Part 1 of 7: The Challenge In advising business owners during this past year, I have seen, firsthand, how unforgiving the market has become. In one case, rather than wait to sign an LOI, a seller invested in audited financial statements simply to increase the odds of being shortlisted. In another, a business owner accepted the buyer’s premise that a full-price deal required that he stand behind his projections in the form of a significant contingent payment. Is the “unforgiving market” just t... Read Full Story

Mezzanine Debt Today’s economy has put many private companies in a tight spot.  Companies end up with too much bank debt as business volume and profits contract.  But lower earnings mean that company owners who would have been ready to sell their companies now can’t do it because they end up with too little after paying off their banks. So, how can you reduce your bank debt, improve your cash flow, and stay tough while you wait for the outside economy and your earnings to recover?  One answer... Read Full Story

Not Just For Big Companies Recently, I was asked to speak to a group of CEOs of mid-sized companies regarding EBITDA and its importance to them as business owners. Several questions from the group centered on what I will loosely call “tax avoidance” and “tax deferral” practices commonly employed by owners of privately held companies. The questions focused upon the impact of these practices on the value of a business. The common theme from the audience was, “buyers understand owners do not wan... Read Full Story

Not Just For Big Companies Recently, I was asked to speak to a group of CEOs of mid-sized companies regarding EBITDA and its importance to them as business owners. Several questions from the group centered on what I will loosely call “tax avoidance” and “tax deferral” practices commonly employed by owners of privately held companies. The questions focused upon the impact of these practices on the value of a business. The common theme from the audience was, “buyers understand owners do not wan... Read Full Story

Another look at “Valuation: Getting the Right Price When Selling Your Business”, an article by Gary Parker. I think Gary has done an excellent job of summarizing the valuation process. However, I feel that he and many others that have written about “valuing” your company have made the explanation too complicated or mysterious. This writing is an attempt to simplify the explanation of this process and to provide a conclusion that hopefully gives potential clients more comfort that professiona... Read Full Story

Another look at “Valuation: Getting the Right Price When Selling Your Business”, an article by Gary Parker. I think Gary has done an excellent job of summarizing the valuation process. However, I feel that he and many others that have written about “valuing” your company have made the explanation too complicated or mysterious. This writing is an attempt to simplify the explanation of this process and to provide a conclusion that hopefully gives potential clients more comfort that professiona... Read Full Story

Middle Market investment banking activities felt the effects of the financial crisis.  M&A deal volume for the middle market fell 39 percent in 2008 compared to 2007 and has fallen even further into 2009.  The harsh credit markets have left their mark on the middle market.  The average deal value in Q1 2009 was $64.1 million, down from $93.4 million in the fourth quarter of 2007.  The decrease in average deal size can be accredited to conservative valuations due to the added risk and limi... Read Full Story

Middle Market investment banking activities felt the effects of the financial crisis.  M&A deal volume for the middle market fell 39 percent in 2008 compared to 2007 and has fallen even further into 2009.  The harsh credit markets have left their mark on the middle market.  The average deal value in Q1 2009 was $64.1 million, down from $93.4 million in the fourth quarter of 2007.  The decrease in average deal size can be accredited to conservative valuations due to the added risk and limi... Read Full Story

For companies with valuations less than $100 million, deal volume for the first half of 2009 was down 58% compared to 2008 as reported by the Alliance of Merger & Acquisition Advisors (AM&AA). Those numbers don’t sound like good news for company owners who are ready to sell their companies, but that’s past.  The question is, what is coming? While the history is dark, the silver lining is in the external market factors, like these: Strengthening public stock market values are waking u... Read Full Story

For companies with valuations less than $100 million, deal volume for the first half of 2009 was down 58% compared to 2008 as reported by the Alliance of Merger & Acquisition Advisors (AM&AA). Those numbers don’t sound like good news for company owners who are ready to sell their companies, but that’s past.  The question is, what is coming? While the history is dark, the silver lining is in the external market factors, like these: Strengthening public stock market values are waking u... Read Full Story