In this episode of the M&A Launchpad Podcast, hosts Feras Moussa and Casey Minshew sit down with J. Patrick Galleher, CEO and Managing Partner of Boxwood Partners, a sell-side investment bank focused on lower-middle-market transactions around the $100 million mark. Patrick breaks down how a seven-month, auction-style sell-side process really works, from building a curated buyer list to moving from IOIs to LOIs, running management meetings, and closing with the right private equity or strategic partner—not just the highest bidder.
Whether you are an independent sponsor, operator, or founder planning a future exit, this conversation gives you a front-row look at how serious $100M+ sell-side processes are run, what top bankers look for in buyers, and how to set yourself up for a successful transaction and a strong second bite at the apple.
In this podcast episode, we discuss:
- What Boxwood Partners does as a specialized sell-side investment bank and the types of clients they represent
- Why most deals they run involve founders and families rolling 15–40% of equity into NewCo instead of selling 100%
- How their typical seven-month process works, from sell-side QofE through IOIs, management meetings, LOI, and final diligence
- How they use a broad but curated buyer list of 150–350 targets to create a competitive auction process
- Why indications of interest (IOIs) matter, how they are evaluated, and how they narrow the field from IOIs to management meetings
- How capital structure and rollover equity really work in a $100 million deal, including a 50/50 debt and equity example
- The reality of management incentive pools, dilution, and bringing in new executives such as a post-close CFO
- Common seller misconceptions about private equity and why modern PE is more focused on growth than pure financial engineering
- The biggest mistakes founders make during a sale process, including counting the money too early and taking their eye off the business
- Why sell-side quality of earnings (QofE) is critical if you want to control the narrative and avoid surprises
Patrick’s Contact Info:
- LinkedIn: https://www.linkedin.com/in/patrickgalleher/
- Website: https://www.boxwoodpartners.com
- Email: See contact options at https://www.boxwoodpartners.com/contact/
- Company: Boxwood Partners
Additional Resources
M&A Launchpad Conference:
M&A Launchpad Conference – Upcoming May 2, 2026 in Houston, TX. Get your ticket at https://www.malaunchpad.com and use code LAUNCH for $150 off.
Sponsored by O’Connell Advisory Group
Work with a trusted Quality of Earnings and Financial Diligence partner who focuses solely on business acquisitions.
Visit: www.oconnelladvisorygroup.com
Contact Casey Minshew and Feras Moussa at info@equity-launchpad.com
Equity Launchpad helps founders and operators learn to buy, operate, and scale small businesses
Learn more at https://www.equity-launchpad.com
🎧 Podcast on YouTube: https://youtu.be/WdipSncvnGw
🎧 Podcast on Spotify: https://open.spotify.com/episode/630iPkL2NKQFVABkMoxHug?si=QjRbew0oTTee8t4wMSp3lQ
🎧 Podcast on Apple: https://podcasts.apple.com/us/podcast/how-%24100m-sell-side-deals-really-get-done-with-patrick/id1740382586?i=1000737593622
Transcript
00:00 All right, on today’s episode, we interviewed Patrick Gallagher from Boxwood Partners where we really did a
00:06 deep dive into what does sellside brokerage look like at a bigger level, right? The deals they’re transacting are
00:12 in that $und00 million range and really talk through, you know, how does a seller start to think about that? How
00:19 does the broker start to approach the seller and what are some of the mechanics they start to put in place? And then ultimately, how does a
00:24 transaction of that size get completed, right? How are they vetting the III? How are they doing the management meetings?
00:31 How are they really going through the whole process to get to the finish line? So, Casey, what were some of your takeaways?
00:36 Yeah, you know, forget forget deal size for our listeners, right? You know, take that out of the box. You’re you are
00:42 doing what a salesside broker does. You’re talking to the seller and you’re taking them through a process, right?
00:47 You may not do massive management interviews, but all of these stages and steps are critical to get to a deal
00:54 closing, right? even talking about a quality of earnings, uh, being able to peg and set a good valuation. So, all of
01:00 these things are part of the role. So, I felt this takeaway of this call or this podcast was outstanding. Answered a lot
01:06 of questions for me in the process. And if you’re an independent sponsor, this is a must listen because this is a big
01:12 part of what you’re going to be doing every single day. Yeah. And the interesting thing, like Casey said, like you know, people are doing these steps, but in this episode,
01:19 we really talk about what does it look like whenever these steps get institutionalized, right? How do you do them at a higher more kind of focused
01:26 level? And so, lots of good nuggets on this one. Yeah. And I will tell you if you’re listening and you are an operating
01:31 partner or you’re somebody that is interested in participating in some of these deals, you know, reach out to M&A
01:36 Launchpad and also to Equity Launchpad. We’d love to chat with you and take it from there.
