One of the biggest mistakes that owners make in selling their company is being lured into a proprietary deal. The Definition of a Proprietary Deal Acquirers land a proprietary deal (or “prop deal”) when they convince owners to sell their businesses without creating a competitive marketplace. Acquirers...
The business sale process can be complex, which is part of the reason why it makes sense to have expert help in the form of an M&A advisor or investment banker. Legal mistakes can be very costly. A legal mistake can also bring the entire...
Optimism in the M&A market is at an all time high according to findings from the Q2 2018 Market Pulse Report published by the International Business Brokers Association (IBBA), M&A Source and the Pepperdine Private Capital Market Project. 21% of business advisors surveyed say 2018...
John McCann sold The Bolt Supply House to Lawson Products (NASDAQ: LAWS) at the end of 2017. McCann’s strategy involved learning from the acquirers who knocked on his door. He invited would-be buyers into his company and listened to what they had to say. He was...
In a prior article in this series we talked about the trade-offs related to the relative size of a company in comparison to its market position. However, if you look at a company’s size and compare it to its valuation, bigger is almost always better. Organic...
If you’re wondering what your business might be worth to an acquirer, there is a simple calculation you can use. Let’s call it “The Build vs. Buy Equation”. At some point, every acquirer does the math and calculates how much it would cost to re-create what you’ve...
Since one often hears the term “fair value” or “fair market value,” it would be easy to assume that “fairness opinion” means the same thing. A fairness opinion may be based to some degree on fair market value, but there the similarities end. Assume that...
Source: Datto Inc.’s “2017 State of the MSP Report”, based on a survey of nearly 1,200 MSPs in North America. 59% of MSP owners are between 35 and 54 years old. 21% of MSPs have over $5 million annual revenue, 20% have revenue from $2...
Every business wants to grow, but as it grows it often changes and some parts of the business may no longer be a good fit. When that happens, the company should consider selling that part of the business. That is called divesting. The principle behind divestment...
Are you a big fish in a small pond? Have you become the preeminent supplier in your market niche? If so, it can be a good news/bad news situation for a potential acquirer. The good news is that you likely have good name recognition and great...