Lessons Learned From Acquiring 20 Companies

Over the past five years my firm, Ty J. Young Wealth Management has acquired more than twenty companies as part of a massive growth strategy.

The businesses that we have acquired have resulted in unprecedented success for both the company and our clients. We now manage over $1B in assets for over 7,000 clients nationwide.

Success has not come easily– both as an entrepreneur and later venturing into M&A as a growth strategy. When I started the firm 24 years ago, I had no idea we would have the opportunity and privilege to acquire so many other businesses that allowed us to expand our reach. As we’ve grown through significant acquisitions, I’ve learned a number of lessons along the way about the deal making process and what every CEO or founder should know about testing the M&A waters.

Price Is Important, but High Quality Is Even More Meaningful

It can be tempting to purchase a company just because it has an affordable valuation and it’s available. However, a company’s intrinsic value that it provides to the market is so much more important than its price. A valuable company has developed strong, strategic relationships with its clients. It has structure and a team of dedicated employees ready to carry out its operations.

When we find a company that we can potentially acquire, we give it a grade. Our grading system ranges from A to F and is used to evaluate the merits of the business and determine how well it would integrate with our firm. Only companies that are graded as As and Bs based on our unique criteria will qualify.

The Best Deals Are Typically Made, Not Found

Our team looks to develop strong relationships with companies that are seeking to sell their businesses. Frequently, an owner has spent years developing their company. They know their strategy inside and out, and they have strong relationships with their customers. They may not even be interested in an exit at the current juncture. But developing that relationship is critical and you need to have the long-term vision to do that before a company is on the block for sale.

Some of the best deals we have acquired were not necessarily looking to actively sell. The deals were borne out of a relationship we cultivated with the business. This laid a foundation for us to have a conversation about an exit that they likely wouldn’t have entertained if we made an offer to buy with no relationship.

Successful Integration Comes with Solid Client Relationships

The transition and integration period following an acquisition is critical and tells a lot about the long-term viability of the deal. During the acquisition process, I seek out companies that already have a solid relationship with their clients. I don’t want a company that has a revolving door of clients. By the same token, the value that we add as the buyer is paramount to maintaining and growing that trust that the customer has placed in the business.

We don’t seek to jump in and reinvent the wheel when acquiring a company. If I’m interested in buying the company, I know it’s already performing well. I’m not there to reinvent it — But I do want to add value, and the heart of that is the customer relationship. My desire is to build a strong relationship with the owner so that they know their company will be in good hands.

About Ty J. Young, CEO of Ty J. Young Wealth Management. Mr. Young has been featured in Forbes, Fox News, CNBC, Yahoo Finance and more.


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