Tag Archives: Deal Terms

“True-Up Payments” May Be Expensive

In merger & acquisition (M&A) transactions, the valuation and purchase price of a company normally assumes a going concern business which implies that the company will have an appropriate level of working capital to continue operations and support future growth. A purchase price adjustment is often used to assure both buyer and seller that a […]

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Transactions Structured for Success!

Transactions between buyers and sellers of middle market businesses are often complicated. Driven by opposing motivations and interests, both parties want the most advantageous deal for their side. Sellers must be sure to consider every offer, especially offers that are less than the asking price of their business. A “lesser” offer in hand will not […]

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Show Me the Cash in Private Company Stock

In company sell transactions, secured and unsecured promissory notes, public and private company stock, short and long term earn-outs, all consideration has to be measured to its equivalent value in cash. Equivalent cash measurements allow for the meaningful comparison of offers by Sellers, and it is necessary to enable Sellers to make rational and informed […]

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Kentucky Bourbon Barrel has been acquired by Independent Stave Company

ABOUT THE DEAL: Kentucky Bourbon Barrel (the “Company” and “Sellers”) has been acquired by Independent Stave Company (“ISC” and “Buyers”). Headquartered in Louisville, Kentucky, an important crossroads for the bourbon industry, the Company is a family-owned business selling high-quality, ready-for-filling used barrels to distilleries, wineries, and breweries around the world. The Company has become well-known […]

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Teamwork Makes the Dreamwork!

Selling a middle market business is a multifaceted process that requires tremendous preparation, patience, and strategic positioning. With the uncertainty of capital markets, the unpredictability of prospective buyers, and a business to run, business owners will find themselves well-served by assembling an experienced M&A Team to manage and execute a formal sales process. At a […]

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Define Your After- Sale Role?

When a buy/sale deal closes, many times the interests of the buyer and seller differ. Most sellers want to take all the consideration due to them immediately, and disappear. It is rare for a buyer to not want the seller to provide a seamless transition of the operations of the business just sold by remaining […]

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Brand Recognition Enhances Value?

Early orchestration of a strategy for your business’ brand will create additional value at the time your business is sold. A brand represents the face of the business; a unique and recognizable design, sign, symbol, or slogan employed to create an image that identifies a product and differentiates it from its competitors. Aside from generating […]

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Drive Value Through Operating Systems!

In addition to a knowledgeable and ambitious management team, developing innovative operating systems and procedures enhance the value of a business. Effective operating systems and procedures must be reliable, updated and maintained regularly, documented systematically, administered consistently, and adequate for growth of the business. Operating systems, or formalized business processes and procedures, are utilized most […]

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Management Team: Exit With A Deep Bench!

An experienced, motivated and stable management team is the most significant value driver of M&A transactions. Businesses with a strong management team focus on the sustained growth of cash flows and profitability, command higher valuations in the marketplace, and allow for the seamless exit of the owners. In the eyes of prospective buyers, there is […]

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Not From Concentrate!

Client concentrations may be the curse of M&A transactions. They cultivate uneasiness with buyers due to the potential loss of revenue, and raise significant concerns with major lending institutions. If a substantial percentage of a business’s revenue is generated by a limited number of clients, buyers tend to have apprehension regarding future cash flows and […]

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Earnouts: Creating Confusion or Promoting Prosperity?

Earnouts, although palatable in principle, may be complex in structure, difficult to define, and subject to unintended consequences. Thus, the gut reaction of most investment bankers to the proposed use of earnouts as an instrument to close transactions is unequivocally: “Don’t use them!” This declaration will more than likely be superseded by a full disclosure […]

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Brasch Constructors, Inc. has been acquired by A.L. Post, Inc.

ABOUT THE DEAL: Brasch Constructors, Inc. (also referred to as the “Company” and “Sellers”) has been acquired by A.L. Post, Inc. (“Post” and the “Buyers”). Established in 1989 and headquartered in Louisville, Kentucky, the Company is one of Kentucky’s leading construction companies. From new construction and site evaluation to Design-Build work, Brasch Constructors continually exceeds […]

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U.S. Nut and Bolts has been acquired by Nebraska Heavy Industries

ABOUT THE DEAL: U.S. Nut and Bolts (the “Company” and “Sellers”) has been acquired by Nebraska Heavy Industries (“NHI” or the “Buyers”). Headquartered in Louisville, Kentucky, the Company, a full service fastener distributor, has served the commercial, industrial and manufacturer sectors for nearly ten years. Nebraska Heavy Industries, a Lincoln, Nebraska-based conglomerate, has interests in […]

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Private Markets: Stop the Clock!!

According to Robert T. Slee, an investment banker and influential author of Private Capital Markets: Valuation, Capitalization, and Transfer of Private Business Interests, US private markets operate on a 10-year transfer cycle, and mid-market companies are currently in the midst of unprecedentedly high valuations and a pre-recession earnings boom (Seller’s Market). Slee’s corroborated data suggest […]

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BURGER KING® has been acquired by Carrols

ABOUT THE DEAL: Carrols Restaurant Group, Inc. (“Carrols”) (Nasdaq: TAST) has acquired six BURGER KING® restaurants in Kentucky and Indiana. Headquartered in Western Kentucky, the franchisee owns and operates six restaurants, and employs nearly 180 people. Over the last thirty years, the franchisee has built a talented workforce and a loyal, consistent, and predictable customer […]

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Did You Get What You Paid For?

Generally Accepted Accounting Principles (GAAP) are a framework of accounting standards, rules and procedures defined by the professional accounting industry. No single reference source exists for all of GAAP; briefly, the sources of GAAP are: Accounting principles promulgated by the American Institute of Certified Public Accountants (“AICPA”) including Financial Accounting Standards of the Financial Accounting […]

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Due Diligence: It’s in the Cloud!

Upon execution of the Letter of Intent (LOI), buyers and sellers kick-start the due diligence phase of the mergers and acquisitions (M&A) process. Due diligence, a most critical step in the M&A process, provides buyers the opportunity to confirm the seller’s financials, determine the risks, establish the potential benefits and understand the overall strategic fit. […]

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The LOI: Defining “is”

When contemplating a merger and acquisition (M&A) transaction, it is important to consider each step of the deal process seriously; beginning with the end in mind. Executing a Letter of Intent (LOI) constitutes a critical juncture in the M&A process; however, if it’s that important, why is it non-binding? The importance of an LOI in […]

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Up-Rite Systems, Inc. has been acquired by Fletchline, Inc.

ABOUT THE DEAL: Up-Rite Systems, Inc. (also referred to as the “Company” and “Sellers”) has been acquired by Fletchline Inc. (“Fletchline” or the “Buyers”). Established in 1993 and headquartered in Bardstown, Kentucky, the Company is a nationwide rack installation company; dealing exclusively in material handling equipment installations. Located in Springfield, Tennessee, approximately thirty miles north […]

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The Prospect Village Shopping Center has been acquired by Kroger

ABOUT THE DEAL: The Kroger Co. (NYSE: KR) has acquired The Prospect Village Shopping Center. Built in 2000, the Center is approximately 153,486 square feet, and anchored by a newly renovated Kroger Marketplace. Located on Hwy 42 in northeast Jefferson County in Prospect, Kentucky, the Center is conveniently located in one of the most affluent […]

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