M&A Advisory
Ad Astra Equity
It is possible to execute a competitive sale process of your business on your own, and we have advised some of our clients to do this. But in truth, most business owners are not up for the enormous amount of work required to do this properly. They want an expert to do it for them, and to do it well.
Selling your business, even with an advisor, involves quite a lot of work. But attempting to execute a sale process across hundreds of potential buyers, preparing all of the marketing materials required, answering all of their questions – that is a colossal amount of work. Let us handle it for you instead.
Business Exit Planning
Do you have a business exit plan? 83% of business owners have not written down a transition plan. Business exit planning can be a long process that requires experience and a well defined path.
Key considerations for business exit planning can consist of objectives, a timeline, intentions for the business, and market conditions.
Why is a business exit plan important? Because business owners can become fatigued, gives the owner a better understanding of key performance indicators, helps to develop effective leadership for continue business growth, and allows for a smooth operation to exit.
Buyer Analysis
Like a marriage, finding the right business partner is extremely important for long term success. Because we take the time to get to know you, your financial goals/needs, and your company, the buyer lists we create are well researched. Depending on your goals, we will create a list that includes strategic, financial, family offices, private investors, and synergistic buyers that are the best fit for your business. You will have final approval on all buyer lists we create, prior to sending out information.
Deal Structure
While very important, price is not the only thing that matters in a transaction. Deal structure is just as equally important. Would you offer a buyer 100% seller financing over a 5-10 year period? We sure hope not! We make sure to understand the parties involved, observable risks and how they can be managed, risk tolerance, and conditions under which negotiations could be cancelled.
Due Diligence
Due diligence is conducted to provide the purchaser with trust. However, due diligence may also benefit the seller, as going through the rigorous financial examination may, in fact, reveal that the fair market value of the seller’s company is more than what was initially thought to be the case.
Due diligence can range from 60 – 120 days (the last 2-4 months of the transaction) depending on the industry and the preparedness of the business. A standard due diligence can contain over 300 detailed questions about the business services, operations, sales, accounting, IT, HR, environmental, insurance, etc. Due to the amount of documentation and time due diligence can take, we are not only your M&A advisor, but will probably become your therapist too.
Since due diligence is where most deals fall apart, we work extensively pre-due diligence to cover the basics and get your company and team prepared for what will arise.
Management Buyouts
Management buyouts (MBOs) are favored exit strategies by private businesses where the owners wish to retire. The financing required for an MBO is often quite substantial and is usually a combination of debt and equity that is derived from the buyers and the seller.
If the seller is financing the MBO, it can become risky due to poor management or business failure. We work with the seller to make sure that the management team get’s financing to avoid the seller being at risk.
Minority Equity Positions
A minority equity position occurs when you sell majority of your equity to a partner of the business. Reasons for this would be to create liquidity for the current owners, decrease the risk of all your net worth in the business going forward, and the ability to capture upside in the business moving forward. Usually the seller will remain in the business for a short period of time post-transaction to make sure a smooth transfer happens.
Typically, the buyer will be a strategic or private equity firm looking to buy more businesses like yours, and continuing to grow current revenue streams. If done successfully, this will allow all minority equity holders to participate in the upside equity growth. In M&A we call this the “second bite at the apple.”
Negotiations
Our Process
Start the Journey
A no-obligation & confidential conversation to learn more about your goals and to see if we are the right fit for you.
Map Out Your Plan
Customized for you, we design a path around your goals every step of the way.
Own Your Future
How you sell your business determines your legacy. Be ready for when that day comes.
Call or email use anytime to get started! We want to help you achieve your goals the right way