The execution of a Letter of Intent marks a significant transition in the M&A process. At that point, the selected buyer typically receives exclusivity. The seller stops discussions with other prospective buyers while the selected buyer completes confirmatory M&A due diligence. Therefore, the transaction enters a different negotiating environment. Before the LOI, multiple buyers may […]
The private capital markets are experiencing strong transaction activity, favorable valuations, and significant demand for quality middle market companies. For business owners considering an exit, current conditions deserve careful attention. Robert T. Slee, an investment banker and influential author, examines private market cycles in Private Capital Markets: Valuation, Capitalization, and Transfer of Private Business Interests. […]
Preparing a company for sale may significantly improve its financial performance, reduce risk, and strengthen its value drivers. For many businesses, this preparation has the greatest influence on transaction value. Once the company is ready for market, the business sale process becomes another significant factor in the outcome. The process determines how prospective buyers encounter the […]
Business owners cannot manage their companies effectively without understanding what drives financial and operational performance. Financial statements provide essential information, but they primarily explain what has already happened. Business performance indicators help management anticipate what may happen next. Key Performance Indicators, or KPIs, measure the activities and results that matter most to a company’s success. […]
Business owners often ask what their companies are worth. However, that question does not have one answer for every circumstance. The purpose of a business valuation helps determine the appropriate engagement, standard of value, assumptions, and level of analysis. A valuation prepared for estate planning may differ significantly from an analysis supporting a potential business […]
ABOUT THE TRANSACTION: Carrols Restaurant Group, Inc. (“Carrols”) (Nasdaq: TAST) has acquired six BURGER KING® restaurants from a Western Kentucky franchisee (the “Seller”). The Seller has owned and operated six BURGER KING® restaurants located throughout Kentucky and Indiana. Collectively, the restaurants employ nearly 180 people and serve an established customer base across their respective markets. […]
After completing confirmatory due diligence, the parties move toward finalizing the purchase agreement. This definitive agreement governs the transaction and establishes each party’s binding obligations. The Letter of Intent provides the framework for these negotiations. It generally outlines purchase price, structure, consideration, working capital, and other principal business terms. The purchase agreement goes considerably further. […]
A business owner negotiating with one buyer has limited information about what the broader marketplace may offer. The buyer knows this as well. A competitive buyer process changes that dynamic by creating alternatives for the seller. Multiple qualified buyers strengthen negotiating leverage and provide meaningful comparisons among offers. However, generating a long buyer list does […]
A Letter of Intent marks a significant transition in the sale of a business. It moves the parties from preliminary discussions toward a defined transaction. The LOI should establish the principal business terms before the parties commit substantial resources to completing the deal. Most provisions remain nonbinding. However, certain provisions, including confidentiality and exclusivity, may […]
EBITDA provides a common starting point for valuing privately held businesses. Yet two companies with identical EBITDA may command very different valuations. One reason involves the capital required to generate and sustain those earnings. Understanding capital expenditures and business value requires looking beyond reported EBITDA. Buyers want to know how much cash the business must […]
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