey this gas can last forever, but amount of gas that they can roll off the lot and keep running and then you’re using different calculations to figure out how much that amount is.

Helana Robbins Huddleston (36:44)
And

Tyler mentioned, Ritu, that we help with this calculation. So I know it’s called quality of earnings, but part of that analysis is doing this net working capital peg. And we help negotiate with the buyer.

what that peg should be and outlining it in the purchase agreement so that we come to an agreement on the calculation. So I just don’t want a seller thinking, God, that seems complicated and I wouldn’t even know how to do it. That’s what we’re here for. We make sure that we can do the analysis for them and also make sure it’s documented correctly.

Rishi Srivastava (37:14)
I really love that buying car analogy, with gas. only someone who’s charismatic and, thinks next level can give that kind of analysis of a deal.

Helana Robbins Huddleston (37:17)
Hahaha

I’m gonna

steal that Tyler now, I’m gonna use that.

Tyler McCrary (37:27)
Yeah,

you know, well, we’re always trying to think of like new and unique ways to explain working capital because I mean, I think.

People like me and Helana can take it for granted because we see it all the time every day and it makes a lot of sense to us. You try to put yourself in the shoes of the business owner who’s never been through this and all of a they’re thinking, you know, take inventory for example. They bought all this inventory and they paid for it all and the buyer’s gonna get to keep it. Like, how does that seem fair? Shouldn’t they pay me for that inventory? you know, like yes, well if you keep all that inventory, what are they gonna sell to the company on day?

one. They’re gonna have inventory to sell so now they don’t have the gas in the car. you know negotiate around like what’s the appropriate amount you know you can see some gamesmanship in this for sure and that’s why it’s good to have good advisors to try to get make sure you’re not getting taken advantage of on either side of the table.

Helana Robbins Huddleston (38:04)
Yeah.

Rishi Srivastava (38:17)
The next segment is on valuation, risk, and how to prepare. When you are marketing a $25-250 million construction deal, what actually moves the valuation multiple up or down? Is it backlog quality, customer concentration, mix of service versus new construction, self-perform versus GC, safety record? What matters most to buyers?

Tyler McCrary (38:46)
So at the end of the day, valuation should be established based on the.

risk-adjusted future cash flows of the business. So that’s, I’ll simplify some of that. But buyers saying this business is going to generate cash in the future that I’m going to own. It’s just a matter of how much cash is it going to generate. And a lot of comes down to how risky the business is. And so valuation multiples tend to move up and down based on a spectrum of risk associated with the future of the business.

So if I think about some things that can create higher amounts of risk, a very high amount of customer concentration, that’s pretty risky for a buyer. What happens if that one customer goes away and that’s 80 % of the business? That’s a lot of risk, right? So that’s gonna drive valuation down.

Big projects over long periods of time. Let’s say the business had three projects last year that it generated all its earnings from. That’s how it usually is. Well, what happens if they miss one project? A lot of concentration risk there could have a big impact on the future cash flow of the business on a lot of risk there.

Helana Robbins Huddleston (39:34)
Thank you.

Okay.

Tyler McCrary (39:48)
And then let’s talk about things like in-market risk. Let’s say all your eggs are in one in-market basket. It’s all single-family new construction. Again, what happens if the single-family new construction market slows down? More risk that future cash flows could go down. So those are all I’m talking about, like what are key risks. If you look at it from the other side, and a lot of it’s around concentration, so what if it’s more diversified?

Helana Robbins Huddleston (39:55)
Almost.

Thank

.

Tyler McCrary (40:13)
What if you got a lot more diverse customers? You

lose one customer, you know, not great, but doesn’t make a huge impact on the future of the business. Are you in one in-market or are you serving multiple in-markets, which means maybe one slows down but the other picks up.

Helana Robbins Huddleston (40:17)
.

Tyler McCrary (40:28)
you are you providing just one service or do you have multiple service? I you’ve got multiple ways to make money, multiple customers to make money from, and so more diversity. And then is your business more like recurring, contractual, required type of work? Or is it really like capital intensive? It’s requiring your customers to need to do new projects every year. One’s more risky, one’s less risky. And so that’s where you see this spectrum evaluation multiples that ultimately is,

really just a factor of risk for future cash flow.

