Gina Cocking is the CEO of Colonnade Advisors and represents the 2% of women who are CEOs at financial institutions. She brings 20+ years of experience in investment banking and executive leadership to the table including experience as a CFO in multiple companies. When Gina was recently interviewed by Ryan Nelson of the Advanced Principles Podcast, Ryan asked Gina what advice she might have for other women looking to enter the competitive and male-dominated industries like automotive, technology, and investment banking. Gina (23:00) “I think 15 years from now, 20 years from now, the guys better watch out. Women are going to college at a higher rate than men. Something like 60 … [Read more...]
Schedule Exit Talks as Part of your Regular Board Meetings
We at Colonnade are excited about a potential “new norm” with clients where ongoing communications about the exit strategy (when a company will be sold to a buyer) are part of the normal course of board meetings. We recently interviewed Mark Achler and Mert Iseri, authors of the excellent book Exit Right: How to Sell Your Startup, Maximize Your Return and Build Your Legacy. They recommend, and we agree, that all companies have an annual “Exit Talk” to act as a standardized framework that ensures continuous alignment on exit expectations and timing. Once the internal communication is in place, founders benefit immensely from keeping the conversation going to ensure … [Read more...]
The FAIR Framework and How to Exit Right
If you’re a founder/owner of a company, you might be asking yourself questions about next steps, especially when it comes time to think about selling your company. Many times, the question that is on most owners’ minds is: Who is going to pay the most. We’d like to suggest a new question, based on years in the investment banking field. We’ve helped owners create $9 Billion in value from their businesses. But we’ve done this, getting the best price and terms for a business, by asking: What’s the right home for this business? What’s the right home for my people? What’s the right home for the vision? When we interviewed Mark Achler and Mert Iseri, authors of the book Exit … [Read more...]
Integration Strategies in the Automotive Industry (Gina Cocking Interviewed on the Advanced Principles Podcast)
Colonnade’s CEO and Managing Director Gina Cocking was interviewed (in a second interview) by Ryan Nelson of the Advanced Principles Podcast. Advanced Dealer Solutions is a premier F&I development agency specializing in the automotive, RV, and power sports industries. Advanced Dealer Solutions works to maximize the purchasing experience as well as increase F&I sales and profits as well as increase service sales and retention. Advanced Dealer Solutions has assembled one of the most sought-after F&I training platforms in the industry. They have a passion for increasing dealer profits by providing industry-leading technology and implementing an F&I selling system that is … [Read more...]
Discover the Rationale for a Synergistic Business Merger
You’ve grown your company to a successful enterprise and feel that it is time to take some of your chips off the table. Is it time to sell the company and plan an Exit? As we discussed with recent guests on Colonnade’s Middle-Market Mergers and Acquisitions podcast, Mark Achler and Mert Iseri, perhaps “Exit” is not the right word for what best comes next. An exit can in fact be a new beginning. With the right headset to find the most synergistic buyer, company owners/founders can shift their perspective and recognize that what might initially look like a short-term transaction is indeed a long-term partnership. The way to maximize value is not just looking backward as … [Read more...]
Colonnade’s Unique Value in the M&A Process (Gina Cocking Interviewed on the Advanced Principles Podcast)
Colonnade’s CEO and Managing Director Gina Cocking was interviewed by Ryan Nelson of the Advanced Principles Podcast. This interview highlights the important role that Colonnade Advisors plays for our clients when they embark on the process of selling their company, raising capital, or seeking to acquire another company.Colonnade Advisors has deep experience in the automotive dealership services industry. We publish Quarterly Updates on the Auto F&I sector with information on dealer profitability and recent transactions. In this most recent interview, Gina and Ryan cover the following questions: What makes Colonnade unique as an Investment Bank/Advisor? (6:00) We … [Read more...]
Auto-related M&A Today & Tomorrow
Colonnade’s CEO and Managing Director Gina Cocking was interviewed by Nick Zulovich of the Auto Remarketing Podcast. Colonnade Advisors has deep experience in the automotive dealership services industry. Gina has appeared on the Auto Remarketing podcast in the past. Hear her on a previous episode. In this most recent interview, Gina and Nick cover the following questions: What was the auto-related M&A landscape in the past 12-18 months? (2:00) Gina: 2021 was a hot market in auto-related M&A. We saw 640 dealerships that traded hands. There were ~550 auto tech companies that were either founded or acquired, and that's in broadly defined auto … [Read more...]
