Mergers and Acquisitions
What Qualifies A Business To Be An M&A Transaction?
There are several situations that could make your company qualify for our M&A department:
- Your company has earnings greater than one million dollars. When businesses grow to this size, they become targets for acquisition by industry players.
- Your business is too large for an individual buyer to purchase or finance through conventional methods. Once your company is worth multi millions, a single individual usually will not purchase it (most multimillionaires do not wish to work).
- Your company is in an industry that is currently being “rolled up”. In some industries, strategic buyers that want to consolidate the marketplace will purchase even small businesses.
- Your business is experiencing incredible growth. If your company is running out of capital because of growth, it may be a mergers and acquisitions target.
- You want to grow your company and perhaps retain some equity. If that is the case, you will need M&A expertise.
The M&A Selling Process
Understanding Your Goals
We meet with you and perhaps your advisors to understand your future goals. There can be many situations that could be present. Important issues include:
- Your company is growing and you need capital.
- Your company is growing and you need expertise to take it to the next level.
- You would like to take some chips off the table.
- You need to retire and there are no family successors.
- There are family successors and they will need capital and/or expertise.
- You have been approached by your competition to sell your business.
- There is an industry consolidation happening.
- The marketplace is changing and you cannot or are not willing to invest to keep up.
- You’re tired and want to do something else with your life.
Whatever the issues are we need to understand them completely.
Review Your Options
There are many options that you must consider. Business Acquisition Experts can help you understand them all. Important issues include:
- Is it time to sell your business?
- Who are the buyers?
- Strategic or financial?
- Can I raise capital?
- Can or should I go public?
- Will I have to stay on and how long?
- What are BAE fees?
- Are their any upfront fees?
Business Acquisition Experts can help you answer “What is my company worth?”. Important issues include:
- Should I pay for a business valuation? How much? (Not 50k!)
- What multiples apply to my business?
- What methods or rules of thumb are used in our industry?
- Do assets matter?
- Do you apply gross sales?
- What are the tax implications?
Create A Strategic Plan
Those who fail to plan, plan to fail. BAE mergers and acquisitions will set up a plan of action to take your business to market. Important issues include:
- Which buyers do we approach first?
- How do we get the best price?
- How do we create completion for the deal?
- How do we keep it CONFIDENTIAL!
- How do we prepare the right marketing package? (Deal book!)
Network And Market The Sale
BAE works our mergers and acquisitions differently! Important issues include:
- The multifaceted approach. First strategic buyers, then financial, then open market.
- Create competition for the deal! To get you the best price!
- Qualify buyers.
- Review their qualifications.
Meet With Prospective Buyers
BAE will attend most meetings with buyers and be present on conference calls. We will prepare beforehand. We will also have a post meeting to go over how the meeting progressed. Important issues include:
- Meet with only the best buyers.
- How to handle conference calls.
- How to handle face-to-face meetings.
- Limited but important information.
Solicit And Review Letters Of Intent (LOI’s)
Business Acquisition Experts will work with you and your advisors to decide who is the best buyer, and which one will eventually close! Important issues include:
- Who’s the best buyer?
- Cash, notes, earnouts, stock, escrow?
- Senior debt, mezzanine, secondary?
- No shops and non-solicitation agreements?
Negotiate The Sale
BAE has an in house rigorous training program to refine negotiating skills. Most companies in the M&A process are professional buyers, you need an expert on your side. Important points include:
- Negotiation never ends.
- What should be in the LOI?
- When should the definitive agreements be drawn?
- How long for due diligence?
- Who pays the attorneys or CPAs?
- Is an audit necessary?
50% of unmanaged deals die in due diligence. The “Experts” will quarterback this process and keep everyone in the game. Important issues include:
- What information is necessary?
- Where is due diligence done?
- What to do when the buyer asks you to cut out the business intermediary, your attorney, or CPA?
- How not to get a “haircut” as the deal progresses!
Close The Deal
Once due diligence is over, then the mergers and acquisitions process must be completed. BAE will work tirelessly to get the transaction closed! Important issues include:
- Review and negotiate definitive agreements.
- Follow up with financing sources.
- Arrange real estate sales or lease transfers.
- Notify key employees at the appropriate time.
- Help arrange wire transfers.
- Make reservations for the celebratory dinner! (Perhaps even pick up the tab!)