Helana Robbins Huddleston (40:57)
.

Tyler McCrary (40:59)
And then the other thing I would mention that we haven’t talked about yet, but there’s also just people risk, right? So I’m a buyer, I wanna pay you, business owner, a lot of money for the company that you’ve built, and you wanna retire and walk away. But you’re like the bottleneck of the business. Every decision is made through you. You’re involved in everything in the business.

Helana Robbins Huddleston (41:02)
Thanks. So, thank you.

Tyler McCrary (41:21)
business.

again, if you’re gone in the future, there’s probably a lot more risk there. If you’ve built a good team, you know, and I’m not saying everybody has to be Fortune 500 CEO level type of people, but a good team of key leaders, they’ve been with the business, they understand the industry, they’re growth minded. Now I’m a buyer that says, well, if any one of these people were to leave, including you, you know, Mr. or Mrs. business owner, the risk of that making a significant impact on the business and its

Helana Robbins Huddleston (41:30)
Thank

Tyler McCrary (41:52)
cash flows has reduced. Less risk, higher valuation, more risk, lower valuation. So that’s how I try to coach our clients.

Helana Robbins Huddleston (41:59)
And it reaches to your point when you said what should a person be thinking about they’re wanting to sell in two years. This is where they really can get ahead of it. I mean, having conversations with Tyler and his team is really important because they can say, well, you’re too concentrated here. Maybe you should try to get into another region and gives you time to diversify to get that valuation up.

Rishi Srivastava (42:18)
For a family or founder-owned contractor doing this once in their life, what are the top three mistakes you see before they ever call you? Things that quietly destroy value or make the process much harder than it needs to be.

Helana Robbins Huddleston (42:35)
Well, I’m, I’m subjective because I’m going to say the accounting. If the accounting is, is wrong or it just, you know, a lot of things in there that should not be in the business, uh, that is going to make this going to impact evaluation. Uh, one other thing I see, and we don’t actually do a lot of work around this, but it does impact so many of the deals I work on is not meeting your projections. So a lot of our sellers will work with Tyler and his team to work on, okay, what do we, what are our expectations, right? They can use their backlog to help that.

But they’re projecting out typically, I mean, Tyler can append this more than I can, but at least a year or two on what it’s gonna look like for the business, sometimes up to five years, a five year projection. And so as diligence continues on their side, so when the buyer comes in and starts doing diligence, they will be comparing, hey, you told me you were gonna hit this, and this month, are you hitting it? And I can’t tell you how many deals I’ve worked on where they don’t hit their projections. And so then a buyer really gets hesitant

because they’re wondering if these are going to be real valid numbers and if the valuation is

Tyler McCrary (43:39)
Yeah, I think the biggest mistake I see sometimes is a seller.

waiting until what they feel like is the absolute last moment to do a transaction. Meaning they’ve decided in their mind, I’m making this up, but they want to retire when they’re 65 and they want to sell the business when they retire. And they wait until they’re 64 and a half to sell the business. And they haven’t prepared

organizationally, they haven’t prepared people wise and they’ve set unrealistic expectations on themselves to go through a successful transaction. And they’re just not ready. And now it’s rushed and it’s almost like a fire sale situation because they just have to, they just have to retire and they have to sell and they’ll just take what they can get. And so kind of like waiting and putting yourself in a box to the type of transaction that works for your situation is never great.

Helana Robbins Huddleston (44:29)
most times if you’re really involved in the business, they’re going to want you to stay on for a year, 18 months. So in Tyler’s example, again, that wouldn’t work because even if you’re 64 and a half and you want to try to sell them six months, they’d want you to continue on for at least a year, year and a half. What we do see is owners realize, okay, I do want to sell the business, I want to leave right after I sell.

So I need to start preparing my team and this is Tyler’s labor component, I thought, where you need to start building in that GM that will completely run the business before the transaction even begins. That you have stepped away at that point, you’re very much oversight. You can still be taking a paycheck, no problem, but you’re really the oversight and you have a GM completely running the business who will stay when the transaction closes.

