By Andy Stockett

Your company has “hit the radar screen” of a larger competitor, a company seeking an avenue into your industry, or a Private Equity Group (PEG) looking for a platform acquisition that allows it to put to work money raised from investors.  Or maybe you have received a letter from a firm indicating that it has buyers for your company.  What do you do?

If you have put as much effort into planning your exit from your business as you have in planning your personal estate, then you are prepared for these inquiries and are in a position to respond to, and even take advantage of, the situation.  Of course an exit plan has to be fluid—specific factors will determine strategy and tactics—but with the large amount of cash on the balance sheet of corporate America and approximately $490 BILLION waiting to be invested by PEGs, business owners would be well advised to at least consider what a transaction would look like.  And this means determining in advance what it would take to ensure a favorable outcome for owners, management, and other stakeholders.

Selling A Business:                                                          View PDF

By Andy Stockett

According to the Business Reference Guide, only one of every four potential transactions involving family owned businesses actually closes.  This can be because of broad market conditions or the fact that the unlucky companies are simply not “saleable”. More likely it is due to one or more of the following reasons:

• Lack of preparation for the process
• Lack of management depth
• Revenues concentrated with one customer
• Poorly positioned to buyers
• Unorganized or incomplete information provided to buyers
• Contacted the wrong type of buyers
• Contacted too few buyers

Business owners often wonder whether it’s necessary to hire an intermediary in order to sell their business or to source capital for growth. Although there are a number of reasons for hiring an intermediary, the most compelling and quantifiable reason is dollars and cents—the amount of money that will be changing hands.

SELLING IN 2011? EXPECT HIGHER TAXES                 View PDF

By Chris Rowe

This article contains general information and is not intended to be a specific analysis of the tax issues that could affect an individual’s specific circumstances.

In 2011, changes in capital gains and ordinary income tax rates will significantly affect the proceeds from the sale of a business.  The Bush tax cuts are to sunset in 2011 and the recently passed healthcare law will also implement new taxes in coming years.  Business owners that are considering selling in the next two to three years may want to consider selling in 2010 in order to maximize their after-tax proceeds.  Leonard Tannenbaum of Fifth Street Capital was quoted on May 6, 2010 at a large private equity conference, “You may see the biggest fourth quarter [of dealmaking] in history; there is going to be a massive tax hike coming.”

A FINANCIAL QUARTERBACK                                     View PDF

By Dewey Hammond

"A billion here, a billion there, and pretty soon you're talking about real money." While the money may not be quite that big in a middle market M&A transaction, the late Senator Everett Dirksen’s famous line makes a point that every business owner considering selling his or her business should understand. Hiring an experienced financial advisor or investment banker offers many benefits, including reducing risk, saving time for management, and maintaining confidentiality. However, the business owner's main motive is usually to maximize value.