01:44 Welcome to the M&A Launchpad podcast with your hosts Casey and Ferris with Equity Launchpad. On this podcast, you
01:50 will gain insights on acquiring, investing in, and selling profitable businesses in the lower to middle market. Whether you’re a business owner,
01:55 investor, or spying entrepreneur, at Equity Launchpad, we will provide you with the knowledge, guidance, and capital to navigate the world of mergers
02:01 and acquisitions. All right, guys, just take one second here real quick. When you’re buying a
02:06 business, ensuring the financial health of the company is critical. And that’s where a quality of earnings partner comes in. Quality of earnings gives you
02:13 confidence in the financials of the company that you’re purchasing. It aims to protect your investment and ensure that you’re stepping into a profitable
02:19 business on day one. Patrick of Okonnell Advisory Group is your dynamic quality of earnings partner. He’s here to help
02:25 you buy the right business on your timeline. Patrick’s entire practice is focused on business acquisitions. Your
02:30 niche is his niche. And over the past decade, Patrick’s helped more than 200 buyers like yourself successfully
02:35 purchase and operate enduring profitable businesses. In fact, Patrick’s helped some listeners of this show. So, if
02:42 you’re buying, looking for help with the quality of earnings, financial due diligence, network capital, and more,
02:47 head to okonelladvisor.com or just click the link in the show notes. Hey Patrick, welcome to the show.
02:52 Thanks for having me. Appreciate it. No problem. So, for our listeners, Patrick, you want to give a little bit
02:57 of your background about what you’re doing and more importantly, maybe share about where you’re living right now. So,
03:02 you know, we talked about that a little bit before. Cool stuff. Yeah. Now with well box partners we’re a
03:08 sellside investment bank uh headquartered in Jupiter Florida and we have offices in Richmond Virginia
03:15 Charleston and Jupiter and then I I live down in Dorado Beach, Puerto Rico. So uh
03:21 commuting every week between the uh various offices. So for our listeners, you know, tell us
03:26 a little bit about a sellside broker like what’s the you know, how do you work? How does that you know, how does that benefit you know guys that are
03:33 looking for companies and gals that are out there? What’s the advantage? Well, we’re typically hired by the um
03:40 the family or the founder or the private equity group that holds the company at the moment. And then we run a very um
03:47 defined process over seven months to find the right private equity or
03:54 strategic buyers for that company. So, we run a two bid process. We go to IAS.
03:59 Typically, we go out to about 350 uh 250 to 350 potential uh targets on
04:06 the uh process and then we narrow it down through uh indications of interest and then we take the top eight of those
04:14 and go to management meetings and then we narrow it down to one LOI for the last uh 45 days of due diligence. So, so
04:22 we we we we equate it to it’s an auction process. it gets the best uh valuation
04:28 for for our clients, but it also helps them, you know, it’s kind of like speed dating towards the end with the uh
04:34 management meetings. They get to meet uh great private equity groups and independent sponsors and uh you know,
04:41 figure out who they really want to go on this next part of the journey with uh to to grow the company even further. So, so
04:47 we really help them find the right partner and hopefully we can get everybody to the same valuation at the
04:52 end of the day so they get to choose the right partner at a really competitive valuation. Got it.
04:58 So, a few questions right off the bat, right? So, you know, it’s funny because
05:04 there’s different things around indication of interest to a letter of intent, right? That indication of interest, uh, I’ve always struggled with
05:10 it, right? Because you’re really just putting out what what you could potentially be. So in your advice when
05:17 you’re working with somebody on the indication of interest and we don’t really know what the multiples are going
05:22 to be or values or we’ve just done kind of the the analysis. What is your advice on because we do need to put an
05:28 indication of interest to let people know hey we want to get it off. Are you thinking is there an exclusivity in that
05:34 indication of interest? Is there then how do you assess like how would be your
05:39 advice for somebody doing an indication of interest uh to get to the seller? Yeah. So I mean typically you know on a
05:46 on our average deal we get somewhere between 15 to 30 indications of interest
05:52 and we get them all in the same day. So you you can you can see pretty quickly on whether a uh a target slashinvestor
06:00 buyer is thinking about this business at a five or six times multiple or 15 times
06:05 multiple. So it gives us the opportunity to narrow the field and make sure our clients don’t waste time. You know, if
06:13 there’s 10 guys, 10 firms thinking about this company at 10, 11 times IBIDA,
06:20 there’s no reason to sit down and meet with uh firms that are thinking about it at five and a half or six times. So, it
06:25 really just helps narrow the funnel down. So, we put in the room the best
06:31 possible partners, you know, who could hit the uh the highest enterprise value
06:36 at the end of the day for the LOI. So um you know and you know you know we we
06:41 always ask uh to include management option pools. Some private equity firms
06:47 always do 15% some do 10%. Um it might not you know every client has a
06:53 different um thought process behind management incentive pools and uh
06:58 whether they want to roll 20% forward or 40% forward. And so the IOI just gives
07:03 us a good chance to narrow the field down based on what that private equity group typically uh typically looks for.