Shifting Value Propositions in the F&I Ecosystem (Interview with Gina Cocking)
Colonnade’s CEO and Managing Director Gina Cocking was interviewed by Rebecca Chernek of Chernek Consulting on the Auto industry’s F&I Master Series. Colonnade Advisors has deep experience in the automotive dealership services industry. Please see the pre-event interview series here for more information about Colonnade in the industry, M&A drivers, and more. Colonnade Securities is a leading investment banking firm that has completed over $9 billion in M&A transactions for clients in the business and financial services industries. Our firm has deep expertise in the automotive F&I industry and has advised many companies in the sector on strategic … [Read more...]
Colonnade to Attend the Agent Summit 2022
Matt Magee, Senior Account Executive at Colonnade Advisors, will attend the 2022 Agent Summit to meet with industry professionals. The event will be held May 15-18, 2022, at Caesars Palace in Las Vegas. Agent Summit is an event to recognize the independent general agent’s unique role in driving F&I success and dealership profitability. The annual event is brought to you by Agent Entrepreneur and F&I Showroom magazines. Registration for the Agent Summit is open on the event’s website. Please reach out if you would like to meet with Matt during the conference: mmagee@coladv.com. Colonnade Securities is a boutique investment banking firm that has … [Read more...]
Spotlight on Some of Colonnade’s Favorite Industries
Colonnade is proud to present our latest series of podcasts on “industry spotlights,” focusing on specific trends and opportunities in middle-market M&A transactions. Hear Jeff and Gina dive deep into some of the industries where we’ve advised on scores of successful M&A transactions over the past two decades. These conversations can be very helpful to our clients, private equity firms, and strategic buyers. In this series, we focus on, Insurance Premium Finance, Vehicle Service Contract Administrators, Automotive Reconditioning, and Home Warranty. Coming soon to the podcast - our next two industries of focus: F&I Agencies and Payment Plan … [Read more...]
Gina Cocking’s Article Explains the Hot F&I Agency M&A Market
Colonnade’s Managing Director and CEO Gina Cocking contributed an article to Automotive News on March 27, 2022. In the article, she predicts that 2022 will be a high-volume year for F&I agency M&A. Private equity firms are driving the current frenzy with their desire to take advantage of the booming growth in this industry. In this article, Gina describes the private equity buy-and-build strategy. Private equity buyers are attracted to the industry’s fragmented ecosystem, high cash flow, and expanding market size. Private equity firms are experts at acquiring a platform investment and then making several strategic acquisitions to increase market share and expand … [Read more...]
Gina Cocking Presents at the F&I Master Pre-Event
As a pre-event to the F&I Master Series with Rebecca Chernek of Chernek Consulting, Gina Cocking appeared with Rebecca on a LinkedIn Live. Gina Cocking is the CEO and Managing Director of Colonnade Advisors and has deep experience in the automotive dealership services industry. Colonnade Securities is a leading investment banking firm that has completed over $9 billion in M&A transactions for clients in the business and financial services industries. The firm has deep expertise in the automotive F&I industry and has advised many companies in the sector on strategic transactions. Please see our Quarterly Updates on the F&I industry here. Colonnade as an M&A … [Read more...]
Personal Loans More Available to Subprime Borrowers in 2022
According to Transunion and Fox Business, consumer loans have been on the rise over the past few years. This year is looking like it could be a record-setting one with projected originations of 20 million loans, as lenders loosen credit standards and provide broader access to capital to subprime borrowers to generate additional originations. Demand for personal loans is primarily driven by a desire to consolidate high-interest credit card debt into a lower rate, fixed payment note that reduces the consumer's rate by 7.4% on average. Credit card balances reduced drastically during the first 12 months of the pandemic but have since risen back to all-time highs. Transunion … [Read more...]
