Episode Summary

Adam Coffey, who built three national companies across 58 acquisitions for nine private equity firms, explains how title agency owners can engineer multiple exits using PE arbitrage. He breaks down the $6 trillion private equity pyramid, reveals why small companies sell for 5x while larger ones command 14x, demonstrates rollover equity math that turned one seller’s $4.4M into $17.6M in 27 months, and identifies the fatal mistakes that kill 80% of business sales. Coffey shares valuation fundamentals, quality of earnings essentials, and why clean financials determine whether your agency is sellable.

About Adam Coffey

Adam Coffey is M&A Advisor & Former Serial CEO at Independent Consultant (Former GE, 9 PE Firms). Featured on Episode 67 of the Title Agents Podcast with Mo Choumil, CEO of Alltech National Title.

Key Takeaways

• In a world where change is the only constant, Mo Shamil stands at the forefront, guiding title professionals to not just grow their businesses, but to master the art of innovation.
• With every episode, you’re handed the keys to unlock unparalleled growth and stay ahead of the curve.
• Hello, everyone, and welcome to another episode of TitleAge’s podcast.
• I’m your host, Mo Shamil, CEO of Altec National Title.
• I am very honored to have my advisor, M&A advisor, Adam Coffey.
• We’ve shared tons of wisdom and knowledge for the past few months, and I thought it would only be fair to share this knowledge with you as a title professional.
• Give us a little background about your life, your history, from the Army to GE to M&A role.

Episode Chapters

Time	Topic
00:00	Segment 1
05:00	Segment 2
10:00	Segment 3
15:00	Segment 4
20:00	Segment 5
25:00	Segment 6
30:00	Segment 7
35:00	Segment 8

