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Exit Planning Insights
From the M&A Glossary: Search Fund
October 10, 2024 / in Exit Planning, Sell a Business / by Exit Strategies
A search fund is an investment vehicle through which an entrepreneur raises capital from investors to fund the search for and eventually the acquisition of a privately-held company. The search fund model allows the entrepreneur to collect a salary while they search for a suitable target company and negotiate a letter of intent and perform due diligence. Once a target company is acquired, the entrepreneur usually takes an active role in managing and growing the business, …
Equity Rollover Benefits
October 8, 2024 / in Exit Planning, Sell a Business / by Exit Strategies
An equity rollover occurs when a business owner sells their company but chooses to reinvest, or “roll over,” a portion of the proceeds into the newly acquired business. An equity rollover allows a shareholder to benefit from any future growth and value creation. In a bolt-on acquisition or consolidation, the owner would likely receive equity in a larger, more diverse and less risky business enterprise. The benefits of an equity rollover for the shareholder include: …
Timing the Sale of Your Founder-Owned Enterprise
September 8, 2024 / in Exit Planning, Sell a Business / by Exit Strategies
For founder- and family-owned businesses, deciding to sell is much more than a financial decision. Its a pivotal moment that marks the culmination of years, often decades, of dedication and hard work. The timing decision involves personal and market factors that can significantly influence the outcome of a sale. Understanding the right moment to sell requires an appreciation of the market environment, the business’s lifecycle, and the personal readiness of the owners. Market Conditions The …
Add-On Acquisitions Continue Popularity
August 25, 2024 / in Exit Planning, Sell a Business / by Exit Strategies
PE firms are increasingly using strategic “add-on” (aka bolt-on) acquisitions to consolidate fragmented industries, particularly in sectors like healthcare and business services, where operational efficiencies and market share gains are achievable. This approach to growth allows firms to create more valuable and competitive entities more quickly than organic growth, usually with lower business and financial risk. These transactions often require less capital and can be financed through existing cash flows or smaller debt tranches, thus …
Business Sale Advice: 15 Insights from Past Sellers
August 13, 2024 / in Exit Planning, Sell a Business / by Al Statz
I recently surveyed a dozen former business owners—many of whom were my sell-side M&A clients and some who were not. I asked them to share the advice they give to business owners who plan to sell someday and the mistakes they should avoid, and several themes emerged. Here’s what they had to say … Assess Earlier. Many sellers wished they had commissioned a comprehensive business Assessment a year or two earlier. A proactive pre-sale evaluation …
From the M&A Glossary: Sale Leaseback
July 20, 2024 / in Business Strategy, Exit Planning / by Exit Strategies
A Sale Leaseback is a financial transaction in which a company sells an asset, usually real estate, to another party and then leases it back from the new owner for a negotiated period and other agreed upon terms. This arrangement allows the seller to convert the value of the asset into cash while retaining the right to use the asset through a lease agreement. Sale leasebacks can be advantageous for companies looking for a source …
Why Business Owners Sell, According to the Data
July 15, 2024 / in Exit Planning, Sell a Business / by Al Statz
Retirement is the number one reason business owners sell, but 40 to 50% of business owners sell for other reasons. For over a decade, the IBBA and M&A Source Market Pulse survey of M&A advisors and business brokers has been tracking what motivates owners to sell their businesses. And the reasons have been fairly consistent over the years. After retirement, these are the leading reasons according to the survey: 1. Burnout The long hours and …
M&A Advisor Tip: Don’t Let Your Emotions Get the Best of You
June 19, 2024 / in Exit Planning, Sell a Business / by Al Statz
What does it feel like when you sell? “Immense satisfaction tinged with loss.” That’s how one business owner described selling his business. After putting years of hard work and sacrifice into building a successful company, many owners have a hard time letting go. Emotions run high, and those emotions can lead to flawed and regrettable decisions. As M&A advisors, part of our role is to bring specialized expertise and objectivity to help you make sound …
Exit Strategies Group Advises Dynamic Solutions in Sale
May 15, 2024 / in Exit Planning, Sell a Business / by Al Statz
Exit Strategies Group has advised the owners of Dynamic Solutions, a California-based provider of industrial automation solutions, on their recent sale to Valin Corporation, a subsidiary of Graybar. Effective May 1, 2024, the acquisition significantly expands and adds technical capabilities to Valin’s automation and robotics group. Established in 1998, Dynamic Solutions specializes in precision motion control, machine vision, and collaborative robotics. Their team has over 120 years of combined experience in the industry. Dynamic Solutions …
It’s About Deal Structure in M&A
April 17, 2024 / in Exit Planning, Sell a Business / by Exit Strategies
Sometimes we work on the buy-side, helping strategic buyers and financial sponsors find and execute acquisitions. For one buy-side client, we approached a seller with what we thought was a fair offer, but the seller wanted more. We talked it over with our client and decided we could come close to the seller’s number, provided we got a specific deal structure. We arranged the deal with about 60 percent cash at close and 20 percent …
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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