07:10 Got it. So I mean a couple questions just to help frame it for the listeners, right? What size deals are you typically
07:15 looking at and are your sellers looking for complete exits or are they more so
07:22 looking for partial exits to grow? Right. You mentioned kind of the allocation of you know pool for other
07:29 executives, right? How does that come into play? Yeah, we we hardly ever do a deal that’s
07:34 100%. So, you know, most of our deals are, you know, our our clients are
07:40 rolling forward 15 to 40% into the new co um post transaction. So, they’re
07:47 they’re going to have a second bite of the apple with the uh private equity group. Um, you know, we we spent a lot
07:54 of time with our clients prior to um going to market on trying to figure out
07:59 what their objective is. You know, if it’s a family that um wants to retire
08:05 and doesn’t want any, you know, exposure going forward, um that’s a different type of process, different target list
08:12 than somebody who says they have three to five years to make that next run for
08:18 the next, you know, next bite of the apple. So, so we really kind of curate our target list on each deal based on um
08:26 what our clients want to achieve. But uh but yeah, so you know, our our average
08:31 deal is probably our clients rolling 20% of the enterprise value back into the
08:36 deal um and owning um you know 30 to 40%. Got it. And what dollar size are these
08:42 deals though? Are they $2 million deals, $20 million deals, hundred million dollar deals? What’s kind of the average for you guys? Our average deal is right
08:49 around 100 million. So right around 100 million. So the stuff that’s already, you know, because we like to say that we like to take it from family owned to management, right?
08:56 To then mature it to where it can have that bigger exit. And so you guys are already essentially really you’re you’re
09:03 you’re already po you’re really private equity/post private equity, right? Where it’s already mature enough, $100 million
09:09 is big enough, has the backend, has the operational cloud, and it really is a
09:14 investment and numbers game from there on. It’s not there’s not a complete
09:19 repositioning of an asset in that scenario, right? Yeah. No, we I would say probably 65 to
09:27 70% of our deals are founder familyowned and 30% are private equity owned already. Got it.
09:33 We’re uh we’re doing the sell side for. So when you do the management, so I’m roll let’s just say I’m working with
09:38 you. I’m going to roll in 30% of my equity into the new co, right? So then
09:45 does the private equity firm you work with typically then go yeah we’ll give 10% additional uh management pool or do
09:51 you typically kind of say hey well you’re rolling in equity how how does that management pool typically get
09:57 structured whose equity does it come out of is it usually coming out of the yeah that how does that usually structure
10:03 well it would be dilutive to the postco equity uh cap table so so I mean just take a $100 million deal
10:10 for example a $100 million deal is going to be funded 50 50 million of equity, 50 million of debt. I’m just using those
10:16 for round numbers. So So if if you sold your business for 100 million to own 40% post transaction,
10:25 you’re rolling you’re taking 80 million off the table. You’re putting back 20 million, but the new equity table is
10:31 only 50 million of equity because you’re using 50 million of debt. So you’re owning 40% postc close. Yep. for $20
10:40 million of the hund00 million enterprise value. So you’re taking 80 million off
10:46 the table and you still end up owning 40% of the company. So the 10 to 15%
10:52 equity pool for management would equally dilute
10:58 that 50 million cap table post close. So you would get
11:04 diluted by, you know, basically, you know, 10 to 15% of your 40% postc close.
11:10 Got it. So everybody’s just agreeing up front that, hey, we’re going to do this transaction. We’re rolling this much and
11:15 we’re going to allocate x amount for executives and you know, everyone’s just basically taking that dilution equally.
