Matt Ebert on Selling Control to Private Equity and Expanding Crash Champions to 645 Locations | Built to Sell Radio

October 4, 2024 |  

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Matt Ebert’s path to founding Crash Champions didn’t start with a grand plan—it began with a car wreck. At 16, he found himself needing to fix his own car, sparking an unexpected passion that led to building one of the largest collision repair companies in the United States.

In this week’s episode of Built to Sell Radio, you discover how to:

  • Sell a majority interest in your business and leverage private equity for growth.
  • Build a company through strategic acquisitions.
  • Weigh the pros and cons of growing versus cashing out.
  • Understand the risks of staying stagnant in a consolidating industry.

You’ll hear the story of how Ebert sold a majority interest in his business, and how he now approaches buying companies to expand Crash Champions into a national brand with 645 locations and $2.8 billion in revenue.

Show Notes & Links

Official Press Release
Crash Champions

Connect with Matt on LinkedIn

 

Definitions

 

Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted to reflect the profitability of your business in a buyer’s hands. Typical adjustments that may drive up reported EBITDA would be things like executive compensation (assuming you’re paying yourself more than it would cost to replace you with a general manager), personal travel, automobile expenses, one-time extraordinary expenses (such as a lawsuit), etc.

Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.

Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.

Mezzanine Debt: Mezzanine debt is a kind of borrowing that sits in between regular debt (like a typical bank loan) and ownership stake (like owning shares in a company). It’s not the first debt to get paid back if a company runs into trouble, but it’s ahead of stockholders. So, it’s sort of in the “middle” — hence the term “mezzanine,” which often refers to a middle floor between the ground and main floor in a building.

Why would anyone go for this middle-of-the-road option? Well, mezzanine debt usually comes with some sweeteners, often in the form of “warrants.” These are like bonus tickets that give you the option to buy shares in the company later on. So, besides getting your loan repaid with interest, you might get a piece of the company’s future growth.

Companies often use this type of debt when they want to buy another company or when they want to change who owns the company, such as in a buyout. It can make the deal more attractive for the new owners and help it happen more smoothly. If things go south and the company can’t pay its bills, mezzanine debt gives the new owners a better spot in line to get their money back compared to some other stakeholders, but they’re still behind regular bank loans and other more senior forms of debt.

In short, mezzanine debt is a more flexible and potentially rewarding form of borrowing that’s often used in big business moves like acquisitions and buyouts.

 

About Our Guest

Matt Ebert

Matt Ebert is the visionary driving force behind Crash Champions, a prominent player in the automotive collision repair sector. As the
founder and CEO, Ebert’s entrepreneurial drive propelled a local New Lenox, IL repair center, to become the third-largest multi-shop
operator (MSO) in the U.S. Under his leadership, Crash Champions has expanded to over 600 locations across 37 states, garnering
recognition from industry experts and investors. Ebert’s commitment to infusing a vibrant culture of empowerment and progress positions Crash Champions as the preferred employer in the field.

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