Helping Contractors Navigate the M&A Landscape - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of a live interview with Dominik Sachsenheimer and Carson Bombara of Maven Group. You can read the interview below or listen to the podcast.

Intro: Welcome to Roofing Road Trips, the podcast that takes you on a thrilling journey across the world of roofing. From fascinating interviews with roofing experts to on-the-road adventures, we'll uncover the stories, innovations and challenges that shape the rooftops over our heads. So fasten your seatbelts and join us as we embark on this exciting roofing road trip.

Karen Edwards: Hello and welcome to another episode of Roofing Road Trips from RoofersCoffeeShop. My name's Karen Edwards, and I'm really looking forward to today's conversation because I think this is perhaps one of the hottest topics in the roofing industry right now and that's mergers and acquisitions. I'd say it's maybe only being challenged by artificial intelligence, but those are the two buzzwords that we've got going on and I am welcoming to today's episode, Dominik and Carson from the Maven Group and they've got a lot of background in this territory, so I'm thrilled to have this conversation with them. Dominik, welcome. Carson, welcome. Why don't you guys introduce yourselves and tell us what you do there at Maven? Dominik, let's have you go first.

Dominik Sachsenheimer: Sure, Karen. Well, first of all, thanks a lot for having us. Really excited to be on the podcast. It's an honor to share this time with you. Yeah. Quick intro. My name is Dominik Sachsenheimer. As the last name and the accent probably suggests, I originally grew up in Germany, but have been in the States now for well over 20 years and started Maven Group about seven, eight years ago. I guess we'll get into that in a little bit more detail. But yeah, headquartered in Jupiter, Florida and I'm very happy to have Carson on our team who joined us about a year and a half ago.

Karen Edwards: Excellent. Carson, please introduce yourself.

Carson Bombara: Thanks, Karen. I'm super happy to be here. Like Dominik said, I joined Maven Group at the start of 2023. Before then, I was working in various finance roles at a private equity backed company that was helping to buy contractors and assemble a larger company. Met Dominik and the Maven team through my previous experience, and been really enjoying helping roofing contractors and sort of getting better familiar and learning more about the industry. Super excited to be here.

Karen Edwards: Excellent. Well, we're excited to have this conversation. Let's start, Dominik, just tell us, you mentioned you've been in this business for a long time. Maven Group came about seven or eight years ago, so give us a little bit of background and history and why you decided to start your own.

Dominik Sachsenheimer: Sure, sure, absolutely. Yeah, so I had a longer career in corporate finance, both in Europe and then here in the States, mostly in the United States with Otis Elevators and during this career, kind of rose through the ranks and worked at Otis's North American headquarters and did all mergers and acquisitions for Otis in North America. So whenever Otis bought a small elevator company, I would be the guy running the whole process.

And as I was doing this, I realized that many of the independent contractors that were bought by Otis were just extremely unprepared for the transaction. So the deals used to be very difficult for both sides actually, the sellers, the independent guys and consequently also for Otis. So we started Maven Group really with the goal to help those independent sellers who start a company, run it 10 years, 20 years, 30 years and all of a sudden it comes time to sell and you build a super successful business, but you're not quite sure how to go about really selling it. What's required? What do I have to do? Who do I have to hire? Who are the buyers? What is it worth? What happens to my employees? All these things.

So we helped a ton of elevator companies over the last six, seven years and then decided fairly recently because as you mentioned, the roofing industry is such a hot industry. We decided to also venture out into roofing because the seller profile is very similar. Usually a person who starts a business in his hometown, runs it very successfully, maybe has some relatives in the business doing the books or the warehouse and whatnot.

So the seller profile is very similar. And also in the buyer universe, a lot of companies who buy roofing companies right now have been working with us already in the elevator space. So it seemed to be a very natural transition, and so far it seems to prove out, the concept seems to prove out. We work with quite a few roofing companies right now and really help them prepare for selling the company, whether that is two weeks from now, two years from now. But that's, in a nutshell, what we do and look forward to going into more detail.

Karen Edwards: Excellent. And Carson, you mentioned briefly how you found your way there in 2023 because you were on the other side, you were involved with the private equity that was making purchases.

Carson Bombara: That's right, Karen. Before I joined Maven, I was the person buying or at least helping to buy some great contractors out there also on the elevator side. But really just like Dominik said, found an appreciation for the fact that a lot of the sellers, a lot of the entrepreneurs just weren't really ready to take the company to market to find the best partner. So the reason I really enjoy working for Maven and why I wanted to join the Maven team is because I really get a great sense of value and really enjoy helping some of these entrepreneurs sell their companies and find great partners to help their company grow thereafter.

