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Sell a Business Insights
M&A Advisor Tip – Know Your Priorities
October 26, 2021 / in Acquire a Business, Sell a Business / by Al Statz
The market is still strong, and sellers are receiving multiple offers, but the buyers they choose aren’t always the ones with the biggest checks. Would you take a lower price to ensure that the buyer’s culture fits yours? How about a million-dollar price cut if it meant getting all cash at close and avoiding years of seller financing? Or trading $100,000 in salary to for an extra $1 million in sale price? Sellers face these …
Exit Strategies Group Advises Shaltz Automation in Sale
October 18, 2021 / in News, Sell a Business / by Al Statz
(Flint, MI) — Exit Strategies Group, Inc. recently served as the exclusive financial advisor to Shaltz Automation, a leading regional industrial automation solutions provider, in its acquisition by Flow Control Group (FCG), a portfolio company of KKR & Co. Inc. Deal terms were not disclosed. Headquartered in Flint, Michigan, Shaltz Automation provides advanced industrial automation products from many global manufacturers. Final mile assembly, manufacturing, engineering services, system integration, application know-how and technical support feature prominently …
Management Buyouts are a great option, but consider the risks
October 12, 2021 / in Exit Planning, Sell a Business / by Adam Wiskind
One of the more attractive exit options for you as a business owner is a management buyout (MBO). That is when your management team works together to buy either a total or a majority stake in your company, thus taking control of the company themselves. There are several benefits to selling your company to your management team: You can reward loyal managers with an opportunity to gain equity in the company. Managers are more likely …
The happiest business owners know what’s next
October 8, 2021 / in Exit Planning, Sell a Business / by Al Statz
I had the privilege of chatting with Bo Burlingham, former executive editor for Inc. magazine and author of several books, including Finish Big: How Great Entrepreneurs Exit Their Companies on Top. We talked about one of the key discoveries that led to the book, namely that so many business owners were unhappy after selling their companies. It didn’t really matter how much someone got for their business – some sellers were delighted while others were …
M&A Advisor Tip: Time Kills All Deals
October 8, 2021 / in Exit Planning, Sell a Business / by Al Statz
More than purchase price or structure, time is the most likely reason a business sale will fail. Time breeds frustration and fatigue. From irascible attorneys to disorganized brokers and licensing issues, plenty of factors can bog down a deal. Sooner or later one party or the other gets fed up and rationalizes, “It wasn’t meant to be.” Your advisor should have a reasonable client load (no more than four or five is ideal) so they …
M&A’s dirty playbook
September 23, 2021 / in Exit Planning, Sell a Business / by Al Statz
If you work in M&A, you can take a class on how to take advantage of people. It’s true! Buyers can go through mergers and acquisitions training, at some of the most prestigious universities, learning how to pay as little as possible for a family-owned business or privately held company. M&A transactions are complex, and it’s natural that buyers and sellers will have some competing interests. When both parties come to the table in good …
M&A Deal Terms: Fall 2021
September 21, 2021 / in Acquire a Business, Sell a Business / by Al Statz
You may have heard – it’s a bifurcated market. Declining caps on general indemnification against breaches of representations & warranties [1] had been a feature of the seller’s market for lower middle market businesses, going back well before the pandemic. Average caps have remained in the range of 15-16% of Total Enterprise Value (TEV) since the fall of 2020, according to GF Data’s semi-annual report on key deal terms, covering transactions by 243 active private …
M&A Advisor Tip: Stay Bonuses Add Value
September 10, 2021 / in Exit Planning, Sell a Business / by Al Statz
Confidentiality is important in a sale. But what do you do when critical employees must be informed? We recommend stay bonuses. A stay bonus provides an incentive for key employees to cooperate and assist with a sale. We see stay bonuses ranging from 20% to 100% or more of an employee’s salary. It’s common to allocate around 50% percent at closing and 50% six months or a year later. Buyers want assurances the management team will stick …
Can I retire if I sell my business?
September 7, 2021 / in Business Valuation, Exit Planning, Sell a Business / by Al Statz
Not every business owner wants to retire, but most do, someday. And in my experience as an M&A advisor, when an owner is ready, they want to move quickly. However, for business owners who have most of their net worth tied up in an enterprise that they personally manage, retirement planning is more complicated. If you are a business owner, obtaining answers to these two simple but powerful questions will bring clarity to your retirement …
M&A Advisor Tip: Fix Gas Guzzler Before a Sale
August 4, 2021 / in Exit Planning, Sell a Business / by Al Statz
Working capital is like gas in a car—it makes your business go. So when buyers acquire a company, they expect some “fuel” to be included in the tank. But when business owners get successful and comfortable, they get lax about working capital. They establish a habit of fast payment, slow collections, and excess inventory, and they turn their well-oiled machine into a gas guzzler. Go into a sale in this condition and you’re basically giving away money. …
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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