Selling a mid-market business requires a disciplined, methodical approach to achieve a successful outcome. The process relies on industry knowledge, established networks, and direct outreach to decision makers at potential buyer organisations. For specialised businesses, where buyers are typically other medium-sized companies, the focus is on identifying and targeting specific buyers rather than using mass-market […]
Address Hard Issues Early; Transparency is Critical
In every transaction, critical issues arise beyond merely agreeing on the price. Although delaying tough conversations may seem convenient in the short term, it often results in frustration, loss of trust, wasted time, missed opportunities, terminated deals and costs. Successful dealmakers understand that obstacles are an inherent part of any deal, whether anticipated or unforeseen. […]
Earnouts – Why an Earnout Pros and Cons
Earnouts are effective tools for closing a valuation gap, to incentivise sellers to further grow profitability post-acquisition or for buyers manage acquisition risk. Earnouts are more commonly employed in higher risk smaller and middle-market transactions where companies have lower “critical mass” (revenue, assets, staff) than larger businesses. Essentially, earnouts enable parties to agree to disagree […]
Why Deals Sometimes Fall Apart
In the fascinating world of business sales, we explore some common reasons around trust and why some deals don’t reach the finish line even after a letter of intent has been agreed. Last-Minute Price Haggling, Sellers Change of Heart: Scenario: Having agreed to a good deal, the seller suddenly seeks a higher price; sometimes based […]
M&A Insight: The Timeline for Selling a Midsize Business
When it comes to selling a midsize business, the journey from “listing” (going-live) to closing can vary significantly. On average, the process typically spans 9 to 12 months, but this is not set in stone. The timeline is influenced by a multitude of factors, including market conditions, the business’s financial health, and the readiness of […]
Business Valuation and Pricing – Balancing Art and Science
Pricing a mid-size business is akin to blending art and science, with a dash of subjectivity. It involves striking a delicate balance between risk and potential return, all while considering the perspective of a buyer. Below we explore the key aspects of this process. Risk and Return Balancing When determining the price of a business, […]
Business Sale Marketing Processes
Business sales process and marketing takes various forms depending on the type of business, industry, market, financial health and the owner’s preferences. For mid-size businesses, the sale process falls into three typical categories: a negotiated sale, private auction or public auction. A negotiated sale is when only one buyer is in a discussion with the […]
Letter of Intent (LOI) must be Thorough
The importance of executing Letters of Intent (LOIs) that thoroughly address all relevant business terms cannot be overstated. The LOI should not be an invitation to further negotiate issues it does not explicitly cover. Rather, it should be the final culmination of the negotiation of business terms, leaving no room for ambiguity particularly in the […]
The Halo Effect
…and the Eight Other Business Delusions That Deceive Managers. Phil Rosenzweig Free Press 2014 For a change, this month’s M&A insight is a book review. A book review that confirms the reservations that many successful managers and owners have about famous bestsellers such as Tom Peters’ “In Search of Excellence” and Jim Collins’ “Good to Great“. […]
Real Time Instruments’ new investor RCF Jolimont II to propel growth.
10 March 2021 – Australian company The Realtime Group Ltd (Realtime), advised by Optimal Business Advisory, announced today it has completed the sale of a majority stake in the company to RCF Jolimont Mining Innovation Fund II L.P. (RCF Jolimont II). RCF Jolimont II is a global, specialist investor in high-growth mining equipment, technology, and […]