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…
What will a strategic buyer pay? Ideally a premium, but what defines a premium? By definition, it is higher than the average price. But if the market will ultimately determine the price, where do you start? Start with the notional value A notional value determination is one in absence of an open market transaction, in…
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…
What is a financial buyer and what logic drives their approach to price and structure?…
When assembling a thorough buyer list, it does not necessarily need to include immediate competitors. Sellers will know the reputation of these companies in the marketplace and may not want their legacy in such a company’s hands…
Finding a buyer: it is rarely the one you expect. When an M&A Advisor is presenting his or her credentials to a prospective client, the part that typically has the most impact is illustrating that, either he or she already has a relationship with the perfect buyer, or that they can readily access the perfect…
When niche businesses receive unsolicited interest from key customers or suppliers, this can leave the owners wondering,.. is there another logical buyer for my business?…
Some business brokers will approach companies and say “I have the perfect buyer for your business. In fact I know…
A business development tactic that business brokers sometimes use is to say buyers are currently paying high prices in a particular sector. For example, after Facebook offered $1 billion for Instagram…
MBO stands for Management Buy-Out and is a form of acquisition where a company’s existing managers acquire a large part or all of the company from either the parent company or from the private owners. An MBO is one alternative for an owner-entrepreneur to exit his or her business. The management team buying the business can range from an experienced arm’s length team to family members who are active in the business. The advantages of an MBO include…