11:22 for for example, if you need to hire a new CFO, which happens quite a bit in a transaction, first time a company’s had
11:28 50 million of uh of um you know, private credit fund debt or you know um they you
11:36 know, most CFOs of a family-run business hasn’t haven’t managed the covenants and the uh requirements of managing a u you
11:44 know, a $50 million debt facility. So, um, you might have to hire a new CFO
11:50 that, you know, you you put aside two or 3% of the option pool for them, uh, to,
11:55 uh, as part of their package coming in. Got it. And so, the question, I mean, what what are some of the biggest
12:00 mistakes your sellers, you know, make up front or let’s talk about two parts. What are some of their maybe biggest
12:07 like preconceived notions that are maybe inaccurate? And then from that, right, what are some of the bigger mistakes
12:12 that you see, you know, commonly made? Yeah. I I mean I think the biggest misconception is private equity is uh
12:20 all about financial engineering and not about strategy and growth. So it’s um
12:25 you know private equity today verse when I first got in this business back in ‘ 06 07 is a lot more about uh how can we
12:34 grow this business versus how can we manufacture more IBIDA from this business. So cost cutting uh
12:41 streamlining margin um productivity is much less important today or much less
12:49 in the forefront of the conversation than is how are we going to grow the top line? What new uh products services what
12:56 new geographies can we go into to drive the revenue uh stream verse how can we
13:02 cut cost and increase ibida. So it’s um I I think most families or most founder
13:07 owners think of uh big bad private equity um where most of the private
13:14 equity firms nowaday are much more added value on growth verse uh financial
13:19 engineering. Yeah. And and I’ I’d echo that too. I think the private equity gets a bad rap because the handful of bigf facing
13:27 things that failed get a lot of visibility and it’s private equity but the other 90% that transacted into just
13:33 fine don’t right and unfortunately part of the the movie Wall Street and you
13:39 know you look at all the movies around private equity and uh you know those were all based on early 90s late 80s
13:46 private equity uh funds and firms and uh you know the market really has changed quite a
13:52 Got it. Um and then maybe continue on. So then so that’s the biscuit notion.
13:57 What about the bigger mistakes that the that your sellers are making?
14:02 You know I you know in our you know we really want our clients once they’re
14:08 engaged to focus on the business and not focus on the transaction. So the biggest
14:13 mistake they can make is, you know, counting their money before the transaction happens, taking their eye
14:19 off the ball and uh not focusing on, you know, continuing to do what they’ve done
14:24 for the last 10, 15 years. And so, you know, if performance goes down during a transaction, you know, that’s the worst
14:32 thing that can happen to us. So we really try to do all the heavy lifting and make sure that our our clients are
14:39 free to run the business and focus on growth and you know maintaining their margins and and cash flow versus uh
14:46 focused on you know which conversation we had yesterday with which private equity group. So let’s kind of going back to the
14:54 capital stack as you’re going through that process. So I I want to sell for 100 million but the company also needs
14:59 20 million to grow right or it needs money to grow. So we solve for the 100
15:05 million. How do you typically see the growth capital solve for in that as well? Does it typically dilute down
15:11 everybody post close if we have to bring in new equity? How do you typically see all that come together
15:17 if there’s a true need for growth capital? um you know they’re they’re going to put a line of credit in place
15:23 or you know the the original debt facility would be a little smaller and they’ll have a line of credit put in
15:29 place to close. So it’s a non-dilutive line of credit that’s um you know so
15:34 your your your rollover of 20 million might only be you know 20% or 30% of the
15:41 postc close because a line of credit got put in place versus a full uh debt facility day one. So, um, it’s either
15:49 going to be diluted postclosed or pre-closed. So, it’s, uh, there there’s no way to bring in debt, you know, the
15:54 more capital. Uh, it’s going to dilute you one way or the other. And so, when do you start having those
15:59 conversations with your sellers? Um, is this like all the stuff you do in the beginning? Yeah. Yeah. Yeah, I mean day one, I
16:06 mean, we we sit down and try to design, you know, we spend a lot of time pre-engagement on making sure that uh we
16:13 feel comfortable that we can get a transaction done that our seller is going to agree with. Um, you know, based
16:20 on our experience and knowledge of the markets and where the markets currently are. So, you know, we’re not going to
16:25 bring something to market that we uh don’t believe we can get done at something that our acceler sellers are
16:31 going to be excited about. Well, I’m actually asking all these qu questions selfishly because I’m literally going
16:36 through this process right now. And um and so these are all like this kind of stuff is, you know, you know, you’re
16:43 obviously playing a poker game, right? You’re there’s a stage or there’s a there’s a turn, there’s a river, there’s
16:49 all that great all whatever analogy you want to make on the deal making. And I think that front end really getting
16:56 everybody in alignment on the front end is is just mission critical, right? because there’s if you miss a step or
17:03 you you you something goes to the side, you’re going to lose the deal. And so,
17:08 do you pull the trigger on like a business valuation at any point for these guys on the in in the process? Do
17:14 your buyers typically wait to the end? How do you start laying out true multiples like where you you kind of go,
17:20 hey, this is a this is a more of a market multiple that that that that fits in there. Do you guys do that in your
17:25 analysis? Um to to structure our engagement, we think
17:31 through valuation, but we we we do not do valuations with our clients. Uh we we
17:38 don’t uh you know, we we we put out uh you know, we we run the process and we
17:44 get the uh the market determines the value of where the deal is going to trade. So, we uh we we you know, we we
17:50 we want to make sure that we’re comfortable that we can get what our client expects, but we do not do any
17:58 type of um you know, you know, there’s there’s no pricing on any of our deals.
