Changes by owners helped a sale
Owners considering selling can look at the experience of a N.H. company for ideas of what to do to increase their chances for a good transition. Globe Manufacturing, a 4th generation family-owned business based in Pittsfield, is a great example. With sales at the time of $110 million, the company was sold for $215 million […]
M&A Advisor Tip: Earnouts Can Break a Deadlock
Earnouts can be used to address a perception of risk faced by a buyer. They also are used to bridge a valuation gap between a buyer and a seller. It’s a compromise, of sorts, to break a purchase-price deadlock when the seller wants more than the buyer is willing to pay. In an earnout, a […]
Dealing With Risks in the Sale of a Company
The passing last week of Harvard Business School professor Clayton Christensen – famous for his theory of business disruption – is a good time to consider business risk. Specifically, what are the risks faced by your business during a transition in ownership. For background, A visit to the Christensen Institute website finds this definition of […]
Use the Threat to Better Prepare
Today there is a lot of uncertainty about the future of business. There are things you can do to prepare for an eventual sale of your company – especially now. Many business owners are really hurt by shutdowns and reduced business. In this case, owners are wondering if they can survive. Others are busier than […]
Questions That Owners Should Consider
We have had many conversations with business owners in the lower mid-market who are unsure about the future and wonder whether they should sell or hold. Here are three things we should make sure owners think about. What matters most to you? Is it the highest price for you, the best outcome for the business […]
View Your Business from a Buyer’s Perspective
The more your business revolves around you, the more risk buyers see. “If you can’t take a vacation without either checking in once or twice a day or your business gets derailed,” says Dave Clough of mPower Advisors, “then your business is not ready for an ownership transition.” The less the owner has to be […]
Deal Problems to Avoid
It is common for owners heading into a sales process to ask about the chances of success. The question reveals the natural nervousness everyone feels when we head down an uncertain path. We have a great track record once a deal gets to letter of intent because we stay on top of details and are […]
Due Diligence
Due diligence is the process in which the buyer and the buyer’s advisors verify everything they have been given during the sales process, verify the quality of the assets involved, and look for any unpleasant surprises. Buyers need to obtain information required by the financing source and often ask for information to get a head […]
Working Capital: How it Affects a Transaction
There is often confusion over the issue of Working Capital (WC) in a transaction. Buyers usually expect a historical level of WC as part of the transaction, and it is already accounted for in the offering price. There are a few ways to compute the twelve-month average, and they all end up with the same […]
Why M&A Offerings Often Aren’t Priced
A question often posed by owners is how a business will be priced when it goes to market. In general, an M&A advisory firm like Business Transition Strategies will take a business to market without a specific offering price. That doesn’t mean we are going to market completely blind. It depends on strategy, process and […]