Gina Cocking to Present Value Drivers in M&A at the AutoIntel Summit
Gina Cocking, CEO and Managing Director at Colonnade Advisors, will be speaking at the upcoming AutoIntel Summit on April 12, 2022. The summit takes place from April 12-14, 2022 in Raleigh, North Carolina. Take in the ‘Future of Automotive’ and network with the industry’s leading minds in innovation and build your knowledge across various topics. AIS 2022 will focus on these core topics within the future of the automotive industry: Connected Mobility, Economic Forecasting, Fintech Solutions, Investment Capital, Compliance & Regulations, Mergers & Acquisitions, Predective Analytics and Transportation Research. Gina’s presentation is titled: Value Drivers in M&A and … [Read more...]
Gina Cocking to Appear at the F&I Master Series Event
Gina Cocking, CEO and Managing Director of Colonnade Advisors, will be joining the F&I Master Series online event hosted by Rebecca Chernek of Chernek Consulting on April 6 and 7, 2022. The event takes place both days from 8:30 AM EST to 3:00 PM EST. According to Chernek consulting, there’s a revolution afoot and forces are merging that will greatly impact the way auto dealers do business in the near future. This event will address in great detail the changes facing finance and insurance in the automotive retail space for franchise, independent, and recreational dealers nationwide. Topics covered include: Gina's talk is titled: M&A - Stay Competitive in an … [Read more...]
California AB 1771: Not a Laughing Matter but a Laffer Matter
In our advisory role to clients, tax considerations often come into play. Decision-making around wealth building is complex, and our thought pieces in the past have been popular resources. We consider the client's goals, how to prepare for wealth and how to preserve your family legacy. When we see major changes in legislation or other aspects of the tax environment, we often provide our commentary. Note, Colonnade does not provide tax advice. Legislators in California are currently proposing AB 1771, also known as the California Housing Speculation Act. This potential change in capital gains on home sales would have a significant impact on the “fix and flip” industry, an industry … [Read more...]
De-Mystifying Due Diligence
Due diligence is a crucial and time-consuming component of any M&A transaction. The success of most acquisitions hinges on the success of the process of due diligence: providing and verifying the relevant facts and financial information about the seller to the buyer. On Colonnade Advisors' Middle Market Mergers & Acquisitions podcast, we devoted four episodes on the topic and break due diligence into its four main components: Coming up soon: An episode all about data rooms and their role in creating efficiency in the M&A process. In this post, we share an overview of advice from each of the podcasts. You are invited to listen to the full episodes via … [Read more...]
Three Predictions for SPACs and the M&A Market
The last several years have seen the rise of Special Purpose Acquisition Companies (SPACs) and their role as an increasingly important buyer universe of private companies. During this same time period, Colonnade Advisors has developed expertise and special relationships with this buyer group. In 2021, Colonnade developed the proprietary SPAC Attack Index to track the amount of capital in the system looking for deals. When we first created the index, the levels were at 237 (in Q3 of 2020). This index rose as shown in the “pressure cooker” series below: We thought the index was high at close to 800, but it continued to rise and nearly doubled that amount, coming in at 1449 … [Read more...]
Colonnade to attend NADA Show 2022
Gina Cocking, CEO and Managing Director of Colonnade Advisors, will attend the 2022 NADA Show to meet with industry professionals. The event will be held March 11-13, 2022, at the Las Vegas Convention Center. At this event, thousands of dealers and managers, OEM execs, and professional service providers connect with their colleagues to learn about the latest industry innovations. Registration for NADA Show is open on the event’s website. Please reach out if you would like to meet with Gina during the conference. Contact Danielle Flynn: dflynn@coladv.com. Colonnade Securities is a boutique investment banking firm that has completed over $9.0 billion in M&A … [Read more...]
SAFE Fundraising – Know the Pros and Cons
Early-stage companies have several ways of raising funds, from convertible notes to angel equity investments. When early-stage companies raise capital, we often hear of extraordinary legal costs and delays associated with establishing valuation and completing documentation. Entrepreneurs/early-stage companies often need to raise capital in a short timeframe and prefer a streamlined process. Setting the valuation of an early-stage enterprise can be a challenge. Selling equity at an early stage risk significant dilution to the entrepreneur/founders. Enter the SAFE - Simple Agreement for Future Equity. The SAFE was created by Y Combinator in 2013 to simplify and streamline the … [Read more...]