So it's just really been a true pleasure to get to partner with some of these amazing individuals and help them really take their company to the next level, and find great partners on the private equity side who share that vision.

Karen Edwards: Okay.

Dominik Sachsenheimer: And I think, Karen, if you allow me to add there, so both Carson and I really were buyers for many years. So we asked all the tough questions. We tried to shoot holes in people's stories, so to speak, so we know exactly what they think like and how they evaluate companies. And any transaction is obviously a partnership, but it's helpful to know how the other side thinks. It's not necessarily an adversary situation, but it's helpful to know what the other side thinks like what the issues could be. So we feel we are really uniquely positioned to help sellers because we already anticipate all the questions and all the potential issues that might pop up later on. And again, I think our success in the elevator industry speaks volumes to that point because we can... as we prepare sellers to get ready, the transaction just becomes so much easier for everyone.

Karen Edwards: Yeah, yeah. And I'm still trying to wrap my head around the similarities between elevators and roofs. And is it that in the elevator industry, are these contractors that are doing service, repair and maintenance?

Dominik Sachsenheimer: Yes, correct, yeah.

Karen Edwards: So very similar to a roofing contractor who's doing installation service, repair and maintenance.

Dominik Sachsenheimer: Correct. So most of our clients in the elevator trade do a little bit of construction, not much, but a lot of service and repairs. And then also I guess what you would call re-roofing. If an elevator is just old, if it's 20 years old, you need to update the key components. So very similar to roofing companies, and then again, similar owner profile, usually someone who had the guts to go out and to try it on his own or on her own.

And usually people who are, as Carson said, very entrepreneurial, great personalities with natural salespeople without really having a big sales program, very savvy technically. But when it comes to selling the company, they usually reach a point where they say, "Hey, as great as I am at building a company and developing my team, that's really something I'm not familiar with." So that's when we can help, when we can't necessarily build a huge successful roofing company or a huge successful elevator company, but when it comes to selling it and when it comes to reaching out to the buyer pool and really preparing everything that needs to prepared then we're the right people to call.

Karen Edwards: Okay. So when you say you're helping a contractor prepare their business for sale, I have a couple of questions. What kinds of things are you looking at? What are you helping them do?

Dominik Sachsenheimer: So most importantly, a lot of things that the contractor does are second nature to him, but an outsider usually asks for a more generic view in terms of what percentage of your revenue comes really from commercial companies, customers? What percentage of your revenue comes from residential? How do you go about your sales activities? Do you just have an ad in the newspaper? Is it all online? Do you have people knocking on doors? All of those things. Which of the vendors do you use? Whether do you have an exclusive agreement, or do you use different ones? What's your labor situation? Do you have W-2 employees, or is it all 1099s? Or maybe it's different in the office compared to the field. All of those things.

And within your financials, where there might be a lot of hidden things that when you look at the financials for three seconds, you might not catch. So we do try to dig through those and kind of try to streamline them, if you will, because you could, let's say, buy a lot of material in one year, but not bill for it until the next year or vice versa. So your profit and loss statement could be really misleading, and so on and so forth.

So we kind of really work with our clients, could be two months or so to really figure all that out so that we ask the questions first and we prepare the answers in a way that buyers can easily understand. And also, it's important that the statements that we make are true. Very often I've seen deals where a seller answers questions not incorrectly, but just because they're maybe not used to the terminology, to the lingo and all of that, there can be all kinds of misunderstandings. So it's important for us to go through all of that upfront to make sure that the buyers actually know what they're buying.

Karen Edwards: Okay. So I keep thinking all these different scenarios, or in my head, you're prettying it up, you're getting a playbook. Here we are. It's like my resume, it's all polished and ready for a potential employer. You're doing that with a business, getting it all buttoned up, ducks in a row, speaking the same language as these buyers. And I'd like to also ask, it's happening every day and I think when it first started coming out, people were a little like, "Oh, geez, what's happening? These guys are taking over, and this is bad for roofing," but not necessarily so, because we look at this as a partnership maybe and a relationship and especially for that person that, one, is ready to retire.

Dominik Sachsenheimer: Yeah, yeah. Well, I think that's a very important comment to make. There is no one size fits all deal. Even from a seller's perspective, there can be very different scenarios that are desired. You could be 72 years old, you just want hand over the keys and you never want to talk about roofing ever again. And that's fine if that's where you are in life. Or you're 38, you build a great company, you want to go to the next big city, but you just kind of need maybe someone with a little bit more cash in his back pocket or someone who knows how to do that. And then you want to be involved for the next 20 years. So that can be a very fruitful partnership.