18:04 I mean, Got it. If private equity firm asks what what uh you know, I’m like, you just got to make
18:10 sure you out bid uh the other uh 150 200 private equity firms that are uh taking
18:15 a look at this. So it’s it’s uh yeah there we we don’t we don’t give any guidance uh uh to uh to targets or
18:24 buyers on any of our transactions. Got it. And so but but if you if you had a seller that was expecting a 20x and
18:31 you know that’s far from market, you’re not moving forward on that transaction, are you?
18:36 No, we’re not taking honest client. Got it. So yeah, you’re still you’re still to some extent you’re not
18:42 necessarily giving them valuations, but you’re giving them high level market guidance just to make sure that everybody’s in the right ballpark.
18:47 Right. Correct. Yeah. We’re uh we’re we’re looking what what the uh art of the
18:53 possible is based on their current financials and then all of our clients do a sellside quality of earnings with a
18:59 third party firm prior to us going to market with them. So, uh, great news.
19:05 Yeah, we we know exactly what um uh the buy side quality of earnings going to
19:10 find um before we go to market and we try to, you know, pitch and position
19:15 around the the good, the bad, and the ugly um in in our QV before we go to market. And
19:23 then also we have uh I think I think we have seven or eight uh team members at
19:29 Boxwood who did quality of earnings at uh at at big four and uh you know
19:34 mid-tier accounting firms before coming in uh onto the banking side. Yeah. And I think that is a critical
19:41 because right what is what is the true EVITA? What are the quality of those earnings? I think knowing that before
19:46 you go out to the market is critical, right? Because I I would imagine that would kill the deal if does their QV and
19:54 comes back and says, “Hey, the you’re off by 34 million here on revenue. What is this?” And and I could see that being
20:01 a big hiccup in the process. Yeah. I mean the the reason why it’s a standard practice now is private equity
20:08 firms always found more IBIDA in their QV than uh you know investment banks were showing in the books because there
20:16 was you know just got caught up a lot of one-time expenses and nonoperational expenses that were in the in the IBIDA
20:23 and um you know a 10 million IBIDA business was actually 12 and so the private equity firms were the buyers
20:30 were getting the benefit of that where now we can actually see it on the front and and um and and change our our models
20:37 and our u and our financials in the books. Nice. And so when you when someone wants
20:42 to get on your customer list, right? So they say, “Hey, I I’ I want to be talked to about your deals.”
20:49 So let’s talk about an independent sponsor because most of my listeners are either going to be an independent sponsor or they’re going to be, you
20:54 know, a searcher, which is is a different conversation on this conversation. So, what do you guys look for in that independent sponsor for you
21:01 guys to say, “Hey, yeah, we’ll we’ll go down the road and put you on our our list.”
21:07 Um, it’s um it’s a very high bar. Um, I’ll be honest, it’s uh we um we we we
21:14 need to have a really good relationship with the independent sponsor to get on our target list. We have to make sure
21:20 they have lenders that are um in their hip pocket that will support them on
21:26 deals. Um, we’ve done independent sponsor deals so uh very successfully,
21:32 but they were with independent sponsor firms that we knew very well and uh knew their track record or they spun out of
21:38 larger funds and they had, you know, really good support from the uh the uh
21:44 the private credit fund community on their um on their on their uh group. So
21:50 it’s uh but it is it is much tougher for an independent sponsor to win a process
21:56 per se just because when we narrow down from III to management meetings we really ask for private you know we ask
22:03 for lender um commitment letters or soft commitment letters we we want to know
22:08 that they’ve they’ve actually created their debt debt their debt decks for
22:14 their lenders. they’ve gotten, you know, buy in on the deal before they we invite
22:19 them to management meetings. Um, because you guys are obviously trying to pick the right horse. It’s a
22:24 long process, right? And you don’t want to go too far down the rabbit hole with someone that basically doesn’t have
22:30 their ducks in a row, right? And I think the other part of it too is you don’t want to lose your seller’s trust, right?
22:36 And I and I think maybe the question that I have around this is, you know, what were scenarios where maybe you
22:43 picked the wrong horse, right? and what what happened there, right? What were some of the things that either you didn’t catch or what happened with the
22:49 potential buyer that ended up resulting in just a failed execution?
22:54 Yeah, I mean I mean there’s a couple examples in my 18-year history where you
23:01 know private equity group independent sponsor u got all the way to the end and
23:06 uh last second they’re um their their equity their equity lead um bailed on
23:13 them and um you know the whole deal goes sideways and you know if they were a fund with committed capital it wouldn’t
23:19 have happened. So it’s uh so you know it just as a as as a banker we just need to
23:25 make sure that the independent sponsor has LP you know LP commitment and um you
23:31 know lenders you know it just adds another element of risk to the deal where you don’t have that with a
23:36 committed fund. So, kind of going back into the front end of the conversation, right? Because I think a lot of our
23:42 listeners are meeting with sellers. They’re having these conversations on the front end and and I am I follow a
23:50 consultive selling process, right? I’m more of a wanting them to know that, hey, I’m playing I’m playing poker with
23:56 my cards up. I I want to walk you through because I might be going most of these guys, this is the first time they’ve ever sold their business, right?