Tyler McCrary (45:18)
And I think a lot of business owners…

rightfully so, think about the concept of going out and hiring the right person, the right GM is really difficult. And it actually becomes a really obvious and important inflection point for why would you even consider doing a transaction? And a lot of times it’s because business owners know that selling the business and transitioning out of it is something that they’re going to do in the future. Maybe they don’t have

family members who want to take the business over, maybe they just don’t want to hand the business to their kids, for example, but they’re not sure how to navigate that, like building a leadership team or bringing in the next key leader to replace them. And so doing a transaction sometimes, again, if you’re in the right mindset and you’ve planned appropriately, can be, I want to do a transaction, maybe it’s with a private equity firm. They’re going to come in and they’re going to become my partner.

and I’m going to work with them to help build the team, to help grow the business. And I know that I’m not exiting day one, but what I’m doing is trying to create a transaction situation that does provide me with liquidity and value and I can diversify my net worth outside of this single asset. It brings in a partner who’s done this before, helped people like me, the business owner, build teams around them.

build succession planning, and also create more capital resources to grow the company. And if you’re in that mindset, then you can be in a really good position to do a lot of different types of deals. Because you’ve not boxed yourself into a, I gotta sell this business and I need to be retired. My spouse has been telling me for 10 years, I need to do this. At the end of it, for example.

Helana Robbins Huddleston (46:59)
No sound.

Tyler McCrary (47:02)
And so again, it’s a lot of just being prepared both organizationally, financial reporting, but also just mentally like prepared for what you’re going to and doing it at the right time.

Helana Robbins Huddleston (47:09)
Mm-hmm. Okay.

Rishi Srivastava (47:15)
We are also seeing more contractors wanting to buy smaller firms. When a construction company is the buyer, what should they be looking at beyond EBIDTA Multiple? What are the big red

flags and green flags you want them to understand before they sign an LOI?

Tyler McCrary (47:37)
I think that, I mean, Helana hit on this, you know, at the beginning.

A lot of these businesses are very relationally driven. so outside of the financials, really understanding where the relationships held, where the key relationships held, and is there any risk there? If they’re all frankly held with one person, ⁓ I’d want to think about as a buyer, how do I really put a fence around that risk? Maybe it’s create an incentive plan for that employer, that owner, to really make sure they’re aligned with the success of the business in that relationship.

Helana Robbins Huddleston (47:52)
Mm. .

Tyler McCrary (48:06)
or there’s you know, there’s other ways to try to mitigate that risk, but they are you know, these can be very relational businesses and so stepping back from what the financial

profile looks like, you know, that’s a key aspect. And then also just the labor component of you know, these are labor intensive businesses and how’s the workforce going to react to a transaction? Is there risk they’re going to lose?

Helana Robbins Huddleston (48:15)
Mm-hmm.

Tyler McCrary (48:36)
all

the people doing the job because they don’t want to work for you as the owner. How do you mitigate some of that? How do you make sure you incentivize them? How do you get them excited about new ownership? Those are the types of things, again, not really financially driven by some EBITDA or some multiple, but people are super critical to these businesses in making sure that you have a full understanding of how that dynamic could be impacted by the transaction.

Helana Robbins Huddleston (48:59)
And it’s interesting,

Rishi because we see in a lot of transactions where, and we call it getting them under the umbrella.

where I’ll be talking to the owner and they engaged us to do the sales side, but they don’t want to let their controller know and they don’t want to let their GM know. And I was like, you need to let them know this is really going to impact them. We need everyone on board. Like Tyler said, make sure you’re incentivizing them. But they also know the day in day out of the business, which really is important when we’re taking them with Tyler to market. So we always say get as many people as you can under an umbrella that makes sense, at least, know, the leadership team.

Rishi Srivastava (49:35)
Yeah. The last section here, Tyler and Helana, it’s on war stories and the human side. Without naming names, can each of you share a quote unquote war story from a construction deal, one that went really well and one that went sideways? And what lessons a typical owner, CFO or controller should take away from those experiences?

Tyler McCrary (50:02)
How many you wanna go?