And there's obviously all kinds of shades of gray in between. So that's usually the first thing that we do. We sit down with our clients and try to figure out, what do you really want? But what's your goal? And depending on what that goal is, we then hopefully find the right buyers because it's the same thing within the buyer universe, but some buyers only want to do companies that do insurance work. Others will tell us, "No, we don't want to buy anyone who does insurance work." So because we know the buyer universe and we hopefully understand what our clients really want, we can bring them together.

Karen Edwards: Matchmaking.

Carson Bombara: Just to add to that if I can, I mean, I think whenever I hear about private equity or things that might not go exactly to plan, I think oftentimes that friction comes from or that conflict comes from a seller and a buyer that whose intentions were really never aligned, who didn't really think about the business the same way. Maybe the buyer wanted to grow much faster and take certain steps to get there that maybe the seller isn't as inclined to do.

So I think it's really important when we think about, is private equity equity sort of like a good development or a bad development? I think it really depends. And again, it just comes back to options. It's nice to have the option that, as Dominik was mentioning, if you've run a great company and some people don't have the luxury of the next generation to step in and take over the next line of leadership, that there are partners out there ready and willing to pick up where you left off and obviously sort of give you a nice monetary return as well that can really help you enjoy that retirement quite a lot more.

So yeah, I think it's a little bit always tough to paint with a large brush here and just call it good or bad. I think at the end of the day, it's really just a positive development in the sense that it gives people more options.

Karen Edwards: Definitely. Definitely. So I want to talk about who you work with in the roofing industry. Is it just contractors? Who are you looking for?

Dominik Sachsenheimer: Yeah. Yes. So in terms of our clients, that's all contractors. We really go out of our way to work exclusively for sellers because there's all kinds of other people running around suggesting all kinds of deals. But not to go into too much detail, but we usually do not get paid until we close the deal. So our incentives are completely aligned with the sellers and their success, similar to maybe a real estate broker. So if you don't sell the house, we don't get any money.

So we are really in the seller's corner. We think with the seller every step down the path, and it's not just preparing them, it's after that step, we find the right buyer. We actually host meetings between our client and different buyers. The buyers will know that there's an open bid, so to speak. So the buyers know that they have to put their best foot forward.

And then if our client selects private equity company ABC as their partner, there's still a month or two of diligence that we have to go through and we will stay in our client's corner until everything's finished, help them get through all the legal reviews, help them go through the purchase agreement and all of that. Because as I said, we are really, yeah, we are in the seller's corner from the first second on.

So in terms of our clients, that's who it is, whether it's contractors. And then in terms of size, it varies. We are speaking with some clients right now that have maybe 4 or $5 million in annual revenue and then there's really no limit upwards. We are talking to some that are 20, 30, $40 million in revenue. So that doesn't really matter. I mean, of course it does matter, but we are really working with sellers of all different sizes.

Karen Edwards: I know that sometimes a contractor gets a call kind of out of the blue inquiring, what's your advice for when...? Because that call will come, it's just a matter of when, not if and what is one of the first things that they ought to do when they do get their first inquiry?

Dominik Sachsenheimer: No, I think, yes, people get calls, people get emails, with your logo already posted into a fancy presentation, all of that.

Karen Edwards: Look at you.

Dominik Sachsenheimer: No, exactly. No, I think it's very important to just give us a call or send us an email or contact us so we can kind of have those discussions, is it time for you to sell? And very often, I mean, not to go back to the elevator industry, but Carson and I are knee-deep into a deal right now in the elevator industry with a couple that I've been working with for seven years.

So that also happens when we talk to people and we try to figure out what are your real goals? And then we give them an honest feedback and say, "You know what? If you want this much money, we can help you right now because your company's just not quite there yet." And then we can give people advice on what to maybe change in their business. And then we check in every six months, and whenever the time's ready, we can bring them to market.

So I think when that email comes or when that call comes, just give us a shout and we can discuss if this is the right time for you, for your company, for your goals. And if it is, then we can kind of think about, okay, who are the right buyers? How do we present the company? As I said before, what do you want to do? Do you want to stick around or do you want to move on after a year maybe? And so on and so forth.

Karen Edwards: Wow. Yeah. I like the analogy that you used of a real estate broker. There are people out there that will sell their own, for sale by owner people, but it's not something that you're familiar with. It's not something that you do. You may miss some things. You may make some poor choices. And so that's kind of what your role is to really guide through that process, right?