24:02 Uh these are not repeat sellers. uh they’ve built a family business or they’ve got a legacy and that stuff. So,
24:08 in your sales process on the front end, how long are you guys spending with the sellers um in order to before you go to
24:16 market? What’s typically your average? And then what do you what are all those stages you’re going through with them um
24:22 to educate them on what they’re up against? Yeah, I would say you it all depends. I
24:29 mean, you know, most of our uh clients are either repeat private equity groups that have used us multiple times or, you
24:37 know, coming through a referral from a former client. So, um you know, I would
24:42 say 20% of our clients we’ve been talking to for two or three years prior
24:47 to engaging. Um, you know, another 30 40% are referrals where, you know,
24:54 somebody they know in the industry used us and they’ve been told, you know, just
24:60 call Boxwood and use them. Um, probably another 20% are, you know, deals that
25:05 we’re pitching against two or three other investment banks that, you know, companies have already decided to go to
25:10 market and then the rest are private equity groups that have already used us. So, it’s uh so it’s really there’s a
25:17 there’s a pretty broad spectrum on how clients come to Boxwood. Um you know,
25:23 it’s it’s uh definitely three or four routes that uh that people get here. So, the we spent a lot of time with them
25:29 before educating them on Yeah. on what the process looks like. And then I engage with you, right? So, then you’ve got to to get ready to go to
25:36 market to do this stuff. What is y’all’s typical go to market process and and time frame?
25:43 sellside QV is first uh it’s two to three weeks usually two or three to four
25:48 weeks to put together the the teaser and and the sim then we’re in the market for 6 to 8 weeks I wise management meetings
25:56 and then the LOI phase and then usually 45 to 60 days of due diligence so
26:01 usually works out to about six and a half to seven months yeah not a short process and then maybe
26:06 on the um on the buy side how do buyers come to you as well right? Like are you
26:13 guys out there specifically trying to match buyers to specific deals? Is it, you know, just working your existing
26:20 database? How do you guys go about the buy side? Well, I mean, we we, you know, we we
26:25 narrow down. We we only go to 150 to 350 buyers on each deal. So, we we we have,
26:34 you know, a fairly substantial target list of, you know, private equity and strategic buyers by sector. And then we,
26:41 you know, kind of curate the target list for each deal based on size, sector,
26:47 majority, minority, uh, you know, whatever, you know, whatever type of
26:52 deal we’re trying to, uh, curate. Got it. Nice. And I imagine you guys have a nice marketing team that puts all that data
26:58 together once you once you collect all the the the data room and all of those documents. I imagine you guys put
27:05 together buyers like a rustic feel to it. All right. They don’t want it too polished.
27:10 No, no, it’s it’s I mean we we do have great data rooms, but it’s all the bankers doing I mean it’s all the you
27:16 know analysts associates VP I mean it’s it’s our it’s our team putting all that together. We don’t have a marketing team
27:22 at Boxley. Got it. Got it. Well, let me ask you one question then before we kind of come up on time. You know what’s maybe a couple
27:27 of deals that you guys have transacted? Maybe you know what industry were they in things like that? And on that same
27:33 vote, on that same vein, which is maybe give an example of one that just spurred a lot more interest than you guys were
27:39 expecting and you know, kind of just how that multiple maybe you guys went in thinking it’d be a seven and ended up
27:44 transacting at a 12 and what made that so attractive? I mean, that’s a uh got a lot of those.
27:51 Um but uh you know, one in Texas Well, you guys are the best sellers on the industry, so I’m sure you do.
27:58 Yeah. one uh one one one one deal in Texas was Parker Products. It was a food
28:04 ingredient manufacturer out of Fort Worth. Uh they were the original creators of the uh of uh God, what’s the
28:10 ice cream cone? Dumbbell ice cream cone or That’s ice cream.
28:15 Not Blue Bell. They they did uh they did uh some ingredients for Blue Bell. Um
28:20 but uh they they were food ingredient company coming out of Fort Worth and um we had a massive amount of indications
28:28 of interest on that deal. Great management meetings. Uh we were going through that process building a new
28:34 facility in Fort Worth at the time the Riverside company came in and uh won the
28:40 deal. And uh I mean but uh I can’t even remember at this point how many IIS we
28:46 had, but it might have been triple figures. um the level of interest we had in that deal. So, uh but uh yeah, we’ve had some
28:54 great deals out in Texas. Uh Steuart Hose and Pipe we did out of Fort Worth. That was a great deal. We ended up
28:59 selling that to Clayton Dublier and Rice. Um you know, tons of interest in
29:04 that deal. Much higher multiple than we expected. Um so, so yeah, so we’ve we’ve
29:10 got uh um you know, quite a few deals. Junk King um went for you know 50%
29:17 premium into what we expected. So um you know junk hauling business. So sorry. What business?
