Business sale price multiples are functions of “factors” such as earnings, EBITDA, EBIT, revenue or some other multiplier, neither of which are “set in stone” and are not precise. Factors and multiples vary with every business sale depending on many issues and the structure of each unique business deal. In pricing a business using EBITDA […]
M&A Buy-Side Fees, Risks and Challenges
For M&A Advisors, buy-side representation is inherently more problematic and risky than representing a sell-side client. On the sell-side, an advisor is representing something other people want (always an advantage). When representing the buy-side, we are trying to acquire something someone else owns and perhaps others are interested in too, obviously not as good a negotiating […]
Anyone Can Do M&A – Right?
A middle market business owner who chooses to represent himself in the sale of his own business will never know the value of the offer never received, or the deal terms that never were negotiated or the financial sum he left on the table. Why do owners shun M&A Advisor or engage inadequate inexperienced professional […]
Confidentiality and M&A – Managing Information Disclosure
Typical confidentiality stages in an M&A Sale Program are defined by the phase of the sale process. Confidentiality and M&A, the managing of confidential information and who can access company confidential information is a key activity managed by the M&A advisor as part of the M&A sale process. Key documents provided to prospective buyers in […]
Confidentiality Agreement and M&A
Confidentiality is of key importance in deal making and although often considered as a “side-bar” issue, is a foundation to a successful M&A process. When managing a competitive sale process, managing confidentiality allows sellers to maintain negotiating leverage while maximising deal value and terms while ensuring no future damage by unsuccessful buyers. M&A deals […]
What is My Business Worth?
Are you preparing for a business sale? A key question you may ask is “what is my business worth“? The answer, which you probably don’t want to hear is “it depends”! Several factors influence the price of a business. “Environmental” Influences “Environmental” influences impacting business values are of both an internal and external nature. External environment includes the type of buyer, […]
Preparing for a Business Sale – Key Elements
Are you preparing for a business sale? Strategic buyers are sitting with a record amount of cash on their balance sheets. As organic growth has been difficult to achieve, strategic buyers have been very active in the acquisition market. Private equity buyers who have raised many millions of dollars are seeking acquisitions. They are the major players […]
Normalised EBITDA to Increase Business Sale Value
Preparing Normalised EBITDA financials is a process undertaken in preparation of a business sale to gain a better understanding of post sale cash flows. This is done by excluding abnormal, non-recurring and one-off events and adding back costs which would be incurred in a “business as usual”. Items to be “normalised” or “adjusted” can often be contentious and a conservative approach […]
NDA Minimum Requirements for Mid-Size Business Sales
NDA minimum requirements, non-disclosure agreements, confidentiality agreements or confidentiality deed minimum requirements are widely used in all business sale transactions to protect the interests of both the buyer and seller. Middle market and large business sale transactions tend to have more detailed NDA’s than smaller businesses and for very good reason. Naturally any buyer would want to ensure […]
Comparing EBITDA Multiples and PE Ratios
Clients may directly compare the PE ratio (price/earnings ratio) of listed companies to an EBITDA multiple (multiple of earnings before interest tax depreciation and amortisation) of a private company to establish an enterprise value. This is done to understand relative values due to the known market value of a similar listed business. This is often done without understanding that comparing […]