Buying and Selling

2021 M&A Analysis from a Buy-Side Firm

2021-01-06T10:59:41-05:00

We believe the small-to-midsize business mergers and acquisitions market looks positive going into 2021.  More Clarity and Certainty  As we put 2020 behind us, what does 2021 hold for us in the SMB M&A industry? We are now entering a new year where lockdowns give way to a vaccine, and there is more clarity around taxation, spending, and related policy from an expected divided government. These factors along with Q4 signs of substantive activity led us to believe the small-to-midsize business (SMB) mergers and acquisitions (M&A) market looks positive going into 2021.  2021 Market Factors  Looking at the details at the time of this writing, no one knows how to call the [...]

2021 M&A Analysis from a Buy-Side Firm2021-01-06T10:59:41-05:00

Eight Things to Consider When Selecting an M&A Advisor

2020-12-02T17:04:03-05:00

I have met thousands of business owners over the decades, and the majority of small to medium-sized business owners/entrepreneurs are “do-it-yourselfers.”   Most have survived many challenges along with some failures but have continued to work diligently which is why they are successful today. They believe in themselves, as they should, and many believe they do not need an M&A advisor - they can do it themselves.   Many studies have been completed over the years by various associations and the conclusions are consistent:   A competent, experienced M&A advisor will:   Remove a great deal of emotion from the owner, allowing them to make logical [...]

Eight Things to Consider When Selecting an M&A Advisor2020-12-02T17:04:03-05:00

Creating Favorable Deal Structures in Times of Uncertainty

2020-12-02T16:52:16-05:00

The COVID-19 pandemic put a temporary halt to virtually all M&A transactions earlier this year, and for good reason too. We’re about seven months into the pandemic and the future is still uncertain with no clear path forward. We are starting to see more deals put back on the table and buyers are reemerging to hunt for opportunities. The question is, how do sellers, buyers, investors, and their advisors find common ground to navigate these uncharted waters? As necessity is the mother of innovation, business owners and their advisors are adapting to the realities on the ground, developing unique strategies and [...]

Creating Favorable Deal Structures in Times of Uncertainty2020-12-02T16:52:16-05:00

If Buy/Sell Agreements Are So Important, Then Why Are They So Overlooked?

2020-11-05T13:50:58-05:00

Business owners, including business brokers, should take a moment to answer this important question: what happens to the interest in your company when you decide to sell your shares, you become incapacitated, or you are deceased? If your answer to the question is “I don’t know,” you aren’t alone. Many businesses fail to answer these important questions prior to entering into a new business venture with another individual. If a business has already been formed, it is likely too late for a business to incorporate these important what if’s into their by-laws. Furthermore, an amendment to the by-laws is not [...]

If Buy/Sell Agreements Are So Important, Then Why Are They So Overlooked?2020-11-05T13:50:58-05:00

Creating Value in Integrative Negotiations: Myth of the Fixed-Pie of Resources

2020-09-30T10:54:35-04:00

Integrative negotiations seek to create value and expand the pie  Creating value is the name of the game in integrative negotiations and these principles also apply to the highly competitive realm of business negotiations. In the business world, why is competition so often the norm, while cooperation seems like an impossible goal? One of the most destructive assumptions we bring to negotiations is the assumption that the pie of resources is fixed. The mythical-fixed-pie mindset leads us to interpret the most competitive situations as purely win-lose.  For those negotiators who recognize opportunities to grow the pie of value (see also, [...]

Creating Value in Integrative Negotiations: Myth of the Fixed-Pie of Resources2020-09-30T10:54:35-04:00

3 Legal Mistakes to Avoid When Selling a Business

2020-08-05T17:15:00-04:00

When preparing to sell a business, a mistake you will want to avoid is failing to pay enough attention to the variety of legal issues involved in a business sale transaction. The wrong legal mistake can stop a sale in its tracks. Worse, it could cost a small fortune to unravel. Thus, it is critically important to carefully analyze all relevant legal angles to the sale of your business. This post will look at some of the key legal points sellers should consider long before putting their business on the market.  Mistake #1: Neglecting to Have a Non-Disclosure Agreement  A critically important step [...]

3 Legal Mistakes to Avoid When Selling a Business2020-08-05T17:15:00-04:00

Diving into Diligence

2020-06-30T13:57:49-04:00

“Financial Due Diligence” (FDD) and “Quality of Earnings” (QoE) are often bandied around during a transaction —sometimes used interchangeably— but what’s the difference? In this post, I explore the key differences between typical FDD and QoE, including when each term applies and what they tell us.  Being Diligent  FDD and QoE are both exercises in diligence, but they serve different purposes – and sometimes at the same time.  On the buy- and sell-side of a transaction, owner-operators, lenders, investors, and, at times, regulators will request that FDD or QoE is performed so that relevant stakeholders can gain assurance and mitigate their risk.  From an owner’s perspective, [...]

Diving into Diligence2020-06-30T13:57:49-04:00

Why Now is the Time to Buy a Business

2020-06-30T13:43:42-04:00

Many small businesses have closed, severely reduced output, or are slowly reopening during the COVID-19 pandemic.  So why would a business buyer consider moving forward with a transaction in such a dismal environment?  This is why:  Business Owners are Motivated to Sell  A large percentage of small business owners are Baby Boomers that have survived 9/11 and the Great Recession. These owners are near retirement, yet they have been on the fence about selling and have had a difficult time walking away from the steady profits they have received from the recent strong economy. Now, COVID-19 is changing their outlook and many are ready [...]

Why Now is the Time to Buy a Business2020-06-30T13:43:42-04:00

What is Needed to Restart M&A Markets Post-Pandemic?

2020-06-02T16:02:24-04:00

Most people engaged in the business of mergers & acquisitions were flush with deal flow and new business opportunities prior to the COVID-19 shutdown. However, as the pandemic struck, the switch was turned off and M&A activity went dark virtually overnight. It’s no secret that M&A is cyclical. But, unlike prior economic downturns that have affected M&A, there were no underlying market conditions facilitating this slowdown. The switch was turned off as the result of a global health crisis. So, what happens next? Will the post-pandemic M&A markets revert to pre-pandemic activity levels? Will companies continue to be bought and [...]

What is Needed to Restart M&A Markets Post-Pandemic?2020-06-02T16:02:24-04:00

The 4 Types of Family Office Investors and Which Are Likely to Close a Deal

2020-06-02T15:38:30-04:00

Doing business with a single-family office (SFO) is not an easy proposition, even finding contact information for an office principal can be a daunting feat. There is a tension in how you think about family offices. Like Willie Sutton remarked about banks, you cannot disregard them entirely simply because “that's where the money is.” But at the same time, their reclusive and nebulous nature makes dealing with them even more challenging. What I would like to do today is review the family office marketplace in aggregate, and then offer you a framework for how to think about the various types [...]

The 4 Types of Family Office Investors and Which Are Likely to Close a Deal2020-06-02T15:38:30-04:00