Articles

“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 […]

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 […]

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 […]

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 […]

In our previous article, we broke down one of the most considerably penetrating compliance changes in over a decade (Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09)) and its significant impact on private equity groups. Between May 2014 and today, amendments and implementation guidance for both companies and practitioners have […]

Back in May of 2014, FASB issued one of the most considerably penetrating compliance changes in over a decade (Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09)). Between May 2014 and today, amendments and implementation guidance for both companies and practitioners have been released with Topic 606 effective for private […]

Though search funds still make up a relatively small percentage of lower middle market investors, this investment model continues to gain prominence. In December 2019, I had the pleasure of attending the HBS Entrepreneurship Through Acquisition (ETA) conference for my third consecutive year. It’s been incredible to see firsthand the search fund community gaining prominence. […]

Growth by acquisition can be a risky proposition, but it carries less risk when compared with organic growth. In theory, you are paying market value for a book of business that will immediately begin generating cash flow. If the valuation is reasonable, then the deal should be appealing to shareholders. In contrast, organic growth or […]

How to protect your client’s business value from unplanned, chance events. As we all know, there are rarely good surprises in business. Record concurrent years of positive economic growth are behind us, with an unclear future. Risk exposures beyond our control loom daily — tariffs, trade wars, industry slowdowns, recession, partisan politics or international crisis. […]

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 […]