How to Sell Your Title Company Using Private Equity M&A | Ep 8

Episode Summary

Adam Coffey, who built three national companies for nine private equity firms and delivered $2.5 billion in exits, reveals how title agency owners can use PE acquisition strategies to multiply their wealth. He explains platform versus add-on deals, the arbitrage pyramid that creates 3x returns, why selling 70% beats selling 100%, quality of earnings pitfalls, rollover equity mechanics, and the financial fundamentals that make title companies attractive acquisition targets. Recorded August 2024, this tactical session teaches owners how to prepare for sale and maximize valuation.

About Adam Coffey

Adam Coffey is an M&A advisor and former serial CEO who spent 21 years building three national companies for nine different private equity firms, generating $2.5 billion in exits. His portfolio includes buying and integrating 57 companies across multiple industries. He is the author of three number one bestselling books on private equity and M&A strategy: The Private Equity Playbook, The Exit Strategy Playbook, and Empire Builder. Coffey writes monthly columns for Forbes.com and teaches M&A seminars globally, working with approximately 67 companies simultaneously.

Key Takeaways

• Private equity has grown from $800 billion in assets under management in 2001 to $6 trillion today across 8,000 firms, creating unprecedented acquisition opportunities for title agencies.
• Serial acquirers generate three times the shareholder value of companies that don’t pursue M&A, according to Bain Capital research.
• The arbitrage pyramid allows buyers to purchase small title companies at 5x EBITDA and sell consolidated platforms at 14x, generating $9 profit per dollar invested.
• Selling 70% of your company while rolling 30% forward typically produces better wealth outcomes than a single 100% exit, with second bites often exceeding the first payday.
• Private equity platform deals use 50% equity and 50% debt, but add-on acquisitions are funded with 100% leverage using the acquired company’s cash flow to service the debt.
• Eighty percent of business owners who want to sell cannot find a buyer because their revenue depends entirely on the owner’s personal presence, making the business unsellable.
• Clean financials reviewed by a CPA are non-negotiable; one seller’s $2.5 million reported EBITDA collapsed to $500,000 during quality of earnings diligence due to bookkeeping errors.

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