Succession plan decisions 🤝

Welcome back to another edition of The Wise Exit!

In today’s newsletter: 

• 3 lessons from Jeff Chapin about his exit from Casper 🛌

• A brand new episode of the Cashing Out podcast 🎧

• Our round-up of interesting M&A transactions from the past week 💰

Let’s dive in!

Buyer Spotlight

Every week we feature 4 buyers who are looking to acquire businesses in specific industries:

• Buyer seeking industrial businesses, light manufacturing, field services and industrial distribution - with EBITDA > $4M.

• Buyers looking for tech-enabled services companies (B2B businesses with strong cash flow that have or could enable technology to gain an edge) - with EBITDA > $2M.

• Buyers seeking healthcare staffing companies, ideally nursing related, as well as IT/technical staffing - with EBITDA > $2M.

• Buyer seeking niche custom US-based fabrication and precision manufacturing - with EBITDA > $1.5M. 

If you’re interested in learning more about these opportunities, all you have to do is reply to this email!

Do you know someone who owns a business that matches any of the above criteria?

Use your unique referral link refer them to The Wise Exit: https://newsletter.exitwise.com/subscribe?ref=PLACEHOLDER

Jeff Chapin was involved in sanitation and clean water projects in Africa and Southeast Asia when he met someone who he would later co-found Casper with.

Casper, the innovative mattress company, was founded in 2014 and went on to make $100 million in sales by the next year. 

They built the company for 7 years before selling to Durational Capital Management for $308 million. Chapin’s newest venture is Haven Energy, whose mission is to help in the transition to a cleaner electric grid.

Here are 3 important M&A lessons we took from Chapin’s success.

M&A Lesson 1: Invest in your personal life

When Chapin was asked what ONE piece of advice he had for entrepreneurs, he said it wasn't actually about business itself. He spent the first 20 years of his career so absorbed in what he was working on, to some degree he neglected other parts of his life. 

"Your work is one part of who you are and you have to develop the other parts." Rather than feeling like you have to always be a part of the hustle culture, think about how your work fits into the greater goals you’re trying to achieve in your life.   

M&A Lesson 2: Be aware of cultural trends

Noticing the wellness trend that was emerging in the 2010s alerted Chapin to a market gap that his mattresses could fill. Americans were starting to talk about a napping culture and the importance of getting enough sleep.

They pitched their mattresses directly to this trend. And it hit the mark: they made $1 million in sales in the first month of business. 

Monitoring and adapting to cultural trends can pay off by appealing to both customers and potential buyers.

M&A Lesson 3: Planning for a management change

When the founders at Casper knew they were going to be acquired, they began planning for a management change. They brought in a replacement for their CEO and the rest of the founders decided to leave, as well.

This was planned before the exit, giving Chapin a chance to take some much-needed time off, renovate a 110-year old house and listen to podcasts for a year while researching his next project.

Whatever decisions you make about your succession plan, ensure that what's important to you is factored into the plan.

Cashing Out: Buying SPORT Magazine & The Indelible Treasures Found Within

Wayne Parrish is an award-winning reporter, editor and digital media leader with a passion for sports and journalism. He recently worked with FTI Consulting Inc. on digital transformation and merger-acquisition media projects in the U.S., Puerto Rico and Australia. 

In this episode, Wayne talks about:

• His early beginnings as a student journalist at the University of British Columbia

• Becoming the CEO of Canada Basketball and his relationship with Jerry Colangelo

• A history lesson of SPORT Magazine, Sports Illustrated, Sports Insider, and ESPN The Magazine

• How he purchased the most significant collection of images related to 20th century sport anywhere in the world

• Finding the next owner for The Sport Collection

M&A News 📰

• Software: Adobe acquires Rephrase.ai, a Bengaluru-based AI video creation platform. It’s a first by Adobe in the Indian startup ecosystem.

• Food and Condiments: Kim Kardashian’s firm, Skky Partners, acquires a minority stake in the truffle-infused hot sauce and condiment brand, Truff. This marks Skky's first capital investment.

• Blockchain: Crypto data aggregator, CoinGecko, has acquired NFT data infrastructure and intelligence company, Zash. CoinGecko aims to become a one-stop comprehensive source of crypto-currency data.

• Home Improvement: The Home Depot agrees to acquire International Designs Group from private equity firm, Mill Point Capital. This is part of Home Depot's goal to enhance capabilities for its professional customers. 

That’s all for now. 

Tune in next Wednesday for another set of M&A lessons, and have a great rest of the week. 👋