Optimizing the Heavy Truck M&A Experience: Defining Your Deal Analysis Process, Part I

The current mergers and acquisitions (M&A) market for the heavy truck industry is quite active. Furthermore, this industry is particularly ripe for consolidation, especially in relation to the many small dealers who have neither developed nor put a succession plan into motion.

While many medium and large heavy truck dealers are faced with the opportunity to expand and build upon their business in the current transaction-heavy environment, fewer have the experience necessary to seamlessly carry an M&A transaction through closing and integration phases. Moreover, even a smaller few have defined a process for analyzing potential deals. Investing dealers with a well-defined process have a huge advantage and may quickly qualify opportunities to either pursue or kick to the curb.

Break It Down

This article is the first among a series of three which will present key components of a suggested system to properly analyze and qualify M&A opportunities for heavy truck dealers. For the sake of simplifying an otherwise complex concept, one might segment the M&A transaction process into several phases. While there may be certain activities that span multiple phases and others that fall within an individual phase, breaking the process down in this manner may assist a seller or a buyer in adequately preparing for what lies ahead. The three proposed phases include:

  1. Preliminary Investigation
  2. Legal, Tax and Financial Due Diligence (some due diligence spans all phases)
  3. Arranging Financing

For the purpose of introduction, let’s take a closer look at phase one.

Ben Redman, Partner | DHG Transaction Advisory
David Wilkinson, Manager | DHG Dealerships