29:24 Junk. Junk King. I don’t know what that is. Junk King. They you know we we sold Junk
29:30 Luggers and Junk King. So they Junk King comes into your house and clears out all the junk and throws it away for you. And
29:37 uh uh that was owned by Norwest Equity Partners. Got it. Very cool. But uh yeah, all all all very
29:44 cool deals and and I guess maybe just to put a bow on it, the ones that really gained the traction, were they bought because of
29:52 strategic growth, you know, strategic roll in or was it that they had a clear path to continued growth and that’s what
29:58 attracted the buyers? I would say 80% of our deals are about
30:04 strategic growth verse uh you know some type of tie in. But uh we we do sell
30:10 quite a few franchiseors to um groups that own multiple franchiseors. So KKR
30:16 has a roll up out of Waco, Texas called Neighborly. We’ve done a lot of their um
30:22 uh add-on franchiseors into their uh into their group. So those would be more
30:27 strategic, but they’ve been able to grow a majority of those quite well after uh
30:33 after the deals have been done. My last question, give us give us a snapshot of a management meeting like what’s a what
30:40 is a well done management meeting where that you go, “Wow, that was well done.”
30:45 Yeah, it’s a conversation. Um, so our management meetings are three hours long. First uh 30 to 45 minutes is the
30:53 private equity group or strategic buyer explaining why their their money is greener than other people’s money. that
30:60 they’re trying to explain why their $100 million is better than the other guy’s $100 million. And then the next uh two
31:07 hours and 15 minutes is really just a conversation. We always prepare a management presentation deck. Um you
31:14 know, I I call it a management conversation uh referral guide. Um it’s really, you know, if we’re flipping
31:21 pages in that deck during the meeting, it’s a really bad meeting. We really want it just to be a free flowing uh
31:27 conversation between the two parties. And we want our we we we give all of our
31:32 clients kind of a pre um a predefined list of questions they should be asking
31:38 that uh potential investor buyer during the management meeting. So we we try to
31:45 turn it around by the end of our client actually driving the conversation and asking things about you know what’s
31:51 their operating cadence? Do they like weekly calls? Do they like quarterly board meetings? Do they want monthly
31:58 meetings? You know, you know, it’s it’s really about our client finding the
32:03 right partner to take it from 100 million to 500 million. And you know,
32:09 that’s not always the highest bidder. That’s not always the highest valuation. That might be, you know, someone at 90
32:16 million versus 100 million. But uh you know we’ve had many deals go to the second or third highest bidder because
32:22 they bought into their uh their partnership more than others. And is it let me ask this real quick. Is
32:28 it is it is it all the managers there? Is this typically like all management or do you typ every situation?
32:34 Everyone’s different. So sometimes just just the CEO shows up and or the owner or is it mainly a few of them?
32:40 I would say typically we always want you know at least three of the management team in the meeting. Um but uh you know
32:47 we’ve had management meetings with uh you know six seven on our side and six or seven plus the lenders on the other
32:53 side. So you know we’ve had rooms full of uh 16 to 18 people in the management.
32:58 Wow. So the lenders will come through. We don’t let the lenders ever speak. The lenders are in listen only mode even if they’re in
33:04 and are those typically in person or those teams I mean I feel like it’s very much a you want it in person but I’m just
33:10 curious kind of at that point in time what the level of commitment is. We we push it to in person. So if if if
33:18 a if a private equity group or a buyer is not willing to fly out to uh do an inerson meeting, um they’re they’re
33:24 they’re not going to get a management meeting. Yeah. They’re they’re they’re out. So um if they’re not serious enough to to
33:31 fit in their schedule and get out to uh and we do them all in the same week or, you know, 10 days. So we keep everyone
33:37 on a very defined timeline to make sure that we keep the competitive tension and the um and the process on time. So
33:45 nice. And so then as a seller, you just have to make sure to free up that week and then you can get back to focusing on
33:50 your business, right? So all right, we’re going to jump over to our rocket round. Patrick, I mean, first
33:56 off, I could talk to you for hours about this stuff. It’s fascinating. And I think we’re going to do a trip down to Puerto Rico. Trust me, Casey and I can
34:02 find time to come down there. We could do a prop management meeting if you’d like as well. Kind of ask more.
