Tag Archives: Deal Terms

Be Prepared!

It is impossible to list all the issues and decision points that may arise in the course of selling or preparing your business for sale. Every Merger & Acquisition transaction is different. A successful sale requires early preparation from the seller to optimize the sales value of their business and minimize the risk of a […]

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Integration: The “Real Work” Begins…

Leading up to a transaction, buyers and sellers of companies can’t help but be enthusiastic about the endless opportunities that lie ahead. With all the synergies, growth possibilities and efficiencies to be realized; what’s not to be excited about!? This Honeymoon phase may continue post-transaction, but as integration becomes a reality, the excitement dissipates and […]

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Delta Services, LLC has been acquired by The State Group, Inc.

ABOUT THE DEAL: Delta Services, LLC has been acquired by The State Group Inc. Established in 2004 and headquartered  in Louisville, Kentucky, Delta Services is a privately-owned, bonded and fully-insured electrical contractor specializing in various types of electrical construction, communications systems, fire and security systems, safety services, utility distribution services, and PLC controls. Headquartered in […]

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Taking Chips Off The Table

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

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Do Taxes Matter?

Mergers and Acquisitions (“M&A”) are complex, multilayered, excitingly negotiable with endless options. M&A transactions present numerous tax planning and compliance issues. Below are tax considerations that appear repeatedly in middle market deals and only serve as a starting point for delving into more intricate and tedious tax issues: Structure – most commonly used structures are asset or stock purchases Reorganizations – tax-free reorganizations are subject to a myriad of IRS requirements Purchase price […]

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Net Working Capital: A Negotiated Target

In addition to the future earnings of a business, mergers and acquisitions require the delivery of the ordinary and necessary balance sheet of the business to the buyer. The balance sheet should be adequate for the continued operation of the business and exclude cash and long-term debt. Due to the varying nature of the balance […]

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The PE Alternative

Owners and stakeholders of companies with strong cash flows, defendable market positions, products and services in expanding markets and a management team capable of driving the business forward must consider private equity (PE) groups, or financial buyers, as a viable alternative to exiting their business. Although these groups vary in size and focus, most PE […]

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Intellectual Property Rights: Don’t Forget?

Intellectual capital is often the key objective in mergers and acquisitions.  Despite the importance of intellectual property rights (IPRs), intangible assets and goodwill, the assets are routinely misunderstood and are often under-valued, under-managed or under-exploited. “The cardinal rule of commercial valuations is that the value of something cannot be stated in the abstract; all that […]

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Know Your Options – PEGs

There are a host of prospective buyers for lower middle market companies (less than $75 million in revenues), and every possibility should be explored, vetted and considered. One buyer-type that must be on every business owners’ radar are Private Equity Groups (PEGs). PEGs provide access to capital, offer insights and expertise, assist with improving market share and operating efficiencies, and have […]

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Compete to Exit!

In the mergers and acquisitions marketplace, competition from multiple prospective buyers is an absolute necessity to maximize the sale’s value of an owner’s business. An experienced M&A Advisor will develop a Confidential Information Memorandum (CIM) designed to stimulate competition among potential buyers. The CIM reflects sales and marketing strategies to efficiently, effectively and confidentially attract qualified buyers from two major groups: […]

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Comstock Brothers Electric Company, LLC has been acquired by The State Group Inc.

ABOUT THE DEAL: Comstock Brothers Electric Company, LLC has been acquired by The State Group Inc. Established in 1999 and headquartered  in Louisville, Kentucky, Comstock is a privately-owned, bonded and fully-licensed electrical contractor specializing in various types of power distribution, electrical construction, process controls, conveyors, package handling, automotive, design-build and electrical testing. Headquartered in Toronto, […]

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Positioning, A New Year’s Resolution?

Whether a sale is in the imminent future or not, business owners who run their companies with a “for sale” attitude keep their companies tuned up, generating increased profits and boosting enterprise value. Fundamentals for positioning your company “for sale” value include: Have a plan, align organizational objectives, focus on what creates value, i.e. profitable […]

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The Confidential Information Memorandum

The mergers and acquisitions (M&A) sales process begins with the preparation of a thorough Confidential Information Memorandum (CIM). This critical document provides the framework for profiling a company and positioning it for sale.   An effective CIM requires collaboration between the Sellers and the M&A Advisor to capture the essence of the business. These conversations will include:   Company overview – history, who we are, what we do   Define the core business – processes, technologies   Strengths and weaknesses – success factors, […]

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Value Proposition

The value of a company is in the eye of the buyer; therefore, sellers of lower middle market companies should position their businesses to drive the strategic value and attractiveness before a possible sale transaction. Enhancing the value of a company is an ongoing process, and sellers should begin preparing their company for sale 18 to 24 months before marketing […]

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A Business Colonoscopy

The due diligence process in an M&A transaction involves a legal, financial, and operational review of all the seller’s documents, including contractual relationships, operating history, and organizational structure. Due diligence is a process and a test of the value proposition underlying the transaction to ensure that the seller’s company meets the expectations created before the […]

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Express Waste Removal has been acquired by a Private Investment Group

ABOUT THE DEAL: Express Waste Removal and Recycling (also referred to as the “Company” and/or “Sellers”) has been acquired by a Private Investment Group (the “Buyers”). Headquartered in Ellettsville, Indiana, the Company has provided cost-effectivve, reliable waste collection for over a decade to individuals and businesses throughout Bloomington, Ellettsville, and various other parts of Monroe […]

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First Date

In Merger & Acquisition activity, the anticipation of the first meeting with a potential Buyer may be very intimidating for the Seller. The Seller must be relaxed, open, honest and friendly; however, the Seller must be prepared and rehearsed to answer several questions: Why are you selling? What are you going to do after the […]

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“BS Earnings”

Earnings Before Interest, Taxes, Depreciation, and Amortization, or EBITDA, is one indicator of a company’s financial performance, and is often used to calculate the earnings potential of a business. Earnings are measured in terms of the approximate cash flow of the business to the owner(s) before income taxes and interest expense. Eliminating the tax effects […]

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Cashing Out!!

Sellers of middle market companies rarely receive all cash offers for their companies, and therefore, must compare multiple offers by weighing each component of consideration in accordance with its cash equivalency as a baseline. The two most common standards for weighing the components of consideration include: the time value of money and the probability of […]

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Reverse LOI

Executing a Letter of Intent (LOI) constitutes a critical juncture in merger and acquisition (M&A) activity, so why is an LOI for the most part nonbinding? A seller simply cannot afford the distraction, time and expense involved in having multiple prospective buyers simultaneously reviewing the seller’s confidential documents and performing due diligence. The fact that […]

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