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Business owners must prepare for succession

brian@transactint.com (Brian J Reilly) — Mon, 21 Jun 2010 15:31:00 GMT

Business owners must prepare for succession News and Observer Sunday June 19, 2010 It's critical that every family-owned business have an exit strategy. The typical owner rarely wants to give up the controlling reins, nor does he want to face his own mortality. As a result, a family retail, service or manufacturing business often creates an uncertain and risky future. Instead of burying their heads in the sand, owners should give equity positions in the company to younger managers so they are in the position to control the business when the boss gets sick, ...

How the New Wealth Taxes Will Hit You

brian@transactint.com (Brian J Reilly) — Mon, 14 Jun 2010 19:28:33 GMT

How the New Wealth Taxes Will Hit You by Laura Sanders Monday, June 14, 2010 provided by The health-care bill that Congress passed in March contained two surprising new taxes to help pay for the changes: an extra 0.9% levy on wages for couples earning more than $250,000 ($200,000 for singles) and a new 3.8% tax on investment income on those same people (technically, people with "adjusted gross incomes" above those amounts). Each tax signals a radical change in policy. For ...

M&A Advisors and Intermediaries Will Hate this Blog, Some Sellers Don’t Have to Pay Brokerage Fees

brian@transactint.com (Brian J Reilly) — Thu, 03 Jun 2010 18:49:34 GMT

If you own a private business with annual sales in excess of $20 million, you have been contacted by one of the national Mergers & Acquisitions firms who have lead you to believe your business was worth twice its actual value. In addition, maybe they got you to stroke a check for $15,000-$40,000 for a valuation which would be credited against the brokerage fee when they sold your business. I’m sure you have even received a similar pitch from a “financial banker” (a business broker with a series 7 license) or you have even been contacted by a ...

What’s That Business Worth?

brian@transactint.com (Brian J Reilly) — Thu, 29 Oct 2009 18:52:00 GMT

What’s That Business Worth Fair Pricing for Buyers and Sellers Whether you are planning to buy an existing business or expect to sell one you currently own, one of the biggest challenges involves deciding on a fair price. As the buyer, if you pay too much, you risk damaging future profit by digging too deep a hole early in your ownership cycle. As the seller, asking too little unfairly discounts the investments you made that created a successful business. Additionally, an improperly priced company sends the wrong message to potential buyers. ...

Know When to Walk Away, Know When to Run

brian@transactint.com (Brian J Reilly) — Fri, 05 Jun 2009 14:06:00 GMT

We talk to owners constantly who are ready to exit their businesses but think now is the wrong time because of the recession. We even have owners who received great offers for their businesses that assume the offer is depressed because of the current economy and reject the bid. In some of these cases, the offer and deal structure is far superior to the one they received before the downturn. See our earlier blog entry for more information 2009 is a Horrible Time to Sell My Business, Isn't it? To these two groups of owners I would like to ...

Let's Play "Am I Diversified?" Private Business Owners You Lose

brian@transactint.com (Brian J Reilly) — Tue, 12 May 2009 19:11:00 GMT

Mad Money with Jim Cramer is one of CNBC's biggest hits. Every Thursday viewers call in to play "Am I Divesified?" they give Jim their 5 top stock holdings and he tells them based on business segment and specculative verses big cap, whether thier portfolio is diversified or not. Many Private Business owners may not realize they would loose this game miserably. We have found most private business owners have over 80% of their net worth tied up in their business and its assets. This means at least 4 of their five largest positions are tied up in one stock, ...

Zen and the Art of Creating Competition in Merger and Acquisition Deals

brian@transactint.com (Brian J Reilly) — Sun, 03 May 2009 14:38:00 GMT

Top Merger and Acquisition Intermediaries perform four very valuable functions when representing an owner selling his or her .company. First, they develop a defensible valuation based on EBITDA, Add-backs and Multiples. Second, the intermediary confidentially markets the business to a wide spectrum of potential acquirers. Third, they create competition to insure the owner receives the best possible price for their business. And finally, the intermediary negotiates a deal structure so the owner can keep the largest percentage of the hard fought proceeds after taxes. In my experience, Creating Competition is the most important step of the process and ...

2009 Is A Horrible Time To Sell My Business-You Could Be Horribly Wrong

brian@transactint.com (Brian J Reilly) — Thu, 23 Apr 2009 17:35:00 GMT

If you own a business you presumably have a working knowledge of business basics such as: supply and demand, supply chain dynamics, availability of capital, and valuation. As a Mergers and Acquisition Intermediary, I like to think I know how they apply to my business and how they can have a huge impact recapitalizing or exiting your business. I talk to business owners and groups who seek to buy established businesses every day. In this blog I will focus on the lower Middle Market businesses with annual revenues of $5-$75 million, but these concepts apply to larger and smaller ...

Flat Performance is the New Growth

brian@transactint.com (Brian J Reilly) — Thu, 09 Apr 2009 16:23:00 GMT

I have spoken with several potential acquirers recently about a business we are marketing that projects 2009 to a flat year. This business is an industrial manufacturer and is being evaluated by strategic acquirers. When I tell potential acquirers that business is flat and we believe it is going to stay that way in 2009, they are all somewhat amazed by this performance. One potential acquirer told me "Flat is the new Growth." These acquirers all hold a variety of other industrial companies that are down 15-25% off 2007-2008 levels, which seems to be the ...

Is now the right time to sell my company?

brian@transactint.com (Brian J Reilly) — Tue, 07 Apr 2009 20:05:00 GMT

We have been receiving unprecedented calls form Private Equity Groups (PEGs) seeking deals in March and early April 2009. There appears to be a real shortage of good companies on the market and plenty of cash on the sidelines looking to be deployed. Many of the PEGs we speak to have recently raised capital form private individuals and are looking to make acquisitions with out any bank or mezzanine financing. We even have seen private companies raise capital through private placements avoiding the necessity of involving a bank to an acquisition. ...

Dealing with PEGs

brian@transactint.com (Brian J Reilly) — Tue, 12 Aug 2008 20:56:00 GMT

PEG deals are far more complex than those involving individual or strategic acquirers. Given the intricacies of the deal, and to combat the experience of the PEG, business owners need to have their own advocates (professional M&A Advisers) their own to ensure that the PEG does not take advantage of the business owner. Some of the things that business owners need to prepare for when dealing with a PEG:

-Clean up the books and have recasted financial statements developed. Clean books open the field of potential buyers, increase multiples, and maximize the value of a ...

What to do with an unsolicited offer for your business??

david@transactint.com (David Boykin) — Tue, 05 Aug 2008 02:14:00 GMT

What will you do as a business owner if you find yourself in the position of entertaining an unsolicited offer from a Private Equity Group or Corporate Acquirer? This phenomenon is happening more frequently than you may think. Due to the instability of the stock market, more and more groups and companies are searching for businesses to acquire. If you are considering selling your business, it’s a great time to execute your exit plan…even in this economy!!