34:08 No, just just great stuff. And so, all right, so we’re going to jump into our rocket round. And for our listeners,
34:13 this is where we ask our guests three important questions. I’ll I’ll throw out the first one. What do you like to do in
34:18 your free time? I um I hear I play a lot of golf, so it’s uh I I I played in college, played
34:26 a little bit after college. Um but yeah, I still my dad was a golf pro, so golf’s
34:31 a big part of my life. That’s awesome. Got it. in case he can bring his daughter. She’s uh on her way. So, uh next question. Most memorable
34:38 moment in your business journey. Um so,
34:43 it would probably be one year out of college after I stopped trying to play golf for a living. Um, I had a meeting
34:51 with Yahoo and ended up uh cutting a deal with Yahoo back when they had 36 employees and uh ended up uh managing
34:58 some of their um Edgar filing uh web pages and and uh putting together a
35:05 service around that. So that was uh pretty instrumental uh when I was 24 23
35:11 or 24 years old uh you know finding Yahoo out there with you know at in a
35:17 very nent stage and being able to agree a deal. Wait wait wait I gota ask now because as a as a tech guy so wait you you did what
35:23 for Yahoo? You were basically you cut a deal to to do their Edgar filings just
35:29 for So we we we hosted pages in uh Europe and uh the US around their 10Ks, 10 Q’s
35:36 annual reports. I got you. Very cool. On Yahoo Finance and I did we did the same thing with NASDAQ and uh Barons,
35:44 Wall Street Journal, Financial Times, Hanza Block, Invest in France. Yeah. So
35:49 it was and then um in 989 99 we launched webcasting. So, um I competed with Mark
35:55 Cuban in the web casting space for Yeah. So, it’s uh so got into that and then did um went public in um in July of
36:03 2000 um over in London uh and became the youngest stock CEO on the London Stock
36:09 Exchange back in 2020. And then you sold everything immediately before the telecom boom just to make
36:14 sure you avoided that, right? I did not. You know, at 29 you’re not
36:19 quite smart enough to do that. Hold your oyster at that age. I I I I kept pushing my chips back in and uh
36:26 expecting it to uh so bought five other companies uh with all the cash. Um and
36:31 then ended up buying the company back in ‘ 06 with a private equity group and then got fired after uh a certain couple
36:40 probably six nine months and then started Box. So very cool. It was it was
36:45 a pretty uh pretty amazing track from u you know 1995 to 2007.
36:52 Um and uh it was great experience to start my career. So I’ve only really had two you know two two roles that and uh
36:60 and then uh then boxwood. Pretty amazing. Pretty amazing. All right last question. What is your favorite tool or resource? you know,
37:09 obviously chat, you know, AI now is incredible. I mean, it’s um you know, we we’re using a AI more and more every
37:16 day. Um I think it uh helps all of our team members get smarter on deals and
37:23 and you know, you got to you got to double check everything. It’s still a little wonky, but uh you know, six
37:28 months from now, it’s going to be even better than it was last month. And uh you know if if if you’re in the deal
37:35 market and and doing M&A and you’re not using AI to make yourself smarter and to
37:42 uh accelerate learning, um you’re missing a trick. Couldn’t agree more.
37:47 Couldn’t agree more. It’s got to be the most useful tool that’s come across uh in um you know, I
37:53 mean it reminds me a lot about 99200. Uh, you know, I’m I’m one of the few guys in the market that’s old enough to
37:59 remember Pets.com and and some of the things that kind of took off and fizzled, but uh AI really seems to uh uh
38:08 every aspect of AI seems like it’s really coming through in a in a way that’s going to make a huge change to
38:15 the market. I’m using it every day, so I’m I’m learning as I go, but it’s exciting stuff. No, agree. Patrick, how can the
38:21 listeners get a hold of you? The best way is to visit boxwoodpartners.com which is our website and uh I’m pretty
38:28 easy to find on LinkedIn or um you know just uh shoot us an email and uh you
38:33 know we we’d love to connect with anyone thinking about uh you know starting an exit process in the next uh year or two
38:40 and uh you know love to uh help help where we can. Absolutely. Look, thank you so much for being here.
38:45 This was I think that selfishly I think this was more for me than anybody else. But hey uh uh it was outstanding great
38:52 information and uh perfect timing for us on these questions. So just huge huge interview. Really appreciate it.
38:58 Okay. Appreciate it guys. Thanks for having me. You too. Appreciate it. Yeah. Have a great day. Thank you for listening to the M&A
39:04 Launchpad podcast. If you’ve enjoyed today’s podcast and would like to support us, please leave us a rating and a review after you listen. If you’re
39:10 looking for guidance on your next business acquisition or sale, capital to support your next business transaction,
39:16 or to invest in a private equity opportunity, visit equityaunchpad.com to learn more and to connect with our team.
39:22 If you know of an individual who would be a great guest for the show, head over to equityaunchpad.com/nominate
39:29 where you’ll have the chance to refer yourself or someone else to be a guest on our show. I’m Casey Mchu and I look
39:34 forward to talking with you next week.