Gina Cocking’s Cover Article in Agent Entrepreneur Magazine
Colonnade’s Managing Director and CEO Gina Cocking provided the cover article in the January/February 2022 edition of Agent Entrepreneur magazine, The Industry’s Leading Source for Automotive Agents. Gina’s article was titled 2022 M&A Predictions for F&I Agents. In this article, she covered the challenging competitive dynamics for independent agencies, described the private equity buy-and-build strategy, and emphasized the importance of deal timing. Gina also talked about the Great Resignation’s impact on M&A, which we cover in more detail in this post.Gina concluded that M&A in the F&I sector will continue into the foreseeable future because … [Read more...]
The Great Resignation’s Impact on M&A
Through October 2021, 38 million workers quit their jobs as part of what is being called the “Great Resignation.” The term “Great Resignation” was coined by a Texas A&M University professor, Anthony Klotz, who predicted the mass exodus in May of 2021. This economic trend, in which employees voluntarily resign from their jobs en masse, has also been called the Big Quit. Workers are leaving for higher wages, better conditions, or just a change. Some sources point to rampant stress, the shift to remote work, or shifting priorities in light of the pandemic. While this disruption has been difficult, it is not as problematic as the elevated level of retirements. Over 2.5 … [Read more...]
Colonnade Advisors’ Podcast Series Answers Your Questions About the Best Process for Selling Your Company
You’ve grown your company to a successful enterprise and feel that it is time to take some of your chips off the table. Perhaps the hot M&A markets and favorable multiples suggest that now is the time to look for exit strategies that fit the goals of the founder and management team. However, you likely have dozens of questions swirling around such as: To answer these questions and more, Colonnade Advisors’ Managing Directors Gina Cocking and Jeff Guylay put together a series of podcast episodes to walk you through the process of selling your company, step by step. We’ve also invited a CEO who has recently been through the process herself, Elizabeth Davies of Stonemark, … [Read more...]
M&A Activity in the Middle Market Remains Strong
The ongoing pandemic has not slowed down M&A activity, and valuations are high. Strategic and financial buyers are aggressively seeking well-run companies contemplating an exit or raising capital. We’re racing to complete a handful of transactions by the end of 2021, and we’re looking forward to a robust 2022.We‘d like to highlight a few deals including a sellside, buyside, and capital raising. OpenRoad Lending (sellside) Colonnade advised OpenRoad Lending on its strategic investment from Clarion Partners. OpenRoad is a fast-growing direct-to-consumer auto finance company that provides an online marketplace for consumers to refinance their auto loans across a network of … [Read more...]
Announcing our New Insights Portal
Colonnade Advisors is pleased to announce its new Insights Portal, offering industry research and other news. Inside the portal, you’ll find our Quarterly Updates, Industry Reports, and our blog called What’s New From Colonnade. On the home portal page, we display our most recent Quarterly Update as well as our most recent Industry Report. Our Industry Reports have previously been referred to as “white papers” and have been a very popular resource for our clients, private equity firms, and strategic buyers. Our home portal page also displays the most recent two blog posts, or What’s New from Colonnade. Click on View More for dozens of posts covering a variety of … [Read more...]
Colonnade Advisors Shares Wisdom to Companies Looking to Sell, Buy, and Raise Capital
While Colonnade hosts its own podcast, we are proud to appear as guests on other shows. Often these conversations can be very helpful to our clients, private equity firms, and strategic buyers. These conversations, depending on the podcast, offer a specific deep dive into industries covered by Colonnade. Depending on the focus of the podcast, we offer advice for companies looking to sell, buy, or raise capital.In 2021 Colonnade’s Managing Director and CEO, Gina Cocking, appeared on the M&A Masters Podcast with Patrick Stroth to offer advice to founders seeking to sell their company. Gina also appeared on the ConsumerFi podcast, a show for consumer lending … [Read more...]
Colonnade Advisors Offers Beach and Mountain Settings to Clients
The process of selling your company can be difficult. It is one of the biggest decisions you make in your professional career; perhaps one of the bigger ones you make in your lifetime. We treat your business as if it was our own. Getting your company ready to go to market is like launching a baby from the nest. It can be emotional, draining, and even all-consuming. And we want to be there for you, in person and virtually - when you want, how you want.We have expanded our geographic footprint. We have moved our headquarters to Tampa Bay and will continue to have a significant presence in Chicago. Enjoy the mountains? Colonnade’s Managing Director Jeff Guylay commutes from the … [Read more...]
