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Acquire a Business Insights
‘No Shop’ Protects Buyer Investment in M&A
January 17, 2020 / in Acquire a Business, Sell a Business / by Exit Strategies
A no shop provision is an important part of M&A transactions. Also known as an exclusivity clause, a no shop clause prohibits the seller from sharing information or negotiating with other would-be buyers for a specified time frame. Prior to this, the seller is negotiating with several buyers. The goal is to entertain multiple offers and figure out which buyer will ultimately provide the best deal for the seller. Once the seller has identified their …
Nine Warning Signs Your Buyer Can’t Close the Deal
December 4, 2019 / in Acquire a Business, Sell a Business / by Exit Strategies
The proof is in the pudding. It ain’t over ’til it’s over. Don’t count your chickens before they’ve hatched. Pick your cliché. Just because someone makes an offer to buy your business doesn’t mean they will close the deal. As a seller, you need to look at more than dollar signs on a purchase offer. Make sure your advisors are researching and asking questions to figure out which buyers are for real, and which ones …
M&A Advisor Tip: What Buy-and-Build Means for You
December 4, 2019 / in Acquire a Business, Business Strategy / by Exit Strategies
Private equity firms have increased their use of buy-and-build investment strategies. A buy-and-build strategy involves bolting together several smaller companies into a larger business enterprise that will likely sell at a higher multiple. See our post on the size effect. This trend is affecting many industries, from healthcare clinics to niche business service companies. The uptick in buy-and-build acquisitions could mean more buyers and more competition for your business than you expect. Contact Al Statz …
Exit Strategies Advises on Management Buyout of Carpenter Crane Hoist
January 10, 2019 / in Acquire a Business, News / by Al Statz
MARE ISLAND, California – Exit Strategies is pleased to have recently served as financial acquisition advisor in management’s carve-out of the Carpenter Crane Hoist division from The Carpenter Group (TCG). The buy-out (MBO) was led by executives Dane Oliver and Ben Jones with the support of an equity partner. The acquisition marks the beginning of an exciting era for Carpenter Crane Hoist (CCH) as management implements plans to expand offerings and operations to address the needs …
Recent Changes to the SBA 7(a) Loan Program for Business Acquisition Financing
May 23, 2018 / in Acquire a Business / by Louis Cionci
SBA 7(a) loans are a popular type of financing for small business acquisitions. These loans go up to $5,000,000 and can be used to buy a business, real estate or equipment. Several changes to the SBA 7(a) program became effective in 2018 that are worth noting. Some of those changes include: Lower down payment. Required down payment has been reduced from 25% of the purchase price to 10% of the project cost (project cost = …
Current Market Multiples for Main Street Business Sales
December 6, 2017 / in Acquire a Business, News, Sell a Business / by Louis Cionci
Each quarter, The International Business Brokers Association (IBBA) and M&A Source together with Pepperdine Private Capital Markets Project and the Graziadio School of Business and Management at Pepperdine University publish a quarterly national survey of business brokers and M&A advisors called the Market Pulse Survey. Price multiples and other key metrics in the Main Street Market section of the Q3 2017 survey are presented below. Main Street businesses are defined as those with enterprise values …
First Steps to Buying a Business
October 25, 2017 / in Acquire a Business / by Don Ross
I work with a lot of sellers and buyers of small to medium sized businesses in the North San Francisco Bay Area. Most potential buyers do not succeed in buying a business, largely because they lack a systematic approach. A few weeks ago a high-net-worth individual asked for my advice on acquiring a business, and my reply was along the lines of the following. A simple five step plan that can help you target and …
California Loan Guarantee Program: A viable financing option for small business acquisitions
October 6, 2017 / in Acquire a Business / by Adam Wiskind
Banks often use the Small Business Administration 7a program to guarantee acquisition loans for small businesses. Because small business ventures face unique risks, most do not qualify for conventional bank financing. In most states, the SBA program is the only option; however, here in California a less well known alternative called the California Loan Guarantee Program is also available. California’s program is not new. Our state has been offering loan guarantees since 1968. It is administered …
How to Apply for an SBA Loan
August 16, 2017 / in Acquire a Business / by Exit Strategies
Thousands of small businesses receive funding for real estate, equipment, working capital and business acquisitions through loans guaranteed by the Small Business Administration (SBA). SBA loan terms are very reasonable. Down payments range from 10%-35% depending on various factors. Interest rates are generally 2-3% above the prime lending rate. This low cost of capital has helped many to achieve the dream of business ownership. SBA offers two loan types: guaranteed and direct. Guaranteed loans involve …
Show Me the Money: Financing Strategies for Small Business Acquisitions
July 21, 2017 / in Acquire a Business / by Adam Wiskind
Of the many considerations when purchasing a small business, one of the most important is how to finance it. Even if you have all of the cash you need to buy a business, as a smart investor you will consider whether you are better off borrowing some of the money or bringing in an equity partner to spread the risk. Each source of business acquisition financing has its benefits and drawbacks. Before you identify a business that meets …
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