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Sell a Business Insights
“In God we trust; all others bring data”: A Due Diligence Survival Guide for Sellers
February 8, 2023 / in Exit Planning, Sell a Business / by Al Statz
“In God we trust; all others bring data” is a famous quote from W. Edwards Deming that emphasizes the importance of data analysis in business decision making. The due diligence process is a critical part of every M&A transaction, and in today’s data-driven world, having relevant and accurate company data has never been more important. Buyer due diligence has become increasingly thorough and wide ranging over the 20 years that I’ve been advising sellers. Contributing factors …
New law exempting M&A Advisors from SEC registration is welcomed by small businesses and those who depend on them
February 7, 2023 / in News, Sell a Business / by Al Statz
The Consolidated Appropriations Act, 2023 (H.R. 2617), signed into law by President Biden on December 29, 2022, includes a provision exempting brokers that facilitate small business M&A (Mergers and Acquisitions) from federal broker-dealer registration. The section on “Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification” amends the Securities Exchange Act of 1934, effectively codifying the SEC’s sweeping 2014 M&A Broker No Action Letter. It benefits businesses who work with M&A advisors because advisors will no …
Better to sell early in consolidation. Here’s why.
February 4, 2023 / in Exit Planning, Sell a Business / by Al Statz
Consolidation is inevitable in maturing industries. As an M&A advisor working with owners of private wholesale distribution, manufacturing and industrial service companies, one of the questions I am often asked is whether it is better from a valuation perspective to sell early in a consolidation phase, or hold off. It depends of course, but generally earlier is better, all else being equal. I’ll explain why, but first I want to point out that industry consolidation …
Avoiding costly M&A delays and deal failure
January 17, 2023 / in Exit Planning, Sell a Business / by Al Statz
No matter how motivated the buyer and seller, selling a business is always a challenge. There’s a lot that can go wrong, and deals can fall through at any time. Delays are one of the biggest problems contributing to deal failure. The longer the process drags on, the more likely it is that a) someone gets fed up and moves on or b) something big will happen, economically or geopolitically, that disrupts the deal. Here …
Deal Killers: Undisclosed Liabilities
January 17, 2023 / in Exit Planning, Sell a Business / by Al Statz
We have a saying: “Go ugly early.” When you’re selling a business, put issues on the table right away. Whether you have ineligible employees on your payroll, you just lost a client, or litigation is pending—be up front. 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.
Exit Strategies Group Advises Parasound Products in Successful Sale
January 17, 2023 / in News, Sell a Business / by Al Statz
Exit Strategies Group, Inc. is pleased to announce that it recently served as exclusive M&A Advisor to San Francisco based high end audio manufacturer Parasound Products, Inc. on their successful acquisition by StarWarriors IV, a company controlled by David Sheriff, a serial entrepreneur with in manufacturing and supply chain management. Deal terms were not disclosed. Founded in 1980, Parasound has a long history of designing, producing and selling exceptional-value high-end home audio components to the …
Exit Strategies Group Advises on Successful Sale of MSM Inc.
December 15, 2022 / in News, Sell a Business / by Louis Cionci
Exit Strategies Group, Inc. is pleased to announce that it recently served as exclusive M&A advisor to the owners of Maintenance Supplies and Marketing, Inc. (MSM), a facilities maintenance supplies distributor serving Northern California, on their successful sale to BradyIFS, a leading distributor of foodservice disposables and janitorial/sanitation (“JanSan”) products. Deal terms were not disclosed. MSM owners Len and Lisa Polito along with Leigh Polito, Vice President of Operations expressed appreciation for the sale representation …
Deal Killers: Loss of Key Employees
December 8, 2022 / in Exit Planning, Sell a Business / by Al Statz
If you have certain employees who are critical to operations and would be hard to replace, take steps to secure them before a sale. Noncompete contracts can be one way to reduce employee defections. Take a look at your employee agreements, too, and ensure you have appropriate non-disclosure and “no raid” covenants. Give careful consideration to “stay bonuses” as well. Provide an incentive for employees to stay for a period of time post-closing. Talk with …
Deal Killers: An Ineligible Workforce
December 8, 2022 / in Exit Planning, Sell a Business / by Al Statz
If you run a business and you know you have ineligible workers on your team, you must disclose that in a transition. In limited cases, you may find a buyer who is willing to accept the problem and address talent issues after an acquisition. Unfortunately, if you’re selling your business to a strategic buyer (e.g. another company), you’ll find that the appetite for an undocumented workforce is generally low. Larger organizations don’t usually want to …
Operation clean sweep: Preparing your business for sale
December 7, 2022 / in Exit Planning, Sell a Business / by Exit Strategies
You’ve decided to sell. Now how can you get the most for your business? Real estate principles apply, so you’ll want to clean house and maximize your curb appeal. But that’s not all that goes into a successful business sale. You need to “clean up your act,” so to speak, and address some operational issues that may not have been a priority for you over the years. Clean up your financials. Many business owners run …
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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