Exit Strategies Insights

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

Sell a Business Insights

M&A Advisor Tip: ESG Diligence on the Rise in M&A

Companies that are able to showcase their Environmental, Social and corporate Governance (ESG) capabilities stand to gain a competitive advantage and make themselves more attractive to potential acquirers. ESG issues cover a wide range of corporate practices that could include everything from environmental stewardship, health and safety policies, employee well-being, community support, to corporate culture issues. In recent research from Datasite, 84% of dealmakers rated ESG as an “important/very important” M&A due diligence consideration. And 78% …

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Exit Strategies Group Represents Shareholders in the Sale of Gibson Engineering

Exit Strategies Group is pleased to announce that Applied Industrial Technologies has acquired Gibson Engineering Company, a value-added distributor and system integrator of industrial automation technologies. Exit Strategies Group served as the exclusive M&A advisor to Gibson shareholders. Gibson Engineering, based in Norwood, MA,  distributes advanced robotics, vision systems, sensors, motion and machine controls, material handling and other industrial automation products, and integrates mixed technology systems. For over 40 years, Gibson has been a trusted …

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Key Deal Terms – Fall 2020

GF Data collects and publishes proprietary business valuation, volume, leverage and key deal term data contributed by over 200 lower-middle market private equity groups and other M&A deal sponsors.  Two of the acquisition deal terms that they monitor are the survival period¹ on general reps and warranties and the cap on indemnification² against breaches of general reps and warranties.   The following table shows these limits for deals in the $10 million to $25 million enterprise …

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M&A Advisor Tip: Be able to articulate your growth story.

Buyers want to acquire businesses with profit AND growth potential. Where is your business headed? Will it still be relevant in 5 years? Where will growth come from? How will it outperform its industry peers? If you don’t have an expansion strategy at the ready, talk to an M&A advisor or an exit planner. We can uncover which parts of your business are most attractive to buyers. Then we can help you plan to increase …

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M&A Advisor Tip: How you know when it is time to sell

It may be time time to sell your business when … Revenue has plateaued and you no longer see how to grow the business. You’re not sure how to reach the next level on your own. Your industry is consolidating around you. The current probable selling price of your business will satisfy your personal financial goals and a major economic or political shift could erode value. You’d like to diversify your assets and are ready take …

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Better to sell early in consolidation. Here’s why.

Consolidation is inevitable in maturing industries.  As an M&A advisor working with owners of private wholesale distribution and manufacturing companies, one of the questions I get asked is whether it is better from a valuation perspective to sell early in a consolidation phase, or hold off.  My answer is always case-specific, but generally earlier is better, all else being equal. Before I explain why, I want to point out that industry consolidation is not always …

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Discover Exit Strategies’ New Checklist of COVID-Era Normalization Adjustments

For most of us, 2020 has been one of the most challenging years of our lives. The pandemic has affected business performance both negatively and positively, temporarily and structurally.  It will permanently reshape the global economy in several ways, most of which we are just beginning to understand. Change and uncertainty makes the job of valuing and appraising businesses and business assets more challenging. At the core of every business valuation analysis is the process …

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M&A Advisor Tip: Finish Strong

Begin the sale process while your business is on an upward trend. Buyers pay a premium for businesses with well-defined opportunities and a strong growth story. Too many business owners get tired or complacent and psychologically retire early, before the sale. In fact, after retirement, burnout is the number two reason business owners sell. Unfortunately, burnout usually leads to declining revenues and reduced leverage in the sale process. Stay focused until the end and sell …

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Lopsided Market Drives M&A Values in Pandemic

With all the upheaval in the world right now, you’d expect M&A deal values to take a dip. But recent market analysis shows that’s anything but the case. According to GF Data [1], companies with an enterprise value of $10 million to $25 million sold at an average multiple of 5.9 times EBITDA in the first two quarters, versus a 5.7 average from 2003 to present. Similarly, business sales with a transaction value of $25 …

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Selling Your Business in the Covid-19 Era

Business owners contemplating a sale may be asking the question: Is this a good time to sell my business or do I need to wait until the Covid-19 economic disruption is over? Let’s explore three interrelated factors to help an owner answer that question for their situation. Market Conditions Are their buyers for my business during this pandemic?  Yes, there is no shortage of buyers for well-run companies. That statement was true before Covid-19 and …

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