Brad Jacobs

I've seen an interesting business, maybe not perfect, but definitely good enough and would love to buy it, but I can't buy it at a price that makes sense.

So the IC in ROIC matters.

So the IC in M&A is the purchase price and whatever you're subsequently going to put into the business.

If there's CapEx improvements, invested, you want to grow it and that requires capital, the aggregate of your purchase price and how much money you're going to put in over the next year or two, assuming you're going to put in rather than take out money,

That's your invested capital.

And that's what you have to generate a return on.

So the purchase price is very important.

And you must stay disciplined on price.

If you overpay for an acquisition, you're in a hole.

And it may be many years of destroying value before you're creating value.

That's a sin.

No management should do that.

All the businesses that we've bought, we've integrated very tightly into the business.

We don't run a loose confederation of lots of different companies, which you see some business models and some of them work.

I don't like doing that myself.

I feel out of control.

I like to have everything standardized and one way of doing everything.

The price does matter, but the multiple matters too.

For example, when we looked at ourselves in the mirror at XPO Logistics a few years ago, and we said, look, we've been trading at eight and a fraction times EBITDA for a while now.

That's what the market says this is worth.