M&A Advisory

The sell-side process involves preparing your business for sale, identifying potential buyers, and negotiating the terms of the sale. It can be structured as a traditional auction, limited auction, or exclusive negotiation, depending on your goals.

The buy-side process includes identifying acquisition targets, preparing a valuation (synergistically and/or standalone), conducting due diligence, and negotiating the purchase terms. M&A advisors help buyers find suitable targets and navigate the complexities of the acquisition.

An earnout is a payment structure where the seller receives additional compensation based on the future performance of the business. This can help bridge valuation gaps between the buyer and seller. Note: SBA-financed transactions do not permit the use of earnout arrangements; however, there are mechanisms such as a contingent Seller Note that can be valuable alternatives.

The right time to sell depends on various factors, including market conditions, the financial health of your business, and your personal goals. Consulting with an M&A advisor can help you determine the optimal timing.

There are numerous alternatives which have different advantages and disadvantages. For owners who are most concerned about legacy, gifting to family, selling to management, and going ESOP are popular choices. Another option is to retain ownership and hire a president.  For those who want to maximize their payout, selling via an investment bank or to a competitor can be a great choice. Regardless of the path you take – you need skilled professionals in your corner. We can help you model out the various options, make the choice that’s best for you, and work towards structuring the transaction in a way that makes sense for you.

Sales of partnerships and sole proprietorships are always asset sales. For corporations (either C or S), generally buyers prefer asset sales and sellers prefer stock sales – this is mostly because an asset sale triggers tax at both the corporate and shareholder levels (for the seller) and gives a step-up in basis (for the buyer), whereas a stock sale triggers tax at the shareholder level only, but transfers the same basis to the buyer, which increases the buyer’s future tax liability. Some non-tax items to consider: stock sales generally transfer all contracts, agreements, insurance ratings, potential liabilities etc. while asset sales typically don’t. Asset sales are generally more complex and have higher transaction costs. In practice, most small-business transactions are structured as asset sales, so market prices have a built-in expectation of an asset sale.  If the deal is structured as a stock sale, the sale price would typically decrease to compensate for the transfer of some tax burden from the seller to the buyer. We can help you navigate both tax and non-tax implications and make sure the deal is structured and priced optimally for you.

Private equity firms can be very appealing to sellers, and for good reason – they’re experts at using synergies to maximize the profitability of your business, which allows them to often offer a better price than you can find elsewhere. At the same time, they’re experts at making deals, and they’ll make and structure the best deal they can – for themselves. We recommend always having knowledgeable professionals on your side to make sure you pick the right buyer and get the deal structured in a way that benefits you.

The duration of an M&A transaction can vary widely, typically ranging from several months to over a year, depending on the complexity of the deal and the readiness of both parties.

M&A advisors bring expertise, market knowledge, and negotiation skills to the table, helping you achieve the best possible outcome. For sellers, they can also manage the process, allowing you to focus on running your business. For buyers, they provide a professional second set of eyes, ensuring you’re not succumbed to tunnel vision.

Look for an advisor with experience in your industry, a strong track record, and a good cultural fit with your team. It’s important to feel comfortable and confident in their ability to represent and protect your interests.