Dominik Sachsenheimer: 100%. And very often it's the largest transaction that people do in their life because you buy a home, or maybe you're fortunate enough in your life to buy maybe more than one home, but selling your own company is something that you really don't do every day. Most people only do that once a year. And many of our customers are of course interested in how much money they can make in a transaction, but many are interested in their legacy and how they will be remembered and all of that. So yeah, you don't want to just wing that. You don't want to wing it. You want to bring some experts in who can really help you.

Carson Bombara: Yeah, absolutely. And I would say too, I mean, it is a really complex process. It's much more complex than selling your home. And it's really, it's not a level playing field too, I think is something important to keep in mind. The private equity firms or corporate development firms that are sort of representing the buyer, that's really all they do day in and day out is they look to acquire companies, get from submitting an offer all the way to closing on a purchase agreement. There's a lot of steps involved in that, and there's a lot of benefit of experience throughout that process.

So most of our clients, it's the first time and maybe the only time they'll ever sell a company. I really don't think it's in anyone's best interest to be sort of learning as they go for that one sale. It's much better to have people involved on your side, fully aligned, as Dominik said, where the incentives are perfectly aligned, working in your best interest rather than relying on advice and consultation from people that are, with some respect, sitting on the other side of the aisle from you, who they themselves have tremendous experience in most cases doing this. And it will not be their first time, nor will it be their last time, but it very well could be for the seller. So it's good to have an expert in your corner.

Karen Edwards: It is. Yeah. And I think it's great that you are out there, you're doing this, that you offer this service, that you've been through it many times in the other industries and then you're bringing that to roofing to help. It sure is something that we always say, well, don't go put that roof on yourself. You're going to hire the professional who knows what they're doing.

Dominik Sachsenheimer: Exactly right.

Karen Edwards: And same situation. Don't sell that business all by yourself. Hire that professional.

Dominik Sachsenheimer: That's exactly right.

Karen Edwards: [inaudible 00:20:07]. Okay, so we talked about the process, could be months, could be years. So maybe somebody is approaching, they're just starting to think about, "What am I going to be doing in five years? I want to retire. I want to spend time with my grandkids." When should they call you?

Dominik Sachsenheimer: They can literally call us anytime. We have been known within the elevator industry, and we are doing the same thing at roofing for providing free advice, free of charge in hopes that we will then get the business later on.

Karen Edwards: Sure.

Dominik Sachsenheimer: But again, nobody wants to, as Carson said, nobody wants to go through a process that ultimately fails. And yeah, we're more than happy to work with someone for a year, two years by just doing a consultation maybe once a quarter, every six months and kind of really help them along the way until the right time comes. So there's really no wrong time. I mean, quite frankly, we get calls every once in a while from people who just started the business and say, "Hey, I want to run this for 15 years. I want to make whatever, $20 million in 15 years. What do I have to do?"

And as you can imagine, the answer is maybe a little bit more complex than a 30-second conversation, but we're more than happy to have that conversation with people. And then very often, people learn something about their own business that they hadn't learned before. Goes both ways. Maybe sometimes they're disappointed because they thought the company was worth a ton and it might be not, or vice versa. People thought, "Ah, I just run this company in a mid-sized town. I don't think it's worth much." And when we share what kind of development we see in the market, they're very surprised. So it's never a bad time to call us and really to get educated.

Karen Edwards: Excellent. So yeah, there's no reason not to call.

Dominik Sachsenheimer: Correct.

Karen Edwards: It's free. You'll consult, you'll help them get where they need to be and then when the sale happens, then that's when you guys represent and that's how you get paid. So I love it. I want to thank you both for being here today, Dominik, Carson. This was a really interesting and educational conversation. I'm hoping that those listening out there have learned something and are going to pick up the phone and contact you. So how can they find you?

Dominik Sachsenheimer: Yeah. So they can find us really through our website, which is mavenequity.com, one word, mavenequity.com. Our contact information is there. Our prior transactions are listed there. There's a little bit of a summary of what we do. But yeah, mavenequity.com is the place to go.

Karen Edwards: Okay. And if you were driving and couldn't write that down, you can always go to rooferscoffeeshop.com and you can find Maven with a full directory on our site and they'll have their contact information there too. Well, gentlemen, thank you so much for being here. This was great. I thank you for sharing your expertise and your advice, and hopefully we'll be helping some people today.

Dominik Sachsenheimer: Hopefully, Karen. Thanks again for making time. Really appreciate it.

Carson Bombara: Thank you, Karen.

Karen Edwards: Sure. And thank you everyone out there for listening. As always, we want you to subscribe so that you don't miss an episode. Please follow us on social media, and listen to our podcasts on whatever platform you prefer, wherever you get your podcasts, we're going to be out there. So we will see you on a future episode of Roofing Road Trips. Thanks everyone. Bye-bye.

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