working capital adjustment

Working Capital Adjustment in an Acquisition

Working Capital Adjustments in an Acquisition. Working capital adjustments are required when a going concern business is acquired by way of a share purchase agreement.  This is the case for two main reasons: (i) because working capital changes every day as revenues are generated and supplier and payroll payments are made and (ii), because working…

earn-out

Form of Payment: Should You Accept an Earn-Out?

Public company take-over bids typically consist of all cash or a combination of cash and shares.  Consideration in private company acquisitions will usually include a sizable portion in cash (50 to 100%) but will often include an unsecured note and/or an earn-out.  This is typically because: (i) the buyer does not have (or have access to)…

How long does it take to sell a company

Business Sale Time-frame (with milestone chart)

How long does it take, and what are the steps in selling a business?  Selling a business requires careful planning—everything from cleaning up the books and tax records to updating old operating systems—even ramping up marketing to accelerate sales to be able to command a higher asking price. All too often, an unexpected factor—an aging…

Winners Remorse

Buyers Remorse: Does the M&A Process Lead Buyers to Overpay?

Buyer’s remorse, also called winner’s remorse is the realization that you have won an auction by paying more than anyone else was willing to pay.  Does winner’s remorse mean you have overpaid?  Not necessarily.  When managing a company divestiture, there comes a point when interested parties are requested to provide non-binding expressions of interest (called…

Selling a Small Business

Time-frame and Steps in Selling a Business

When is the right time to sell your business? The ideal time to sell your business is when there are positive trends in revenue and earnings with the expectation of more to come.  Growth is very influential in attaining a strong valuation multiple and, while valuation is technically determined by future prospects, historical performance is the…