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Creative deal structures and deal terms move to lower middle market
January 24, 2022 / in Buy-Sell Agreements, Sell a Business / by Al Statz
When selling your business, price is not the only important factor you’ll negotiate with a buyer. The deal structure includes a wide range of considerations from transaction type, ownership and payment structures, working capital, assurances, timelines, and more. What we’re seeing in the market right now is a rise in creative deal structures. These are non-typical solutions that help dealmakers bridge some sort of gap between the buyer and seller. If properly negotiated, these structures …
Market Pulse Survey – Quarter 3, 2021
January 24, 2022 / in Business Valuation, Sell a Business / by Al Statz
Presented by IBBA & M&A Source For advice on exit planning or selling a business, contact Al Statz, CEO of Exit Strategies Group, Inc., at alstatz@exitstrategiesgroup.com. Exit Strategies Group is a partner in the Cornerstone International Alliance.
M&A Advisor Tip: Value = Risk vs. Reward
January 24, 2022 / in Business Valuation, Exit Planning, Sell a Business / by Al Statz
Buyers value your business based on risk (real or perceived) and future cash flow. Consider potential business risks. What could prevent your company from realizing your forecasted earnings? Think talent, customers, suppliers, competition, cash flow. Strategize ways to reduce risk in each area, e.g. cross training, outsourcing, succession planning, customer diversification, backup suppliers, etc. The more you do to take away potential pain points, the more attractive your business will be. For advice on exit …
Valuing Personal Goodwill
January 17, 2022 / in Business Strategy, Business Valuation / by Victor Vazquez
What is personal goodwill? Before starting our discussion about personal goodwill, it is necessary to establish a common ground to understand the concept. First, it is an identifiable intangible asset that will generate future economic benefits to the asset owner. While there is no standard definition. Adam Mason and David Wood searched various textbooks, articles, and leading court cases[1]that define this term. From that exercise, we chose to utilize the following definitions for our discussion; …
Exit Strategies Group Celebrates 20th Anniversary
January 7, 2022 / in Exit Planning, News / by Al Statz
I’m proud to announce that 2022 marks a new milestone for Exit Strategies Group – our 20th year in business! I really appreciate those entrepreneurs and professional advisors who put their faith in us in those early days, and I thank the hundreds who have relied on us since. We have grown slowly and steadily since 2002 through an interesting range of market conditions. Today we have a team of 14 accomplished professionals committed to …
Exit Strategies Group Announces Successful Sale of AAP Automation
December 24, 2021 / in News, Sell a Business / by Al Statz
(Englewood, CO) Exit Strategies Group, Inc. is pleased to announce that it recently served as exclusive M&A advisor to the shareholders of AAP Automation on their successful sale to Ohio Transmission Corporation (OTC), a portfolio company of Genstar Capital. OTC is one of the largest industrial distributors and service providers in the United States. AAP Automation will operate under OTC’s Industrial Products Group segment. Financial terms of the transaction were not disclosed. Founded in 1982 …
When selling your business is your succession plan
December 22, 2021 / in Exit Planning, Sell a Business / by Al Statz
How old are your key employees? This is becoming one of the key issues buyers care about when acquiring a business. It’s not a case of agism – buyers would love for your senior employees to stay. It’s about risk and how soon the business’s pivotal people are going to retire. Right now, 10,000 Baby Boomers turn 65 each day. In 2020, 3.2 million Boomers left the workforce, and this trend is likely to continue. …
M&A Advisor Tip: The Case of the Missing Successor
December 22, 2021 / in Exit Planning, Sell a Business / by Al Statz
Businesses are facing talent shortages at all levels – at the front lines and in the C-suite. In some industries, like construction, talent issues can complicate exit plans. At some point, there may not be enough leaders left to take over for all the owners who want to exit. Now more than ever, succession planning can protect your business value. Buyers are looking for companies with a strong management team ready to lead. If you’re …
How 100 minus 90 equals 20
December 7, 2021 / in Buy-Sell Agreements, Exit Planning, Sell a Business / by Al Statz
Here’s a story of how 100 – 90 = 20. We recently represented some owners who had lots of options when it came to selling their business. They had a high demand manufacturing operation, and buyers wanted in – offering everything from minority or majority investments to full exit options. At first, the sellers thought they wanted a full exit, all cash at close. If they were going to give up control, they figured it …
M&A Advisor Tip: Make contracts assignable
December 7, 2021 / in Exit Planning, Sell a Business / by Al Statz
One key factor that significantly impacts the value of any contract is whether it’s assignable. Don’t put yourself in a position of negotiating assignability at time of sale. It eliminates confidentiality and opens the door for customers to highjack your deal. Knowing your company is for sale—and that the sale is dependent on their contract—shrewd customers will ask for lower prices or more favorable terms, knowing you’ll likely agree to anything reasonable. You and your …
Exit Strategies Group, Inc. is a leading provider of business sales and acquisitions, business valuations, and exit planning services for family owned and closely-held companies since 2002.
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