Food Shippers of America - Fall/Winter 2016 - 34


"Typically, we avoid businesses that
are in financial trouble as we do not
want to throw good money after bad.
In researching that, we evaluate
several lines on the income statement.
Obviously, we look at the bottom line.
We also want to know what they have
taken out for bad debts, salaries -
especially the owner's salary. What are
the retained earnings?
"If a company shows no retained
earnings because there aren't any or
because the owner is taking it all out
as salary, then what are we getting?
In the end, the income statement is
the biggest indicator of a company's
value."
ROAR also looks at cultural
compatibility. According to Rich,
ROAR wants a long-term partner with
happy, engaged leaders interested
in becoming part of the ROAR
management team.
"We want their intelligence," Rich said.
"We want them to help us incorporate

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| FALL/WINTER12016

their strengths into ours so that we can
grow together. This is important in the
transportation industry, because you
are buying a company's relationships
and good will. The last thing we want
is for key people to leave - and all of a
sudden their customers leave, too."
Start With the Preliminary Offer
When ROAR finds a company it likes
as a cultural, management and longterm business partner, it puts together
a preliminary offer based on its opening
valuation.
If the preliminary offer stirs the target
company's interest, both buyer and
seller redo all the numbers and put
a fine point on them. "Then you get
into due diligence," Rich said. "The
evaluation and due diligence process
in any acquisition can often be the
most challenging step. You need a
tremendous amount of information to
determine the acquisition price and deal
structure. Then you have to figure out
how to integrate the acquired entity into
the family.

"When we enter into a verbal agreement
to take a deeper look at a potential
acquisition prospect, we come prepared
with a comprehensive non-disclosure
agreement to protect their company
information as well as our company
information. That agreement is
particularly important if the deal does
not come to fruition."
Once the nondisclosure agreement is
executed, Rich continued, the buyer
asks the seller for at least three years
of tax returns and audited financials,
along with interim financials for the
current year. "This information," he said,
"assists us in formulating our initial
offer, which is most often derived from a
multiple of EBITDA."
EBITDA is a financial acronym for
earnings before interest, taxes,
depreciation and amortization.
Accountants use EBITDA to evaluate
the financial health and underlying
profitability of a company. From that
point of view, buyers and sellers find it
useful in negotiating deals.

The Shipping Solution You Need
Temp Protect | Dedicated | Expedited | TOFC

Matt Braden

mbraden@celadontrucking.com
Cell: 317-410-6538
Office: 317-972-7000 x22490

1/21/16 7:00 PM


http://www.celadontrucking.com http://www.CeladonTrucking.com

Table of Contents for the Digital Edition of Food Shippers of America - Fall/Winter 2016

