Buying and Selling

Making Intangibles Tangible: The Benefits of Measuring Intangible Assets If you have trouble understanding intangible assets, don’t worry – you’re not alone. Any discussion around intangibles can get complex due to accounting rules that are hard to explain, let alone understand. There are certain basic concepts, such as intangible assets, that as a manager you should know well. Why? Because intangibles are meaningful and material to your business at many different levels, and yet you cannot rely on accounting to help manage them because intangibles are not on your company’s balance sheet unless they have been acquired. And, in another strange [...]

Restrictive Covenants in M&A Transactions As most, if not all, M&A advisors have likely noticed, restrictive covenants, primarily in the form of non-competition and non-solicitation agreements or provisions, are customarily included in M&A transactions. The main purpose of including restrictive covenants in an M&A transaction is to safeguard the buyer’s value in the purchased business. By restricting the seller’s ability to compete with the purchased business, for a certain period of time following the closing of the transaction, the buyer is looking to ensure that the business that the buyer just acquired does not lose value due to the seller competing [...]

Earnouts Don't Deserve A Bad Reputation By Scott Bushkie, CBI, M&AMI When selling a business, an earnout is basically a commitment by the buyer to pay the seller a certain amount of money tied to future performance after a sale. While earnouts are a great way to boost the value of your company, they can be a dicey proposition for a seller. Even if you stay on with the business, you don't have complete control over how new ownership runs the company. If the business does well, you get paid. If business drops, you don't. Most times in the M&A world, [...]

Risk Of Recession: Should I Sell My Business Now Many economists are suggesting that the U.S. is heading towards an economic recession. BBVA projections indicate a 60% probability that a recession will begin in the next 24 months, and Deliotte points out that a slowdown is “increasingly likely.” As a business owner, a looming recession can be difficult and strenuous. Should you hunker down and try to weather the storm, or should you jump ship now before the going gets tough?  As with most complex business topics, the answer isn’t an easy one. There are several things to consider, and your [...]