Tag Archives: Goals & Expectations

When Opportunity Meets Need

Companies driven by growth strategies need to consider mergers and acquisitions, especially when the following motivations exist: To capture operational synergies To grow market share or access to distribution channels, markets or products To provide new capabilities, technologies or talent Opportunities exist when “targets” provide: Increase scale Broadened product and service offerings Geographic expansion New […]

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Calculation of Value: The Precursor to an Exit

Business owners contemplating an exit from their business should begin the transaction process by engaging an experienced M&A Advisor to perform a Calculation of Value. Although the requirements for a calculation engagement may be more limited than for a valuation engagement, business owners should expect an efficient and systematic approach to the calculation of their […]

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An Omnipresent Thought: The Liquidity Event

The thought of “cashing out” lingers in the back of every business owner’s mind. Confronted daily with time constraints, market volatility, hawkish competition, profitability and growth objectives, and employee satisfaction, business owners often neglect taking the necessary actions to establish a viable exit strategy. There are simply not enough hours in the day. However, business […]

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“Targeted” PEGs

For many smaller middle market companies (less than $50 million in revenues), Private Equity Groups (PEGs) are “targeted” buyers that seek to acquire ongoing, profitable businesses with realistic growth potential. PEGs provide access to capital, offer insights and expertise, assist with improving market share and operating efficiencies, and have a clear exiting path. Often times, PEGs […]

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The Babson College Survey

The Babson College Survey (http://www.babson.edu/executive-education/thought-leadership/premium/Pages/six-key-trends.aspx), directed by Babson College Professor Kevin J. Mulvaney, assesses and defines current trends that impact Buyers and Sellers of businesses. Among the survey’s key findings: It is still a Seller’s market for quality companies; Seller’s must develop a knowledgeable game plan to evaluate options and potential deal partners. Underperforming companies […]

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Mergers & Acquisitions Valuations

The Rule of Five holds that the Enterprise Value (the cash free, debt-free value of a business) of a Business is approximately five times its earnings before interest, taxes, depreciation and amortization (EBITDA), until demonstrated otherwise. The more informing M&A transactions are those closing at much greater multiples than five times EBITDA. There are several […]

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Clarifying the seller’s goals and realistic expectations

Sell transactions require open communication between the seller and M&A advisor to navigate challenges along the way and produce a “close”. Even good “deals” may be derailed by “surprises”. In order to survive the process and move to closing, seller’s goals must be aligned with realistic expectations. Maximizing the sale price may be the underlying […]

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Confidentiality and Playing Close to the Vest

Most M&A professionals will warn you that you can’t keep your intentions to sell your business close enough to your vest. Confidentiality in M&A transactions is a serious concern in four areas: With employees of the selling company With customers and suppliers of the selling company With competitors of the selling company and the public […]

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Exit strategies; do you have one!?

A great amount of real wealth is created when entrepreneurs sell their business. The secret behind ultra-successful entrepreneurs is their development and implementation of an exit strategy and timetable of events beginning with the start their business. The good news is the short and long term successes are not mutually exclusive. Exit planning is absolutely […]

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Valuing a Business from a Buyer’s Perspective

Sellers and buyer’s perspective vary greatly when looking at the value of companies. When it comes time to sell, it is important that the seller consider those factors that are important to a buyer. Buyers look at the expectation of future earnings; then use the characteristics below as risk factors affecting, both positively and negatively, the […]

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Valuation: What Is the Value of My Company?

The uses of business valuations are almost unlimited: buy/sell agreements, fairness opinions, purchase price allocations, estate planning, gift taxes, charitable contributions, shareholder transactions, Employee Stock Option Plans (ESOPs), solvency and insolvency opinions, collateral valuations, litigation support, etc. When selling one’s business, clarifying the seller’s goals and measuring those goals’ financial needs with the proceeds from […]

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Is It Time to Acquire?

The motivation to acquire is as plentiful and different as is buyers, sellers and kinds of deals. The goal of an acquisition is to increase your competitive advantage by gaining: New Capabilities: adding new products and services. New Customers: expanding the customer base, increasing revenues with higher earnings. More resources: adding new and fresh talent, […]

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Maximizing the Sales Value of Your Business

Maximizing the sales value of a business involves focusing on the “value drivers” of the industry. Value drivers are the set of key factors that reduce financial risk, improve financial returns and create value for the company. These aspects are used by buyers, investors and financial lenders to determine the value of a company. Value […]

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What services can an Investment Banker provide to the seller of a business?

Upon engaging an Investment Banker to sell their business, a seller can expect the firm to find a buyer for the sellers’ business at the highest possible price with the most advantageous terms. The Investment Banker would provide the following services to accomplish this goal: Provide the seller with a business valuation confirming the expectations of the seller with […]

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