Gina Cocking Interviewed on M&A Masters Podcast
Gina Cocking, CEO and Managing Director of Colonnade Advisors, was thrilled to join Patrick Stroth on the M&A Masters podcast. In this episode, we discuss: Watch the interview on video: Or listen on the M&A Masters podcast website. Gina and Patrick reference the Escaping Escrow – Reps & Warranty Insurance podcast episode on the Colonnade Middle Market Mergers & Acquisitions podcast. They also reference Colonnade's coverage of SPACs, the SPAC Attack Quarterly Updates. Learn how Colonnade developed our proprietary index and read our latest SPAC quarterly update. Read the interview transcript: Patrick Stroth: Hello there, I’m … [Read more...]
Industry Overview: Vehicle Service Contract Administrators
Vehicle Service Contracts (“VSCs”) are policies sold to consumers that provide coverage for a range of mechanical and cosmetic failures on a vehicle. The typical coverage areas are often for failures related to engines, electronics, windows, etc. In addition, administrators usually offer add-on options and packages for plans providing additional coverage for areas such as tires and wheels, exterior appearance, interior appearances, and even key fobs. The objective of a VSC is to provide coverage for areas that a vehicle insurance policy would not cover. For example, anything related to a car accident would be an insurance claim, not a VSC claim. Value to Consumers The number one value … [Read more...]
Industry Overview – Insurance Premium Finance
Insurance Premium Finance – What is it? The Insurance Premium Finance (“IPF”) industry facilitates the purchase of insurance policies for those who cannot afford to pay lump sum up-front premiums or those who wish to spread the cash flow burden out through the policy term. Premiums can be financed for commercial or consumer insurance policies, but it is more common for commercial. IPF firms help drive growth in the insurance markets and deliver peace of mind for borrowers by providing accessibility to those who may not otherwise have the coverage they need. How Does Insurance Premium Finance Work? IPF lenders provide the funds to the carrier in exchange for security in the … [Read more...]
Jeff Guylay interviewed on the Monitor Daily Podcast
Three Key Questions for Equipment Leasing Firms Considering an M&A TransactionI was honored to appear with Rita Garwood on the Monitor Daily podcast this month. This article is based on that interview, and you can listen to our discussion by clicking the link posted at the bottom of this article.Our discussion focused on how smaller independent equipment finance companies can take successful steps to benefit from today’s highly favorable Mergers & Acquisitions (M&A) market. As the leader of Colonnade Advisors’ specialty finance practice, I love assisting independent owners who are considering selling all or a portion of their business. In this interview, I … [Read more...]
Pick Your Partner – The Exclusivity Phase
Exclusivity/documentation is the final phase of the sales process. This phase occurs when a seller goes exclusive with a single buyer. We generally have received several bids and determined the winner of an auction. Both parties sign a letter of intent ("LOI") at this phase, and the seller agrees not to provide information or engage with any other potential buyers. The seller is essentially going off the market, which can be a bit scary because, if the deal does not move forward with the exclusive buyer, we will have to go back to the other bidders. We keep the other bidders warm and engaged in a limited fashion to ensure that we have backups. TASKS COMPLETED DURING THIS PHASE We work … [Read more...]
Valuation: What is your company worth?
Valuation is the process of determining what your company is worth. In the M&A process, it is often performed ahead of going to market. VALUATION METHODOLOGIES There are three primary valuation methodologies: 1) comparable transaction multiples, 2) comparable trading multiples, 3) and discounted cash flow analysis. There are also other types of valuation methods that are not as relevant to middle-market M&A; therefore, this blog will focus on the three main ones. Comparable Transaction Multiples Comparable transaction valuations refer to what the market has offered for companies comparable to the company being evaluated. For example, if a company sold at eight times … [Read more...]
Value Drivers in Middle Market M&A Transactions
The value of a company is determined by more than just the financial numbers. Two companies in the same industry can have the same EBITDA (Earnings Before Interest Taxes Depreciation and Amortization), but one is worth 8x while the other is worth only 6x. There are numerous factors that drive value, the most common are as follows. Serving a large, addressable market drives value because it offers significant growth potential in terms of growing market share. An addressable market is one that is fragmented, meaning no one company is large enough to move the market in a particular direction. Consolidated markets offer far less avenues of growth as the biggest players often dominate the … [Read more...]
