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Episode Summary
You’re running four businesses with eight partners, the family is in litigation, and the chaos is bleeding into the operation faster than you can patch it. The distribution company sells what your three manufacturers make, and you don’t own the largest one. Your CPA is rolling up financials, not telling you what they mean. You need a way to make everyone whole and keep the team you’re responsible for from cratering. That’s where Mark was when he picked up the phone to call Bobby Kingsbury at MCM Capital, and the reason that call worked is they had been getting to know each other on the golf course for two years before any of this hit. In Part 2 of the series, I got Bobby and Mark together to walk through how the transaction actually went down: the quality-of-earnings work to untangle four sets of books and inter-company sales, the preferred-and-common structure that let Mark roll 30% back in and keep real upside, the landlord who almost submarined the deal a month before close, and the board they built post-close to give Mark someone to bounce strategy off of for the first time in his career.
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## Top 10 Takeaways- The relationship that closes the deal usually starts two years before the deal exists.
- When you go searching for a buyer in the middle of a fire, every option looks like rescue. Build the relationship first.
- Your CPA rolling up financials is not the same as a quality-of-earnings analysis.
- Inter-company sales between your entities distort EBITDA. A real Q of E pulls them out.
- Four businesses bought separately are worth less than four businesses sold as one integrated platform.
- Private equity backs the owner-operator first and the financials second. Who you are matters.
- Rolling equity at close keeps your upside alive. Take some chips off. Leave most on the table.
- Preferred plus common lets you keep real ownership for a small check, with downside protection on the preferred.
- A real board gives you what you’ve never had: someone outside the business who will challenge you.
- The lease assignability clause in your real estate contract can hold up your entire transaction. Read it now.
Sound Bites
“Without Mark, to be fair, that business is worth half as much as it is. Which goes back to how important people are to a specific business.” (@00:35:13) — Bobby Kingsbury
“I’ve bet on myself my whole life, and it was something that I wanted to do moving forward.” (@00:25:55) — Mark
“I’ve never dealt with a human being, I don’t know if I can call him a human being, I’ve never dealt with a person like that in my entire life.” (@00:28:26) — Bobby Kingsbury
“At the end of the day, it is going to be a marriage at the very least. If it’s not according to plan, it’s more of a shotgun marriage.” (@01:03:01) — Bobby Kingsbury
“It definitely made me a better leader.” (@00:58:29) — Mark
About This Episode
Part 2 of a two-part series on valuation from the seller’s perspective. Bobby Kingsbury is a managing director at MCM Capital, a lower-middle-market private equity firm. His guest co-host is Mark, the owner-operator who sold four businesses to MCM and rolled significant equity into the combined entity (Torsion Group Corp). Mark and Bobby met on a golf course two years before the transaction, which is the throughline of the episode: the deal worked because the relationship was already there when the family situation forced Mark to act. Real numbers, real timeline, and a candid walk-through of the structure they used to keep everyone whole.
Resources Mentioned
- MCM Capital — Bobby’s firm. — mcmcapital.com
- Torsion Group Corp (TGC) — The combined entity Mark runs post-transaction.
- SAP Business One — The ERP platform mentioned across the four businesses pre-transaction.
- Traction (EOS) — The operating system the executive team implemented post-close.
- Bobby Kingsbury contact — 216-514-1843 / Bobby@mcmcapital.com
- Mark contact — 330-612-7947 / mcc@tgc-ind.com
Connections
Phase + Module:
- Module 1 — Ownership Goals — Exit driven by partner misalignment, not by personal goals
- Module 4 — Sustainable Financials — Quality of earnings to untangle inter-company sales
Milestones:
- Milestone 5 — Market Value — What four businesses are worth combined vs. sold separately
- Milestone 6 — Transaction Value — Preferred-and-common structure, rollover equity, real deal mechanics
Concepts referenced:
- Normalized EBITDA — Inter-company eliminations and family add-backs
- Enterprise Value vs. Equity Value — Why combining four entities expanded the value
- The Owner-Operator Trap™ — Mark was the lynchpin across all four businesses
Related episodes:
- Ep. 89 — Valuing a Business - The Buyer’s Perspective with Bobby Kingsbury — Part 1 of the series, from the buyer’s side