President’s Letter
Meet Your Board
Mentors Make a Difference
Are You Partnered with a 3PL Yet?
Caution: Merging Traffic
Retailers Sharpen Supply Chain Visibility With Improved Technology
Parking Woes Continue
Electronic Logging Devices: Myths and Facts
Tax and Accounting Changes Will Impact Transportation Industry
Retail Trends
Positive Attitudes and Strong Relationships: Key Tools for Success
From Farm to Fork
Narrow Focus to Separate from the Pack and Increase Sales Momentum
Industry Forecast
The Internet of Things
Member Profile: C&S Wholesale Grocers
Preparing for the New Overtime Pay Rules
10 Ways to Become an Effective Manager
Culture at Work is Everything, and Everything is Culture
FSA Members
In the News…
Index of Advertisers
Food Shippers of America - Fall/Winter 2016 - cover1
Food Shippers of America - Fall/Winter 2016 - cover2
Food Shippers of America - Fall/Winter 2016 - 3
Food Shippers of America - Fall/Winter 2016 - 4
Food Shippers of America - Fall/Winter 2016 - 5
Food Shippers of America - Fall/Winter 2016 - 6
Food Shippers of America - Fall/Winter 2016 - 7
Food Shippers of America - Fall/Winter 2016 - 8
Food Shippers of America - Fall/Winter 2016 - 9
Food Shippers of America - Fall/Winter 2016 - 10
Food Shippers of America - Fall/Winter 2016 - President’s Letter
Food Shippers of America - Fall/Winter 2016 - Meet Your Board
Food Shippers of America - Fall/Winter 2016 - 13
Food Shippers of America - Fall/Winter 2016 - 14
Food Shippers of America - Fall/Winter 2016 - 15
Food Shippers of America - Fall/Winter 2016 - Mentors Make a Difference
Food Shippers of America - Fall/Winter 2016 - 17
Food Shippers of America - Fall/Winter 2016 - 18
Food Shippers of America - Fall/Winter 2016 - 19
Food Shippers of America - Fall/Winter 2016 - 20
Food Shippers of America - Fall/Winter 2016 - 21
Food Shippers of America - Fall/Winter 2016 - 22
Food Shippers of America - Fall/Winter 2016 - 23
Food Shippers of America - Fall/Winter 2016 - 24
Food Shippers of America - Fall/Winter 2016 - 25
Food Shippers of America - Fall/Winter 2016 - 26
Food Shippers of America - Fall/Winter 2016 - 27
Food Shippers of America - Fall/Winter 2016 - 28
Food Shippers of America - Fall/Winter 2016 - Are You Partnered with a 3PL Yet?
Food Shippers of America - Fall/Winter 2016 - 30
Food Shippers of America - Fall/Winter 2016 - 31
Food Shippers of America - Fall/Winter 2016 - Caution: Merging Traffic
Food Shippers of America - Fall/Winter 2016 - 33
Food Shippers of America - Fall/Winter 2016 - 34
Food Shippers of America - Fall/Winter 2016 - 35
Food Shippers of America - Fall/Winter 2016 - 36
Food Shippers of America - Fall/Winter 2016 - 37
Food Shippers of America - Fall/Winter 2016 - Retailers Sharpen Supply Chain Visibility With Improved Technology
Food Shippers of America - Fall/Winter 2016 - 39
Food Shippers of America - Fall/Winter 2016 - 40
Food Shippers of America - Fall/Winter 2016 - 41
Food Shippers of America - Fall/Winter 2016 - 42
Food Shippers of America - Fall/Winter 2016 - 43
Food Shippers of America - Fall/Winter 2016 - 44
Food Shippers of America - Fall/Winter 2016 - Parking Woes Continue
Food Shippers of America - Fall/Winter 2016 - 46
Food Shippers of America - Fall/Winter 2016 - 47
Food Shippers of America - Fall/Winter 2016 - 48
Food Shippers of America - Fall/Winter 2016 - Electronic Logging Devices: Myths and Facts
Food Shippers of America - Fall/Winter 2016 - Tax and Accounting Changes Will Impact Transportation Industry
Food Shippers of America - Fall/Winter 2016 - 51
Food Shippers of America - Fall/Winter 2016 - 52
Food Shippers of America - Fall/Winter 2016 - 53
Food Shippers of America - Fall/Winter 2016 - Retail Trends
Food Shippers of America - Fall/Winter 2016 - 55
Food Shippers of America - Fall/Winter 2016 - 56
Food Shippers of America - Fall/Winter 2016 - 57
Food Shippers of America - Fall/Winter 2016 - Positive Attitudes and Strong Relationships: Key Tools for Success
Food Shippers of America - Fall/Winter 2016 - 59
Food Shippers of America - Fall/Winter 2016 - 60
Food Shippers of America - Fall/Winter 2016 - 61
Food Shippers of America - Fall/Winter 2016 - 62
Food Shippers of America - Fall/Winter 2016 - 63
Food Shippers of America - Fall/Winter 2016 - 64
Food Shippers of America - Fall/Winter 2016 - 65
Food Shippers of America - Fall/Winter 2016 - 66
Food Shippers of America - Fall/Winter 2016 - 67
Food Shippers of America - Fall/Winter 2016 - From Farm to Fork
Food Shippers of America - Fall/Winter 2016 - 69
Food Shippers of America - Fall/Winter 2016 - 70
Food Shippers of America - Fall/Winter 2016 - 71
Food Shippers of America - Fall/Winter 2016 - 72
Food Shippers of America - Fall/Winter 2016 - 73
Food Shippers of America - Fall/Winter 2016 - Narrow Focus to Separate from the Pack and Increase Sales Momentum
Food Shippers of America - Fall/Winter 2016 - 75
Food Shippers of America - Fall/Winter 2016 - 76
Food Shippers of America - Fall/Winter 2016 - 77
Food Shippers of America - Fall/Winter 2016 - 78
Food Shippers of America - Fall/Winter 2016 - 79
Food Shippers of America - Fall/Winter 2016 - 80
Food Shippers of America - Fall/Winter 2016 - Industry Forecast
Food Shippers of America - Fall/Winter 2016 - The Internet of Things
Food Shippers of America - Fall/Winter 2016 - 83
Food Shippers of America - Fall/Winter 2016 - 84
Food Shippers of America - Fall/Winter 2016 - 85
Food Shippers of America - Fall/Winter 2016 - 86
Food Shippers of America - Fall/Winter 2016 - Member Profile: C&S Wholesale Grocers
Food Shippers of America - Fall/Winter 2016 - 88
Food Shippers of America - Fall/Winter 2016 - Preparing for the New Overtime Pay Rules
Food Shippers of America - Fall/Winter 2016 - 90
Food Shippers of America - Fall/Winter 2016 - 91
Food Shippers of America - Fall/Winter 2016 - 92
Food Shippers of America - Fall/Winter 2016 - 93
Food Shippers of America - Fall/Winter 2016 - 94
Food Shippers of America - Fall/Winter 2016 - 10 Ways to Become an Effective Manager
Food Shippers of America - Fall/Winter 2016 - 96
Food Shippers of America - Fall/Winter 2016 - 97
Food Shippers of America - Fall/Winter 2016 - Culture at Work is Everything, and Everything is Culture
Food Shippers of America - Fall/Winter 2016 - 99
Food Shippers of America - Fall/Winter 2016 - 100
Food Shippers of America - Fall/Winter 2016 - 101
Food Shippers of America - Fall/Winter 2016 - FSA Members
Food Shippers of America - Fall/Winter 2016 - In the News…
Food Shippers of America - Fall/Winter 2016 - 104
Food Shippers of America - Fall/Winter 2016 - 105
Food Shippers of America - Fall/Winter 2016 - 106
Food Shippers of America - Fall/Winter 2016 - Index of Advertisers
Food Shippers of America - Fall/Winter 2016 - 108
Food Shippers of America - Fall/Winter 2016 - 109
Food Shippers of America - Fall/Winter 2016 - 110
Food Shippers of America - Fall/Winter 2016 - cover3
Food Shippers of America - Fall/Winter 2016 - cover4
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