Jim’s Blog

Reflections on the Kansas City Market and our clients (Part 2 of 2):

 

My previous blog highlighted some of trends we are seeing in the Kansas City market in the industries and clients we serve.  These trends can be verified by sources such as the recent Country Club Capital Advisors report on M&A activity The State of M&A in Kansas City

The trends of services support needs across all the companies also share some things in common. Here are some of the most common services we’ve provided most recently:

  1. Due diligence services –digging into the financial, operational and growth areas of the targeted company with expedited delivery times. This includes mining data out of multiple systems and arranging the data in common ways to enable further analysis. It also includes really understanding the human capital side of the transactions.
  2. Risk management – identifying potential areas of risk, categorizing the risk and developing mitigation plans.
  3. Project management – reducing the overall transaction timelines by bringing all the stakeholders together through defined processes to make efficient use of everyone’s time.
  4. Data analytics – Identifying data in ways to better support the company decision making (client profitability, sales executive effectiveness, product profitability, etc.). including gathering data and external market comparisons.
  5. Executive decision making – Improving the quality of data so that better decisions can be made on selling/buying prices, quality of earnings, future potential for profits and clear integration plans that deliver results for the buyers. All this is ‘fact based’ versus gut decision making.  And all of this is focused on growth goals and execution.
  6. Post Merger Integration – specific, actionable plans that cover the first 90 days of an acquisition that provide business results in line with the original investment acquisition thesis and goals.
  7. Operating partner roles – Flexible, highly skilled resources that can fill either a short term or longer term role such as a CEO, CFO, COO, HR, Sales or Operations.

These are exciting times given the strength of our economy and the aging population.  The younger workforce is bringing in new ways of thinking and working and challenging past paradigms.  The time is right for companies to challenge their existing business models and methods of operations In order to prepare for the future.

 

Jim Wadella, Managing Member

Published: March 13th, 2019

Reflections on the Kansas City Market and our clients (Part 1 of 2):

 

As I reflect on the business growth of the past 18 months across Kansas City businesses, I see distinct trends. We touch the growth and strategy of many mid- to large-size companies across Kansas City by providing management services, advisory services, leadership services and board positions for the organizations we are involved with.

2019 brings exciting times given the strength of our economy and the aging population. The younger workforce is bringing in new ways of thinking and working and challenging past paradigms. These trends in companies are causing specific actions to take place to improve the businesses.

The trends of growth and challenges we have been seeing across industries like HealthCare, Manufacturing, Insurance and Engineering include:

    • Private healthcare – Private Equity firms more active in practice roll ups and partnering with owner/operators.  The new business entity promises better sales multiples for the Doctors, clear exit paths and leverage of scale (provider contracts, common IT and back office systems, new services, etc.)
    • Private healthcare – new business models continue to enter the markets to disrupt the craziness around the costs for healthcare services driven by the power of the hospital systems combined with Insurance providers and Third Party Administrators.  These new business models need capital and thoughtful market entry in order to dance with the elephants.
    • Insurance – companies getting more scale through acquisitions (vertical and horizontal), leveraging the client portfolio and added new services to existing clients to retain more.
    • Business brokers – smaller company sizes beginning to pick up exit activity (more sellers testing the market) in the $1M-20M revenue range.  These transactions are supported by a fractured broker model that provides inconsistent results for sellers and buyers.
    • Engineering services – business improvement services based on process improvements and looking at the business in new ways in order to enable stronger results.  Smaller companies need to partner more effectively while large companies still operate as they have for many years.

Many of the above situations are accompanied by inadequate staffing, hair on fire, time is of the essence challenges that can require external assistance.

All of the above have a few things in common that we have been asked to deliver on.  See part 2 of 2 for the conclusion and some ideas on how other companies are addressing the trends and improving their businesses.

 

Jim Wadella, Managing Member

Published: March 6th, 2019