Exit Strategies Insights

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

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M&A Advisor Tip: COVID-19 Era Due Diligence, Part 2

M&A buyers are still looking in the midst of uncertainty. However, buyers will be mindful of added risks caused by COVID-19. These are some technology-related questions that may come up in future due diligence: Do employees have the ability to work remotely – without frustrating workarounds? Does the IT system have sufficient capacity to support remote operations? Are further developments necessary to sustain a long-term virtual environment? Are security measures sufficient in a time of …

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M&A Advisor Tip: COVID-19 Era Due Diligence, Part 1

M&A buyers are still active in the midst of uncertainty. However, as you would expect, they are mindful of added risks caused by COVID-19. These are some talent-related questions that may come up in future due diligence: Did layoffs or other cuts impact the business’s ability to retain key employees? Did the business comply with state and federal laws related to layoffs and furloughs? How is employee health and well-being managed? Are policies and practices …

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Methods of Selling Distressed Businesses

As most companies transition from survival to rebuild mode in the second half of this year, some will become financially distressed and the owners will want to move on. Fortunately, for the shareholders and creditors of these companies, there is an active market for distressed business assets. Distressed businesses can be attractive acquisition targets for strategic buyers, and sellers can optimize financial outcomes through a proactive M&A sale process. Financial distress is a term in …

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M&A Advisor Tip: M&A in a Virtual Environment

Due to ongoing concerns over coronavirus, virtual meetings will continue to replace most of the in-person meetings typically held between a buyer and a seller at some stage in the business sale/acquisition process. When selecting an M&A advisor, be sure that they can help you best present your business in a virtual environment and run effective remote team meetings. And ask about their investment in virtual deal room technology. Virtual deal rooms store sensitive information, …

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Business Values May Not Decline

A recent survey of M&A advisors and business brokers showed that of all small and medium businesses on the market at the end of Q1, about 35% had closed (temporarily at least), 40% were operating at partial capacity, 4% had benefited, and 21% remained unaffected by COVID-19. Not surprisingly, advisors indicated that 46% of lower middle market deals were delayed at the end of Q1 and 11% had been cancelled altogether. For deal cancellations, 25% …

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M&A Advisor Tip: SBA debt relief incentivizes buyers

SBA debt relief is is a big incentive for buyers to move ahead with small business acquisitions right now. The SBA will pay six months of principal, interest, and any associated fees that borrowers owe for all current … as well as new 7(a), 504, and microloans disbursed prior to September 27, 2020. As an added incentive, SBA lenders have the authority to defer loan payments for six months. That means some buyers could acquire …

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M&A in Pandemic, Not Panic

Business advisors are digging in right now, trying to figure out how COVID-19 will affect their clients. We’ve been talking with business owners, active buyers, and other advisors around the country. Right now, we know that some M&A deals are getting delayed over routine process points. Certain bank approvals that used to happen in regular in-person review meetings are being held up as discussions take place via email chain instead. Some businesses with real estate …

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Market Pulse Survey: Deal Cancellations due to COVID-19

M&A advisors saw many of their business sale/acquisition deals delayed, put on hold or cancelled in March 2020 as a result of the COVID-19 Pandemic.  Who was cancelling these deals?  The following chart shows the results of this survey question from the latest Market Pulse Survey. Presented by IBBA, M&A Source & in partnership with Pepperdine University “Deal activity is always expected to constrict during times of uncertainty. Both sellers and buyers are being conservative …

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Controlled Private Short Sale using UCC Article 9: a Winning Alternative to Bankruptcy Sale

As a business sale advisor with Exit Strategies Group, I help business owners obtain the best price and terms available in the market during a sale process. We sometimes encounter situations where the owner would like to sell the business, but the business is in a distressed position with the following characteristics: the fair market value of a business is less than the outstanding debt on the business, the business cash flow does not support …

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Exit Strategies Group Advises Health Concerns on Sale to Life Seasons

Transaction advisory firm Exit Strategies Group served as exclusive M&A advisor to ADG Concerns, Inc. DBA  Health Concerns on its successful sale to Life Seasons, Inc. Health Concerns is at the leading edge of research in herbal medicine and is known for bringing the centuries of knowledge amassed in the Chinese herbal tradition to the West. Health Concerns was the first company to manufacture Chinese herbal products in the United States for practitioners. Today Health …

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