Request a Strategy Call and we will get in touch with you
Acquire a Business Insights
How to Purchase the Company You Work For
October 13, 2024 / in Acquire a Business, Business Valuation / by Exit Strategies
For many C-Suite employees, owning the company they work for would be a dream come true. If you’ve been leading a successful private business or are a seasoned member of its executive team, acquiring that business may be a realistic goal. Secure Funding Typically, the biggest hurdle in buying a business is obtaining the cash/equity and securing the debt financing necessary to close the deal. The good news is that a healthy business is an …
From the M&A Glossary: Caps and Baskets
September 20, 2024 / in Acquire a Business, Sell a Business / by Exit Strategies
Indemnity caps and baskets are key terms in business purchase agreements that relate to the seller’s indemnification obligations for any breaches of representations and warranties made by the seller. Cap The cap is the maximum amount of damages that the seller will be obligated to pay to the buyer for breaches of reps and warranties. For example, if the purchase price is $40 million and the cap is set at 10%, the seller’s maximum indemnification …
Exit Strategies Group Advises Custom Ag Formulators in Strategic Sale
August 15, 2024 / in Acquire a Business, Sell a Business / by Al Statz
Exit Strategies Group is pleased to announce that we recently served as financial advisors to the owners of Custom Ag Formulators (CAF), a North American provider of customized agriculture formulations and products for growers, in the sale of CAF to ICL, a leading global specialty minerals company. Founded in 1998 in Fresno, California, CAF offers a diverse assortment of liquid adjuvants and enhanced nutrients, as well as various other specialty products. CAF operates two U.S.-based …
M&A Tip: Use Acquisitions to Expand Your Business
August 8, 2024 / in Acquire a Business, Business Strategy / by Exit Strategies
In today’s competitive business landscape, standing still means falling behind. Business owners and management must constantly find ways to grow, and one of their most bold and strategic moves is acquiring other businesses. This “buy and build” approach can offer a fast track to expansion, with both benefits and inherent risks. Here we summarize the benefits and risks involved in inorganic growth, and the essential advisors needed to navigate this complex terrain successfully. Benefits of …
Is a Quality of Earnings (QoE) Analysis the Same as an Audit?
March 17, 2024 / in Acquire a Business, Exit Planning, Sell a Business / by Al Statz
Not exactly. A Quality of Earnings (commonly called a “QoE”) analysis used in mergers and acquisitions due diligence and a financial Audit serve distinct purposes. Here’s how they differ in terms of purpose, scope of work, timing and reporting: Purpose: QoE: The primary purpose of a QoE analysis is to assess the sustainability and reliability of a company’s earnings and cash flows. It aims to identify potential risks and irregularities in a company’s earnings that …
M&A Glossary: Quality of Earnings (QofE) Report
February 21, 2024 / in Acquire a Business, Exit Planning, Sell a Business / by Exit Strategies
A Quality of Earnings (a.k.a. “QoE” and”QofE”) report is prepared by a CPA firm to provide a detailed analysis of a target company’s revenue, expenses, working capital, EBITDA adjustments, etc. While not an Audit, a QoE provides buyers with important assurances on cash flows and risk. When buyers do this work internally its often just called “financial due diligence”, and when they outsource it, it’s called Quality of Earnings. See this post comparing a QoE …
Seller Sentiment Declined in 2023
January 17, 2024 / in Acquire a Business, Exit Planning, Sell a Business / by Exit Strategies
A seller’s market is when sellers feel they have an advantage or it’s a good time to sell, for instance when demand exceeds supply and there are more interested, active buyers than there are quality deals on the market. In a seller’s market, buyers compete in order to win deals. This typically translates to increased values and more favorable deal terms for the seller. The results of the latest Market Pulse Survey (Q3 2023) show …
Representation and Warranty Insurance in M&A
June 6, 2023 / in Acquire a Business, Exit Planning, Sell a Business / by Exit Strategies
When selling your business, you make a set of promises to the buyer. You “represent and warrant” certain facts about the business. Essentially, you’re certifying that you provided accurate information and there are no known issues pending (e.g., financial, legal, tax, compliance, etc.). If it turns out those promises are false, the buyer has the right to recoup a percentage of the purchase price. Non-fundamental reps and warranties (typically all items aside from key …
Rep and Warranty Insurance Now Available for Deals Under $10 Million
February 24, 2022 / in Acquire a Business, Sell a Business / by Exit Strategies
By Patrick Stroth In recent years, Representations and Warranty (R&W) insurance has become available to smaller and smaller deals. The eligible deal size dropped to under $20M… then under $15M. This is already quite a feat when you consider that the average transaction value (TV) for deals with R&W coverage in place is $500M. And to be honest, most insurers won’t go lower than $100M—Underwriters are already backed up on processing policies and insurance companies …
How Supply Chain Issues are Complicating M&A Dealmaking
February 2, 2022 / in Acquire a Business, Business Strategy, Sell a Business / by Al Statz
Many businesses are struggling with supply chain issues right now. After vaccine programs and government stimulus monies kicked in and economies roared back to life this past year, global supply chains came under immense strain as weaknesses were exposed. Though conditions have improved slightly in just the past few months, experts in most industries are forecasting that supply chain troubles will persist well into 2023. This article discusses some of the ways that supply chain …
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.
DRE #01878920
Member of
