Deal Structuring & Negotiations
Every deal is unique and the best deals require focused attention on the human elements. There are many complex and variable factors to be considered when exiting your business and each should be supported with strategy and experience.
Debt Sourcing & Structuring
There are a variety of reasons a company desires to change their capital structure and choosing the right option for your business can be daunting. We are skilled in identifying capital sources and tailoring a plan to meet the needs of your business. We have a robust network of capital providers, lenders and investors, generating a broad array of options and resources.
Merger & Acquisition Process Management
Contemplating selling your business can be the most difficult decision you make as a business owner. Your business is often the foundation of your identity, wealth and livelihood. With endless details to track during an exit, finding the right advisor to guide you through the process is crucial. We understand the emotional rollercoaster that comes with transitioning your business and the importance of managing the due diligence process effectively.
Frequently Asked Questions
Q: What happens to my employees after the sale is complete?
A: Employees will continue to play their role in the company just as they did before. The strength of a company and its ability to attract investment typically lies with its people. Any investor can buy equipment or open a new location but without the right people in place, many businesses simply are not marketable. An acquirer is making an investment into your company and wants to ensure their investment is secure. The best way to do this is with happy employees.
Q: Should I expect significant changes to operations once the sale is complete?
A: Change is inevitable. However, investors will look for ways to enhance the operation after it is acquired, not destroy it. Investors buy businesses for a variety of reasons: geographic expansion, financial opportunity, product expansion, customer expansion, etc. Creating upheaval in an organization is never the goal.
Q: What are my responsibilities and obligations once the sale is complete?
A: Often times this depends on your desire to participate after a transaction closes. This may also depend on the strength of leadership within the company. If there is a clear path to utilize an existing manger to fill the leadership role, you may be able to limit your interactions with the day to day matters or step away altogether.
Q: How is confidentiality and privacy maintained regarding my employees, customers and vendors during the process?
A: Confidentiality is often the number one concern when working through a transaction. We strategize with management to ensure strict confidentiality is in place throughout the process.
Q: How much is my company worth?
A: The easy answer is, it depends. Most companies are valued on a multiple EBITDA (Earnings Before Interest Taxes Depreciation Amortization.) Multiples vary, first, by industry and company size (Enterprise Value). Other factors affecting valuation and marketability are: profitability, geographic reach, customer mix, and product/service differentiation.
Q: What are the upfront fees? Are there any on-going costs or fees associated with the sale?
A: By rule we do not charge hourly fees or a retainer for our efforts when managing transactions. We believe it is important to align our success with the success of our clients and therefore get paid when you do. That stated, the only costs incurred before the transaction is closed are hard costs associated with the project (i.e. travel expenses, cost for any material produced, etc.) *Costs are billed monthly with supporting documentation.
Q: How are the proceeds paid out?
A: Every transaction is different based on the goals and requirements of the client. Very few transactions pay 100% of the proceeds on the day of closing. A small percentage of the proceeds is often held back for a short period of time after the transaction.
Q: What if I do not have enough time to operate my business and engage in a transaction?
A: Our job is to take that pressure off of you. Without a doubt, an owner’s input is required through the process. There will be a time investment required but we are able to take +90% of the headache away. The preparation and deal activity will take place behind the scenes so you can stay focused on your day-to-day operations.
Q: Am I able to use my own CPA or lawyer during the process?
A: Yes. It is extremely important for you to have competent tax and legal advice throughout the process. We work hard to collaborate with your advisors to ensure the best possible outcome for you. With regard to legal counsel, it is extremely important that they have transaction experience.
Q: Can I exclude assets from the transaction?
A: Yes. Oftentimes, closely-held businesses hold personal assets on the company’s balance sheet. It is common for those to be excluded and will typically be addressed during the due diligence period.
Q: What will the tax implications be?
A: Proactive tax planning is very important. We encourage this discussion early on in the process as there are many strategies available if addressed ahead of certain milestones. We will always encourage you to speak with your CPA and/or legal counsel about those strategies and are happy to participate in those discussions as needed.
Q: How long does the entire process normally take?
A: The average process takes 9-12 months. We have closed transactions in less than 60 days while others have taken years. It depends on a variety of factors: the current market for your industry, the timeliness in gathering material on the front-end, the accessibility of ownership early in the process, the overall economic environment, etc.
Q: Do I get to keep the cash on my balance sheet once the sale closes?
A: Almost every transaction is done on a cash free, debt free basis. This means that any cash on the balance sheet is yours to keep. At the same time, all of the debt is your responsibility to pay off at closing, with proceeds or prior to the transaction.