Full Transcript

In a world where change is the only constant, Mo Shamil stands at the forefront, guiding title professionals to not just grow their businesses, but to master the art of innovation. With every episode, you’re handed the keys to unlock unparalleled growth and stay ahead of the curve. Get ready for a transformative journey. Hello, everyone, and welcome to another episode of TitleAge’s podcast. I’m your host, Mo Shamil, CEO of Altec National Title. I am very honored to have my advisor, M&A advisor, Adam Coffey. We’ve shared tons of wisdom and knowledge for the past few months, and I thought it would only be fair to share this knowledge with you as a title professional. Welcome, Adam. Hey, Mo, how are you? It’s good to see you. Hello to all your listeners out there. It’s 730 in the morning. It’s a beautiful day here in Dallas, Texas. Let’s do this. All right. Let’s start off. Give us a little background about your life, your history, from the Army to GE to M&A role. Sure. Yeah. Mo, I think for all of us, life is a set of experiences, and they’re all additive. Things that we’ve done through our careers, they help us arrive at the destination where we’re at today. When I meet people for the first time, I generally talk about a few things. Early in my life, I was a soldier in the United States Army. Military taught me something about discipline, teamwork, and leadership. Really good foundational skills later in my career as I became a CEO. From there, I became an engineer. Engineering made me a meticulous planner. Also very helpful for a business guy to be very strategic in thinking and methodical in planning. Good skill set. I then went to work for Jack Welch at GE. I spent 10 years at GE in a time I call the Camelot era. Tech didn’t exist. GE was number one on the Fortune 500 list. Jack was the world’s most admired CEO. That company was growing so fast, it was doubling in size every three years. The world’s largest company doubling in size every three years. That was phenomenal. We’re not talking about a tech company. We’re talking about an industrial company. It was a magical time as a young up-and-coming executive to learn how to run a business. One day, the phone rings. This is back in the days we didn’t really have cell phones and we weren’t tied. I had a pager. I had a beeper. Back in this world, this era, you answered your telephone when it actually rang. Recruiter calls me, I’m chasing money and title. I have no idea what the hell private equity is. Private equity isn’t even on my radar screen, but I am chasing money and title. There were job opportunities coming my way, opportunity to go be a CEO for the first time. Didn’t know about the private equity aspect. I just kind of dumbed into it, if you will. Moved from 10 years of GE, up-and-coming executive, and became a CEO for the first time. When I think about that, that was back at that time. PE was a growing industry, but it really wasn’t well-known at the time. I think that in 2001 is the time period we’re talking about. It’s roughly $800 billion in assets under management. Today, it’s $6 trillion. Back then, there were maybe 1,600 companies that were doing private equity. Today, there’s over 8,000, if you include all the little guys who call themselves a private equity fund. I’m sure it’s $50,000 by now, but real traditional PE firms have gone from $1,700, $1,500, to about $8,000. Assets under management, $800 billion to $6 trillion. I spent 21 years as a CEO building three national companies for nine different private equity firms. I bought 15 of those companies. Can I ask you a quick clarification question? What is a private equity for those that may not be familiar? They may not have heard a term, but it’s one more than a term. Sure, Don, good question. If you think about mutual funds as a good proxy, because we all understand mutual funds. I can go on my Schwab account. I can say I want to buy so many shares or put so much money into this specific mutual fund, and I know that there’s a fund manager, and there’s someone who’s aggregating money from a bunch of investors, and then they’re buying a basket of stocks, and they’re following some type of a flavor of prospectus that they’ve laid out. I’m gonna be investing in growth companies or in real estate or whatever the case may be. And so we have instant liquidity. These are publicly traded. We can buy them today. We can sell them tomorrow. We can hold them for 10 years. In the world of private equity, similarly, there is a private equity firm which serves as the general partner or the fund manager, if you will. They start a fund. The fund lasts for 10 years, typical, and they collect money from a bunch of investors. Minimum investment typically around $5 million for a traditional kind of PE firm and their fund. And so these are wealthy investors. They’re accredited investors. And the difference is there’s no liquidity. You’re tying your money up for 10 years, up to 10 years. And so whereas a mutual fund, I can trade in and out as I want, that’s publicly traded. These funds are investing in private companies and there’s not gonna be any liquidity for an extended period of time, which is why the minimum investments are large and why it must be accredited investors. We don’t want people who say, hey, I need my money back to, I’m getting divorced, I need my money back. Sorry, doesn’t work that way. It can work that way with a mutual fund, not with a private equity fund. So private equity firms then take that money. The largest class is called buyout funds. And so these are PE firms who wanna buy companies. And for the first five years of the fund life, they’re deploying capital, they’re buying companies and they’re improving them. And then selling them have to be kind of all wrapped up in a 10 year timeframe. And so that’s essentially what private equity is. Buyout funds is what we’re talking about today. Funds that buy companies, they buy a controlling stake. They have about five years to deploy capital. They then are working with those companies to grow them. They can do add on acquisitions at any time. And then they’re selling them. Typical hold period, about five years. So that’s private equity. So I spent 21 years as a CEO building companies for private equity. One of my adventures, I was a CEO of, we bought 34 companies, put them together, and got bigger and then sold multiple times, multiple shareholders, different PE firms that owned me at different times. Another one I did, I bought 23 companies and put them together and got bigger, sold it. And so that was kind of my world for 21 years. And I got bored. I’m about to turn 60, I’m gonna turn 60 in a few weeks. And I’m like, there’s gotta be more to life than being a CEO and building companies and making people billions. So I’ve got two and a half billion dollars in exits as a CEO selling private equity, selling to private equity companies that I’ve built. And it’s been a fun ride, I’ve enjoyed it. But I started to get bored, like anything in life. I’ve been doing it too long. So I wanted a different challenge. I’m 60, I got 10 years left in my working career the way that I look at it. And I want to do something. I decided that I wanted to work with a bunch of small companies. I wanted to teach individual investors and companies how to use the same tools that I developed over a 20 plus year career and billions of dollars in exits. And I wanted to show smaller business owners how to take advantage of these same tools that private equity firms are using to generate outsized returns for their shareholders. And so that led me to hang up my CEO cleats to start a consulting business. I spent more hours working today than I ever did as a CEO, which I didn’t think was possible. But I’m having fun, I’m working with dozens of companies. You’re a client, you and I are having fun together working in the title industry. And for me, the difference has been instead of running one company and focusing o…