The Sale Process

The Sale Process

The business sale process has a number of distinct stages and typically takes 6 to 10 months to complete.

The Business Sale Process

Finding the Right Buyer

Finding the Right Buyer

There are strategic and financial buyers. The best buyer is the one that benefits the most from the purchase.

Finding the Right Buyer

Valuation

Valuation

A business's value is determined by market comparables as well as business specific analysis.

Valuation

5 Things to Consider When You Receive an Unsolicited Offer

5 Things to Consider When You Receive an Unsolicited Offer

Unsolicited offers tend to come at inopportune times.  While some are actually opportunistic, most come out of the blue when the potential seller is not ready to receive them.  Unsolicited offers for private companies tend to come from immediate competitors, customers or suppliers and, these days, private equity is also actively searching for new platform…

Financial Buyer

What Will a Financial Buyer Pay?

What is a financial buyer and what logic drives their approach to price and structure? A financial buyer is one who is buying strictly for a financial return.  Financial buyers include individual investors, who have either saved up or cashed out, and institutional funds such as Venture Capital Funds, for early stage high growth opportunities,…

Best Buyer for Business

How to Select the Best Possible Buyer for your Business

How do you select the best possible buyer for your business? Simply put, companies with an ability to pay and an interest in paying a premium.   Assessing the ability to pay for private companies is not as straightforward as it is for public companies, which have to disclose their financial information to their shareholders (by way of EDGAR in the…

Normalization Adjustments

Normalization Adjustments for Private Companies

Historical operating income of private companies often requires adjustments in order to present a number that a buyer can reasonably expect going forward.  We call these “normalization adjustments”.  Profitable private companies will try to minimize their taxes payable.  This is simply good business practice. However, one must be reasonable; for example, the spouse of an entrepreneur…

Examples of Acquirers Paying a Premium

5 Examples of Acquirers Paying a Premium

Five Examples of acquirers paying a premium.  What are buyers looking for in acquisition targets?  The objective of an acquisition is to create value.  This is accomplished by improving profitability and/or reducing risk; both enhance earnings quality and drive value.  More specifically, acquisition objectives can include achieving economies of scale or economies of scope, vertical…

Revenue Quality

Revenue Quality: What Does it Really Mean?

High revenue quality companies are valued higher than low quality revenue companies.  But what does this really mean and why is this? It is simply a question of risk. High quality revenues reduce risk and therefore result in a higher valuation. What are high quality revenues?  Primarily it is about revenue continuity but also diversity and…

EBITDA Multiple

A Multiple of What (and When)?

When you hear an owner of a similar business to yours saying  “I sold my business at a 10 times multiple!”? or … the tech sector is trading at a 25 multiple.  Early stage companies trade at 2 to 3 times.  The question is a multiple of what?  In the first case it might be…