Virtually every M&A deal has a buyer exclusivity period meaning that the seller agrees to discontinue marketing and to stop actively looking for buyers. This is also known as “no shop” period during which the seller agrees to exclusively court the selected buyer preventing their soliciting, negotiating or entering into agreements with other buyers. There […]
Business Sale Price Multiples
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 […]
When to Sell a Business, an Owners Dillema?
“When to sell a business” is a question often on the mind of business owners. The quick answer from a veteran owner of many businesses is “the best time to sell is when nobody wants to sell”. When business is good, owners tend to hold on to them despite their being many buyers with strong […]
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 […]
M&A Success Fees Explained – (Sell-Side)
In order to maximize transaction value, Middle Market sellers and their M&A advisors know that it is in their mutual best interest to reasonably compensate advisors, this typically includes M&A success fees. Where M&A success fees and retainer fees are too low, good advisors will generally walk away from the opportunity with the seller probably […]
M&A Intermediary Services Agreement Explained (Sell-Side)
For privately owned middle market companies the sale of a business is often complex, influenced by the type of business, the market, the buyer, deal structure and potential liabilities. Most deals are unique regarding price and price structure, earnouts, escrows, employment contracts for owners, the owners’ personal tax position, intellectual property ownership, business properties and […]