Gina Cocking interviewed on the ConsumerFi Podcast
Gina joined the ConsumerFi Podcast for a discussion on preparing business for sale, touching on subjects like how diversification can be a double-edged sword, the macro effects of the current day trading trend, and how to avoid accidental compliance that can lead to huge headaches down the road. Listen to the Podcast here. Gina and Joel reference the Middle Market Mergers & Acquisitions Podcast which offers actionable advice and strategies for selling your company and is aimed at owners of Middle Market companies in the financial services and business services sectors. Read the interview transcript: Joel Kennedy: You're listening to the ConsumerFi Podcast … [Read more...]
Rollover Equity: A Second Bite at the Apple
Rollover equity is a form of contingent consideration in which the sellers reinvest a portion of their proceeds into equity and ownership of the new or acquiring company. The main purpose of rollover equity is to align interests. The primary advantage of rollover equity for the selling party is it gives the owner(s) a second bite at the apple, meaning they get to participate in the equity appreciation of the combined entity. Rollover equity can usually be structured on a tax-deferred basis. From the buyer’s perspective, it ensures management is motivated and incentivized to hit their projections, and it reduces the amount of upfront cash the buyer has to fund to close the deal. In … [Read more...]
Reps & Warranty Insurance
Reps & warranty insurance insures the buyer from a breach of reps & warranties in the purchase agreement. A purchase agreement's representations can include data security, outstanding taxes, and accounting policies, which insurance would not otherwise cover. If there’s a breach, the buyer (or seller) would tap the insurance policy instead of an escrow or other mechanism. Without reps & warranty insurance, a portion of the seller's closing proceeds would generally be held in an escrow to protect against potential breaches. The escrow is typically 10% of the purchase price and stays in place for 12 to 24 months. Reps & warranty insurance can … [Read more...]
DIY Banking vs. Hiring an Investment Banker
News of a sale of a company can spread like wildfire. Bring in the experts to manage the process, and don’t try this at home. When news first spreads about the sale of a middle market company, it is common for the seller to receive direct inquiries from interested parties. At this point, it can be tempting to ditch the sale formalities and banker fees. Individuals unfamiliar with investment banking may not see the value of hiring bankers to sell their company. Ultimately, when it comes to finding the broadest universe of buyers, creating a competitive process, and structuring a deal, the benefits of hiring an investment banker outweigh the costs by millions. Striking a great deal … [Read more...]
Potential Doubling of the Capital Gains Tax Rate Drives Strategic Discussions Among Business Owners
Whatever your political affiliation, U.S. business owners are assessing the likelihood, timing, and impact of tax proposals from Vice President Biden and the Democrats if they win the White House and control Congress. This blog post focus on potential changes to investment taxes and, in particular, the possibility of long term capital gains rates doubling to nearly 40% from current levels of 20%. Including the 3.8% net investment tax already in place, capital gains could be taxed at a higher rate than ordinary income in the new administration. PROPOSED CHANGES: Significant changes are expected to corporate tax rates, personal income tax rates, investment taxes, international taxes, IRS … [Read more...]
M&A Due Diligence: Technology Diligence (Part IV of IV)
Even if your company is not a technology company, technology-related aspects are important to investors during the process of capital raising or when getting ready to sell your business. Why are these technology-related aspects important? The elements of technology that support your business on a day-to-day basis can both limit and accelerate your company’s revenue and profits, which drive valuation. When investors and our team at Colonnade Advisors come in for due diligence, we look at all of the aspects of the technology that support your business operations: Hardware, including networking and servers Software, especially understanding what is off-the-shelf vs. home-grown … [Read more...]
Overview of Minority Recapitalization
An attractive transaction option for business owners who want to continue to maintain control of a growing business There are two types of recapitalization options for business owners—majority and minority. This article will focus on minority recapitalization. What is Minority Recapitalization? In a minority recapitalization, the investor provides debt and equity capital in exchange for 20-49% of the company. A transaction is typically structured with preferred equity that guarantees a return for the investor via a liquidation and dividend preference over common equity. The return can be a combination of cash coupon and deferred interest. The principal will be repaid after the senior debt … [Read more...]