Helana Robbins Huddleston (50:05)
I was going let you go first.

Tyler McCrary (50:06)
So I’ll give the bad war story first and then I’ll give good war story. on the bad one, and I’ll give sort of maybe a by side example. It’s just like.

You go really far down the road. think that, you know, you know everything, you know, all the facts and then something new comes out right before closing. And it’s not necessarily the fault of the seller that new information came out. It’s, it’s, but it is what it is. And so now you gotta have a hard discussion as the buyer of you want to do this deal seller wants to do this deal. Um, but something’s gotta change. And in particular for me, it was around sort of some of the tax dynamics involved in like the

Helana Robbins Huddleston (50:50)
Mm.

Tyler McCrary (50:50)
seller thinking one thing tax wise and how the proceeds were all gonna you know come out after taxes and it just changed I could again it wasn’t anyone’s fault but it was the facts of the deal and and and you have to navigate those as a buyer sometimes you have to make hard decisions of I I Really like this business. I really want to do this deal I got to figure out I’ll make this work for the seller and at the same time the sellers got to figure out like I got to be

reasonable and understand this is impactful to the buyer. And so how do we get to meeting the minds and you know, I had this great situation that this doesn’t happen that often in deals anymore. But you know, we all had to get together in a room face to face with each other, buyer and seller and both lawyers and investment banker and work it out and have some hard, you know, realities and conversations, but had to work it out. And that’s what we did. you know, again, that does not happen that often.

Helana Robbins Huddleston (51:20)
Okay. Okay.

Tyler McCrary (51:40)
where everyone’s

in play and in a board room and talking and hey, here’s our position. You guys go to that room and y’all talk it out and come back and then we’ll discuss it. But that’s what we had to do. And so it was not fun. We had to work our way through it, but we did and we got to close the transaction

Helana Robbins Huddleston (51:43)
.

Tyler McCrary (52:00)
Best situations are again going out back to the financial discussion is working with a client that has really clean books, really good reporting.

And every month we give the updated financials and every month they hit or exceed their numbers. Every month their backlog gets a little bit bigger. ⁓ Every month they’re kind of winning new contracts as they expected. And there’s no surprises. They were organized, had their documents together,

Helana Robbins Huddleston (52:12)
. .

Tyler McCrary (52:24)
buyers ask for questions, we can get them answers fairly quickly. And it just, the transaction just clipped along and it communicated to buyers that this is a sophisticated business

that is growing and is going to continue to grow because I can tell they’re just doing things the right way. They were prepared for the transaction and it’s just a good example of where preparation ends up really paying off in the long run and we’re investing

the time and money on the front end pays dividends on the back end. I’ve got a transaction going right now that, you know, big, big deal, big company doing large projects, a lot of complexity to their work, but a lot of interest and excitement around the deal and the, you know, hopefully closing in the not too distant future because they were very professional in how they operate and very professional in how they manage their books and their records and,

Helana Robbins Huddleston (52:55)
.

All right.

Tyler McCrary (53:17)
So those are when things go really well. But again, think we’ve talked on this a lot. A lot of it goes back to the preparation phase and being ready to go.

Helana Robbins Huddleston (53:25)
Yeah, the only thing I’m really quickly, because I know we’ve been talking for a while now, but is what we call deferred revenue. All that is, is when cash comes in before you start working on a project and then you start working on it, and applying that cash may not coincide to the cost you’re incurring, and all these different dynamics on that customer deposit that you got while at closing, typically a buyer wants that deposit. You have to negotiate, truly what

have I not spent on it because I’ve already done some work on this project versus what am I holding that truly is cash and negotiating that. again, can easily, not easily, we can definitely get through that dynamic, but sometimes there’s a lot of back and forth on.

Rishi Srivastava (54:08)
Thank you. So the deepest and the best question is the last one right here. Most of your sell side clients are families doing this once with employees they care about deeply. What advice do you have on the human side? Communicating a sale to key PMs, supers and office staff, thinking about legacy and what’s one quote unquote

finance at the job site lesson you wish every contractor understood before they buy or sell a business.

