Exit Strategies Insights

Industry insights, knowledge base and announcements for business owners and professional advisors

Sell a Business Insights

Biden tax plan driving business owners to market

During his campaign, President Biden proposed tax changes that could have a significant impact on business owners. Any business owner contemplating an exit in the next few years should consider how potential tax changes could reduce their net proceeds from a sale. If Biden’s tax plans come to fruition, the capital gains tax rate could effectively double, from 20% to 39.6% for income exceeding $1 million. Right now, that means business owners need to shift …

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8 Situations in Which Setting an Asking Price for Your Business Makes Sense

As M&A advisors, our objective in most sale processes involving a privately held lower middle market business is to help our client obtain the best price and terms available in the marketplace. In many of our sale engagements, we go to market without an asking price and use a broad or targeted auction format to elicit the best price and terms from multiple suitors. When buyers feel competitive pressure, they are more likely to make …

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Exit Strategies Advises Vege-Kurl on Sale to Private Equity group

Exit Strategies Group is pleased to announce that its client Vege-Kurl, Inc., a manufacturer of high-quality personal care products, has been acquired by private equity group Hemingway Capital. Founded in 1959, Vege-Kurl Inc. and its subsidiary Joar Labs is a private label contract manufacturing partner and formulator of high quality organically certified efficacious cosmetic, cosmeceutical, health & beauty, and household products. The company provides a wide variety of products such as shampoos, conditioners, hairsprays, serums, …

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M&A ADVISOR TIP: What happens to employees after I sell?

Business owners often come to us concerned about employee jobs and retention issues after a sale. They worry that selling their business will lead to job losses if certain positions become redundant. However, buyers today are often just as focused on retention issues. Your experienced talent can be a key driver of enterprise value, and buyers want to make sure these people stick around. Your management team is the highest priority retention target, and deal …

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March 2021 – Now may be the time to sell your business

It typically takes 6-12 months (or more) to sell a business. So… if you want to sell your business in 2021, you really need to start now. Selling a business has many steps: 1. Assess the business to establish probable selling price and validate your decision to sell 2. Create a plan 3. Build a business sale team – intermediary (Exit Strategies), attorney, CPA, others 4. Develop market materials – NDA, Executive Summary, CIM (confidential …

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M&A Financing During the Pandemic

The pandemic has put lower middle market business sales and acquisitions on somewhat of a roller coaster ride. Deal volume declined sharply in Q2-Q3 and came back strong in Q4. Valuations have remained strong throughout the pandemic, at least for COVID-resistant businesses. Though there was a slight Covid-effect in Q2-3. In terms of M&A financing, capital structures shifted to slightly more less debt during 2020, before edging back up to pre-pandemic levels in Q4. To …

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Market Pulse Survey: Still a Seller’s Market

Despite the effects of the pandemic, we continued to experience a seller’s market in the fourth quarter of 2020, for businesses with enterprise values over $2 million. Presented by IBBA & M&A Source For further information on M&A market conditions, or to discuss a current business sale, acquisition or valuation need, contact Al Statz, 707-781-8580 or alstatz@exitstrategiesgroup.com.

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M&A ADVISOR TIP: Cybersecurity is a Buyer Priority

New research from Datasite reveals that cybersecurity is the #1 cause of buyers withdrawing from a merger or acquisition during due diligence. Deal makers said about 1 in 10 deals fell through during due diligence. Cybersecurity issues was the cause in 36% of these failed deals, followed by financial weakness, excessive valuation, financial irregularities, and leadership issues. To ensure that your data security practices will not be a concern for prospective buyers of your company, …

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Exit Strategies Group Advises on the Sale of Poly Seal Industries

Exit Strategies Group recently advised the owner of Poly Seal Industries on a sale to Goodyear Rubber Company. Founded in 1974, Poly Seal Industries is a Berkeley, California based manufacturer of molded rubber products for customers in the biopharmaceutical, water & wastewater treatment, chemical, healthcare, food & beverage, and consumer electronics industries. In addition to producing quality custom products, Poly Seal helps customers succeed by providing manufacturing engineering and material science expertise. Goodyear Rubber Company …

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Tax changes could accelerate business sales in 2021

To complete deals in 2021, ahead of possible tax changes, owners and deal teams need to act fast. With the Democrats in the White House and having the tie-breaking vote in the senate, it is likely that taxes on corporations and wealthy individuals will increase during this administration. When and how much are unknown. With COVID recovery as the administration’s immediate priority, many think we will have until 2022. Biden has proposed raising long-term capital …

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