Ep. 344 — John Waller: The M&A Conversations Reshaping Your Biggest Customers and Vendors

5 min read

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Episode Summary

Your biggest customer is part of a $40 billion conglomerate, and somewhere in a conference room you’ll never see, an executive is deciding whether your contact’s division is core or about to be sold off. You won’t get a memo. You’ll feel it in the next renegotiation, the next spec change, the next buyer who shows up at your door. I brought John Waller from Prairie Capital Advisors on to pull back the curtain on the corporate divestiture world. After nearly 30 years on sell-side M&A under $100M, John has been in the rooms where these decisions get made. We got into why corporations that act as active capital allocators outperform the ones that sit still, what actually drives a divestiture (capital allocation, debt pressure, non-core focus, sometimes liability cleanup), how the buyer can be a financial firm, a strategic, or you, and why every deal lives in the gap between intrinsic value and what the right buyer will actually pay. Real example: a $40B Japanese parent sold a small unit and told John the price didn’t matter, only that future liabilities disappeared. That’s the context that changes how you read your own vendor and customer base.

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## Top 10 Takeaways
  1. View your business as a portfolio of assets, moving capital toward higher returns and away from the lower ones.
  2. Companies that constantly tune their portfolio outperform the ones that make one big move every decade.
  3. Divestitures happen for many reasons (non-core focus, debt pressure, liability cleanup), and price is not always the goal.
  4. Your biggest customer’s internal M&A reshapes your relationship long before you ever see the memo.
  5. A divested division can be your best inorganic growth lever if you have the time and will to fix it.
  6. Two buyer types sit across the table: financial buyers chasing return, strategics chasing operating fit. Know which one you’re talking to.
  7. Private equity today is operators, not financial engineers. The headcount-cutting playbook stopped working decades ago.
  8. People run companies, not org charts. Comp plans and personal bonuses drive deal behavior more than press releases admit.
  9. Every deal is nuanced. The spreadsheet starts the conversation. The seller’s real intent finishes it.
  10. The market sets the value, but only when you give the market what it needs to bid hard.

Sound Bites

“I encourage executives to look at their business as kind of like almost a mutual fund. They’re moving assets in and moving assets out based on what has a better or a higher expected rate of return.” (@TBD) — John Waller

“The companies that do have those discussions and are frequently, as I say, tuning, fine-tuning their portfolio of assets, those companies outperform other businesses.” (@TBD) — John Waller

“John, the value doesn’t matter. The only thing that matters here is that we get this deal done, and we have no liabilities going forward.” (@TBD) — John Waller

“Everybody that’s involved in this is trying to grow their business and create more cashflow and equity growth. Like, that’s it.” (@TBD) — Ryan Tansom

About This Episode

John Waller is a Managing Director at Prairie Capital Advisors with close to 30 years of sell-side M&A experience, focused on transactions valued at $100M and below. He started his post-graduate career in 1995 through a State Department program in Southwestern Poland, just after the fall of communism, before learning the M&A craft at what is now Lincoln International. At Prairie, John specializes in corporate divestitures, the corner of the M&A world where bigger corporations sell off divisions, product lines, or business units. This episode digs into why these deals happen and why middle market owner-operators should pay closer attention to the M&A activity happening at their biggest customers and vendors.

Resources Mentioned

  • Prairie Capital Advisors — John’s firm. — prairiecap.com
  • Bain & Company portfolio research — Referenced for the data showing companies that actively buy and divest businesses outperform on stock performance.
  • Lincoln International — Where John learned the sell-side M&A craft earlier in his career.
  • Intentional Growth Boot Camp — Ryan’s two-day program on viewing and running the company as a financial asset. — arkona.io

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