Tyler McCrary (54:44)
I think…

employees get the most concerned about uncertainty and sellers get the most concerned about sharing too much and there’s like a balance that has to you have to figure out but what I found is that it’s more rare for employees to find out that

Helana Robbins Huddleston (54:48)
Mm-hmm.

Yes.

Tyler McCrary (55:03)
an owner is going through a sale process and sort of get scared and leave. What’s more common is that if the sellers are, and we coach sellers on this a lot, like how do you deliver this news? Because at end of the day, it can be really exciting for employees, but it’s change. so sellers need to just…

Be willing to listen to the employees and then be prepared to answer questions and explain to them like why this is a great outcome. Now.

that there are different levels of employees throughout an organization and you have different conversations with them based on that level on those levels and how this will impact their day to day. But I think just having a lot of empathy and approaching those conversations with a lot of empathy, knowing that change is always hard, but also realizing that this can be really exciting for those employees and create a lot of opportunities. Now there are certain situations, certain deals where a buyer may be coming in and there may be,

Helana Robbins Huddleston (55:30)
. .

Tyler McCrary (55:52)
you cost cutting that they’re looking to do. That’s a different

dynamic and I think as a seller you have to think about how that impacts your business and organization and the people that work for you. We have a lot of clients that, regardless of the situation, pay transaction bonuses or some of their employees may even have stock in the company and so they’re all aligned. But yeah, they’re hard conversations and I think at the end of the day, having those sooner

especially with your key leadership team, always turns out better than waiting until the very end, least what I’ve seen in my experience.

Helana Robbins Huddleston (56:23)
Yeah.

Yeah, I would reiterate that I think messaging and incentives, they’re all really important. And again, get help for figuring that out. Yeah, I mean, again, it’s not something where we expect an owner to know how to do this because again, this is probably the first time they’ve ever gone through a transaction.

So get people that are good at understanding, how do we communicate this to employees? What are different incentives we can think of? Sometimes it’s not always cash, sometimes it’s other things. Buyers are typically willing, especially with the leadership team, to sign employment contracts. Sometimes they want to do that so that they want to lock in the really key leadership employees to make sure that they transition over. there’s, again, all these different nuances to a deal and you get a team to support you on it.

Rishi Srivastava (57:08)
Yeah, so who could Seller take help from on this kind of communication?

Tyler McCrary (57:14)
I think, mean, we…

We typically weigh in with all of our clients just because we tend to be part of those conversations or help think about those conversations with the business owners. And so we kind of expect that we’re going to provide that type of feedback and insight. But a lot of times you have really good advisors around the table. As Helana mentioned earlier, that it’s going to include M&A, counsel for some clients. It includes wealth advisors that they’ve been working with for a long time. And I think it’s important for clients to feel like they have advisors they can lean

Helana Robbins Huddleston (57:34)
Mm hmm.

Tyler McCrary (57:42)
on for tough questions like that around the entire table. I think that’s where you hire people who have done a lot of these deals and been through a lot of these situations and can share the good and the bad of what they’ve seen and experienced with other clients.

Helana Robbins Huddleston (57:57)
I’m

sure everyone listening to this, wow, I have to have a lot of people helping me. But again, we are talking about millions and millions of dollars. So it’s just, such a big transaction, so impactful to someone’s life that you do want to make sure that you have your team lined up at the cost because it’s so much worth it because you’re going to get exponential the value of it.

Rishi Srivastava (58:19)
Yeah, someone like you guys, you do these deals many, many times, but these sellers, and in some senses, buyers as well, they are just doing it once in a lifetime. They have no experience on this. And this is like probably the biggest event in their lifetime.

Helana Robbins Huddleston (58:34)
Which is why we love it. We love doing it because it’s it’s we’re part of this huge right transition for them and and we want to be there to support and like I said Tyler I’m sure talks to them after the deal all the times I talked to them after the deal just to see how things are going.

Rishi Srivastava (58:34)
Yeah? ⁓

Thank you so much, Tyler and Helana. This was a phenomenal episode recording and I enjoyed it.

Helana Robbins Huddleston (58:55)
We did too, thank you.

Tyler McCrary (58:55)
Thank you. Yeah, I appreciate it.