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How to avoid being surprised by your business valuation
December 11, 2023 / in Business Valuation, Exit Planning / by Exit Strategies
A significant number of business owners do not know how much their business is worth. That can be a source of conflict in the face of unfortunate events such as a divorce or a partnership separation. But it can be even more painful when the business owner plans to retire, only to find out the business isn’t worth as much as they expected. These owners may have harbored lofty expectations based on personal attachment, …
M&A Glossary: Indication of Interest (IOI)
December 11, 2023 / in Sell a Business / by Exit Strategies
An IOI is a non-binding letter used to express interest in acquiring a business. The IOI will typically include a value range, due diligence plans, a high-level proposal for deal structure, and expectations for seller transition. An IOI and an LOI are not the same thing. An IOI is like asking someone on a date, while an LOI is closer to an engagement ring. For advice on exit planning or selling a business, contact Al …
Address Culture Conflict Before a Sale
October 26, 2023 / in Exit Planning, Sell a Business / by Exit Strategies
As an owner, one way to maximize value in your business is to demonstrate that you’re not the smartest person in the room. In an ideal state, you work yourself out of a job, moving on to an advisory role while your management team runs day-to-day operations. With that said, it’s equally important that your goals and values are in sync with your managers’. When selling a business, you want to show buyers a positive …
Are You an Expert at What You Do?
October 16, 2023 / in Business Strategy, Business Valuation / by Joe Orlando
So what is an expert and, more importantly, are you one? The term “expert” has many definitions. For anyone who has written a wedding toast or sat through a valedictorian’s speech you know how the next sentence starts…Webster defines an Expert as “one with a special skill or knowledge representing mastery of a particular subject.” If you click through the link you will notice an obsolete definition for the adjective: experienced. This distinction is important …
Selling Your Business to an Existing ESOP is a Win-Win
October 5, 2023 / in Exit Planning, Sell a Business / by Adam Wiskind
While selling your business to a newly formed Employee Stock Ownership Plan (ESOP) is an intriguing and rewarding exit path, forming an ESOP can be complex and expensive, and is not appropriate for all businesses. But, what if you could sell your business to an existing ESOP company, allowing you to secure your financial future, secure the future success and legacy of your company, and benefit your employees? This is a real possibility for many …
Top 8 Reasons why Buyers Walk Away from an Acquisition
September 19, 2023 / in Exit Planning, Sell a Business / by Exit Strategies
Deciding to pursue a merger or acquisition can be a complicated process fraught with risk. Even when the financials look good and the potential rewards seem great, there are several reasons why a buyer might decide to walk away from a deal. Understanding these reasons can help sellers prepare for negotiations and improve the likelihood of a successful outcome. Here are eight common reasons why M&A buyers might decide not to proceed with a deal: …
Exit Strategies Group Advises California Caster in Strategic Sale
September 5, 2023 / in News, Sell a Business / by Exit Strategies
California Caster, a respected and long-established industrial hardware design and distribution company located in Oakland, CA, was recently acquired by OneMonroe, an international industrial hardware manufacturing and distribution company. Exit Strategies Group, Inc. advised the seller in the transaction. Terms of the transaction are confidential. California Caster was founded in San Francisco more than 70 years ago. Company services include the design and distribution of casters, hand trucks and other industrial hardware solutions. Customers …
Buy-Sell Agreement Valuation Resources
August 28, 2023 / in Business Valuation, Buy-Sell Agreements / by Al Statz
Every business with two or more shareholders should have a buy-sell agreement. A buy-sell agreement is a legally binding contract that restricts and governs how shares are priced and transferred between shareholders or partners of closely-held businesses when certain trigger events occur. Arguably, valuation is the most important (and argued over) aspect of buy-sell transactions. A good one-third of our business valuation work relates to internal equity transactions, and because this is an area of …
Strong Business Acquisition Prices so far in 2023
July 25, 2023 / in Sell a Business / by Exit Strategies
Valuations on deals completed in the first quarter of 2023 averaged 8.0x Trailing Twelve Months (TTM) adjusted EBITDA, rebounding from the 6.9x average recorded in 4Q 2022 and in line with the 8.2x average set in the third quarter. In Q1 2023, M&A transaction multiples experienced a rebound, indicating increased valuation levels compared to the previous quarter. This rebound despite increasing price of debt demonstrates a positive sign for sellers. For transactions between $10M-$50M, multiples …
A Student of Business
July 18, 2023 / in Business Strategy, Business Valuation / by Joe Orlando
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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