M&A Due Diligence: Accounting Diligence (Part III of IV)
The accounting diligence process examines the accuracy of the historical financial statements and assesses the forecasts. When going to market, it is crucial to have accurate, consistent, and timely financial information that ties with the company’s operational data to avoid delaying the sale process. Preparing for accounting diligence can be the most intensive step in the sale process, but it is necessary. Weak accounting (numbers and processes) will decrease the value of a company. A company preparing to go to market must have monthly financial statements in GAAP, and if relevant to the company and industry, cash. Note that cash basis financial statements adjusted to GAAP at … [Read more...]
M&A Due Diligence: Legal (Part II of IV)
Before purchasing a company, the buyer should understand not only the financial risks associated with the acquisition, but also the legal risks. Some of the most important talking points Colonnade engages in with both parties' legal teams include gathering all relevant documents, reviewing tax history, reviewing intellectual property, and discussing past or outstanding litigation. Before moving into any sensitive discussion, be sure to establish confidentiality through a non-disclosure agreement. Relevant Documents A business may fit on a strategic basis, however upon further review of certain documents, the deal may be derailed. Items such as supplier contracts, leases, employment … [Read more...]
M&A Due Diligence: Business Diligence (Part I of IV)
In business diligence, a buyer will investigate every aspect of a company's business, including its products and services, marketing and sales, reputation, brand, business processes, strategic positioning, customers, competition, market size, growth opportunities, scalability, organization structure, employees, and management. A buyer will review all of a target's products and services to understand their nature, the process of creating the product or service, pricing, profitability, liability, the end customer, and competitive positioning. Included will be a review of vendors and contracts. Buyers often request interviews with vendors and customers. A company’s go-to-market strategy is a … [Read more...]
The Process of Selling Your Company
The process of selling a company can be complicated and requires a lot of time and effort. Having a defined process and timeline in place is critical to ensure a successful transaction. Colonnade brings a process-oriented approach to each deal to help each of our clients navigate this challenge. The key milestones in the sales process are outlined in the graphic below. Colonnade's timeline for a typical sale transaction consists of four phases: Pre-Marketing, Go To Market, Management Presentations / Buyer Diligence, and Exclusivity / Documentation and generally lasts around 16 weeks. Phase One: The first phase is the pre-marketing phase. Colonnade, as a sell-side advisor, performs an … [Read more...]
Earn Outs in M&A Transactions
Earn outs are a form of contingent consideration often used in deals, particularly middle market transactions. The buyer pays additional consideration if specific performance targets are achieved or events occur. Earn outs are used: to bridge valuation gaps (which widened in the recent sellers’ market), to motivate management in the short to medium term, to hedge risk in high-growth, competitive sectors such as software or tech-driven services, and to align interests in businesses that are reliant on the seller’s management to remain involved to execute on growth plans. How often are earn outs used? Over the past few years, earn outs have been used at varying rates. In 2019, 22% … [Read more...]
Gina Cocking interviewed on the Auto Remarketing Podcast
This episode of the Auto Remarketing Podcast ventures into the investment world with Gina Cocking, who is managing director of Colonnade Securities, a Chicago-based investment banking firm that specializes in merger and acquisition advisory services. Cocking not only shared an assessment of the current investment landscape, she also discussed the firm’s recent examination of the auto inspection and warranty claims management industries and why investors might be interested in these spaces. Listen to the Podcast here … [Read more...]
Providers & Administrators Interviews Gina Cocking
Gina Cocking was recently appointed CEO of Colonnade Advisors, a boutique mergers and acquisitions investment bank with expertise in the automotive F&I industry. Cocking has a storied professional background that includes high-profile positions in investment banking and as chief financial officer (CFO) at major financial institutions. Cocking served as vice president at Colonnade from 1999 to 2003. She returned to the company in 2014 with CFO experience. Read full interview here … [Read more...]
Middle-market M&A continues in a downturn
Yes, we are clearly in a recession. 21.4 million jobs have been lost. Consumer spending is down 7.5% as of April 1. $669 billion in PPP and $600 billion in Main Street loans are being extended by the government. What does this mean for middle market M&A? The first weeks of the coronavirus crisis paused deal-making. Financial buyers had to redirect their focus and energy to the health of their portfolio companies at the expense of new deal activity. Strategic buyers were conserving cash and shoring up operations. Deals in progress were re-evaluated, and some were put on hold. But now, like the spring flowers of Mother’s Day, deal activity is beginning to perk-up. Should we look back to … [Read more...]
