M&A – Business Valuation

Business Sales

  • Advantageous Planning & Preparation
  • Executing Complex Transaction Process
  • Identifying & Attracting Best Buyers
  • Promoting Competitive Bidding
  • Delivering Highest Possible Value
  • Structuring Tax-Saving Deals

BUSINESS SALE PROCESS

  1. Planning: Learn what it takes to sell a business and consider whether to take the next step.
  2. Business Valuation: Conduct a Business Valuation and a Tax Impact Assessment.
  3. Commitment: Review Decision to Sell & Consider the Sale Strategies (How much, to Whom, When & How?)
  4. Team: M&A Advisors, Legal & Tax Advisors.
  5. Sale Strategy: Assess what have you got to offer – Why would anyone buy your business? – Financial, Market & Operations Analysis.
  6. Buyer Analysis: Identify Logical Buyers, Reasons & Ranking.
  7. Pricing & Terms: Structure Sale Price and Terms – consider after tax net proceeds.
  8. Housekeeping: Get the Records and Due Diligence Package in order.
  9. Value Enhancement: Implement Changes needed to Enhance the Market Value.
  10. Marketing Tactics : Decide on Distribution Scope & Channels.
  11. Information Memorandum – Emphasis on Future (market & employees).
  12. Marketing Implementation – Search & Contact Buyers – Strategic Buyers.
  13. Buyers Qualification: Confidentiality, Motivation, Capability & Compatibility.
  14. Site Visits
  15. Buyer Questions & Analysis
  16. Letter of Intent: Deal Structuring & Negotiations
  17. Agreement of Purchase & Sale
  18. Due Diligence – Control, Monitor & Respond.
  19. Closing & Documentation
  20. Transition

Business Valuation

Can a cardio surgeon successfully perform a heart surgery without a thorough diagnosis?

Getting a professional valuation done before deciding to sell may save you lots of time, money and grief because the market may not be willing to pay what you expected. Privately held companies are valued much lower than publicly traded companies, mainly due to higher risk and lower liquidity. But there are many ways you can enhance the value of your private company.

What are the advantages and disadvantages of using multiples of historical Revenue, EBITDA or Earnings?

What are the advantages and disadvantages in using the Discounted Future Cash Flow method?

What are the impacts of qualities of revenues, cash flow, customer relationships, tangible assets, brand equity, intellectual properties, employee base, channel relationships and other variables on the multiples or capitalization/discount rates applied in valuation?

The valuation may uncover hidden values and provide useful negotiating tools. The valuator can identify weaknesses to be improved and identify the value drivers that will maximize the sale value. The better-prepared party with more comprehensive information will have an edge over the less-prepared party in negotiation.