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 […]
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 […]
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 […]
Synergy is the magic dust that allows for the achievement of revenue enhancement and cost efficiencies in business mergers and acquisitions. The value of synergy depends entirely on the assumptions made about how combined businesses will operate after closing. The assumptions are unique to the companies involved in the deal and may not always be […]
A multiple of EBITDA (earnings before interest, taxes, depreciation and amortization) is a means to reflect the economic value of an operating business and is a significant driver of sale price discussions in M&A transactions. EBITDA represents the earnings stream (free cash flow) produced by a company available for distribution to the investor. Multiples are […]
Once the preparation for the sale of a Company is complete, the major decision becomes what “auction” path should the sale process take. Auctions in the M&A Process are focused on eliciting competitive bidding among interested parties to facilitate the sale of a business at the highest price and on the best possible terms. The formal […]
A key step in the sell-side merger or acquisition process is generating a list of potential acquirers. Today, M&A professionals avail themselves to extensive and expensive research tools which help them in identifying possible buyers for their sell-side clients’ businesses. This relatively straightforward exercise of identifying likely acquirers from databases may be greatly enhanced by a creative approach to […]
Earn-out agreements have long been introduced into merger/acquisition transactions when Buyers and Sellers have a “price gap” impasse; yet both have the common goal of arriving at an agreement that meets the needs of both Parties. Earn-outs may also provide a flexible way to deal with Buyer/Seller differences, future uncertainties and post-acquisition potential. Most successful […]
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, leveraging technologies or […]
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 the […]
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