Gina Cocking interviewed on Build a Better Agency Podcast
Most agency owners hope to sell their agency someday down the road. If that’s you, understanding how agencies are valuated today will help you maximize that opportunity whenever it comes. Even if you aren’t interested in selling, you can and should still be beefing up your agency’s value. Gina Cocking joins us for this episode to provide an investment banker’s perspective on the valuation and sales process. She’ll walk us through the key items investment firms look for in your agency’s valuation and explain the technical numbers-side. She’ll also help us identify ways you can add value in advance. Listen to the podcast here … [Read more...]
Gina Cocking has been appointed to the Board of Directors for CIB Marine Bancshares, Inc.
BROOKFIELD, Wis., Nov. 19, 2019 (GLOBE NEWSWIRE) -- Bank holding company CIB Marine Bancshares, Inc. (OTCQB: CIBH) announced today that Mses. Gina Cocking and JoAnn Cotter have been appointed to its Board of Directors, effective November 21, 2019. Ms. Cocking is based in the Company’s Chicagoland market and currently serves as Managing Director and Chief Executive Officer of Colonnade Advisors, LLC, an independent investment bank focused on the financial services and business services sectors. Ms. Cocking will stand for election at the annual meeting of shareholders to be held in 2020. Ms. Cotter is based in the Company’s Wisconsin market and is a retired partner of Wipfli LLP where … [Read more...]
Gina Cocking of Colonnade Advisors named to 2020 Most Influential Women in Mid-Market M&A
Mergers & Acquisitions has named the 2020 Most Influential Women in Mid-Market M&A. This marks the fifth year we have produced the list. It’s been gratifying to watch the project evolve over the years – and become more influential itself. This year, we received more nominations than ever before. As a result, we expanded the number honored to 42 in 2020, up from 36 in 2019. Some of the names are familiar to our readers and have appeared previously. Pam Hendrickson, the chief operating officer of the Riverside Co., for example, continues to expand her sphere of influence. In addition to playing a pivotal role at a leading private equity firm, Hendrickson … [Read more...]
Colonnade publishes article with The Monitor
INDEPENDENTS: The Innovators of Today & Tomorrow BY CHRISTOPHER GILLOCK The size and market share of independent finance and leasing firms will fluctuate with the economic cycle, but the sector will always play an important role in the industry. Our industry’s $1 trillion size combined with the wide variety of equipment users’ requirements, creates multiple segments and a plethora of opportunities for creative entrepreneurs to disrupt and innovate. As the financial crisis and recession of 2008-2009 faded and the economic recovery lengthened, commercial banks and other financial institution “rediscovered” the equipment finance and leasing sector. This led to a flurry of M&A … [Read more...]
Dealership M&A Activity Continues to be at Record High
Dealership consolidation has accelerated in 2019. In the first quarter of 2019, 54 dealership transactions were completed, representing a 38.5% increase over the first quarter of 2018. Domestic franchise dealership consolidation continues to increase while non-luxury foreign franchise, such as Hyundai, Kia, Mazda, Nissan and Volkswagen have declined. This heightened activity was primarily driven by private buyers, fueled by private equity, who acquired 95% of the franchises sold during this period. 1 Why does dealership consolidation matter to the auto F&I industry? Recall from Colonnade’s latest whitepaper on the VSC industry, the most significant challenge to administrators and … [Read more...]
Gina Cocking featured in Agent Entrepreneur
Is It Time to Sell Your F&I Agency? M&A is top of mind for many in the industry, as F&I agencies are being acquired at a rapid pace. Over the past three years, at least 10 F&I agencies have been acquired by administrators, insurance agencies, and consolidators. These acquisitions are fueled by an influx of private equity capital and motivated by the need for acquirers to grow and lock in distribution channels. The rapid pace of agency consolidation is not expected to abate for the foreseeable future. The F&I industry is stronger than ever. In 2018, franchise vehicle sales, excluding certified pre-owned, were 29.8 million vehicles, a 14% increase over 2015, and we expect … [Read more...]