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California’s AB5 Law May Impact Small Business Values
October 2, 2019 / in Business Valuation, Exit Planning, Sell a Business / by Adam Wiskind
Assembly Bill 5 (AB5), signed into law last month by governor Gavin Newsom, will impact the valuation of many small businesses in California that have grown to depend on independent contractors. For impacted owners intending to sell in the near term, this new law may require a change of plan. The new law, which goes into effect on January 1, 2020, creates an explicit three-part test for whether a worker can be classified as an independent …
Ten Factors that Affect the Cost of a Business Valuation
September 25, 2019 / in Business Valuation / by Joe Orlando
In the world of pricing, there are simple models (e.g. cost plus a profit markup) and complex models (e.g. dynamic pricing based on real time supply and demand algorithms ). If you have ever purchased an airline ticket online, you’ve seen how a complex model makes prices impossible to decipher. Fortunately, we can offer greater transparency and consistency on business valuation pricing! Like most professional service pricing models, business valuation pricing is largely a function …
Why business transactions don’t close: Signs of a flaky Buyer/Seller
September 17, 2019 / in Sell a Business / by Exit Strategies
Selling or buying a business is time consuming, emotional and stressful, and having a deal fall through can be demoralizing. But the reality is that only a fraction of potential business acquisitions actually close. Many deals never really get off the ground. Even deals that make it to the letter of intent (LOI) phase often don’t close. When it comes to selling or buying, you really need to find out if the other party is …
Understanding the Value of Intangible Assets
September 6, 2019 / in Business Valuation, Exit Planning / by Joe Orlando
As a follow-up to our recent post on profiting from intangible assets in a business sale, this post introduces intangible asset valuation. As our last post outlined, “intangible assets are identifiable, non-physical in nature. They are something you can describe, document … and, most importantly, transfer.” Once identified, there are several ways to value intangible assets. I’ll discuss a common approach called the “with and without” method, using a simple and recognizable case study. Let’s …
Exit Strategies Advises Olympus Controls on Sale to Applied
August 26, 2019 / in Exit Planning, News, Sell a Business / by Al Statz
PORTLAND, OR (August 22, 2019) — Exit Strategies Group, Inc. is pleased to announce that Olympus Controls Corp. has been acquired by Applied Industrial Technologies. We represented Olympus and its shareholders as their exclusive M&A advisor. Established in 1998, Olympus Controls is a leading distributor of world-class machine automation products focused on assemblies and engineered solutions. Olympus specializes in motion control, robotics, machine vision, sensor and IIOT technologies, and is one of the largest and …
Profit from Intangible Assets in a Business Sale
August 10, 2019 / in Business Strategy, Exit Planning, Sell a Business / by Al Statz
The sale of a business includes intangible assets. This article explains what intangible assets are and how articulating, supporting and protecting them enhances business sale outcomes. Let’s get started. What is an Intangible Asset? Intangible assets are things that are non-physical in nature that you can identify, describe, document (e.g. a contract, list, logo, drawing or schematic) and, most importantly, transfer. Intellectual property is an example of an intangible asset. The Financial Accounting Standards Board …
Phase I Environmental Assessment in M&A Transactions
August 6, 2019 / in Exit Planning, Sell a Business / by Al Statz
A Phase I environmental site assessment is commonly required by buyers and lenders in merger and acquisition transactions that include commercial real estate. One may even be called for when the target company (seller) uses or stores hazardous materials at a leased facility. Sellers are generally rewarded for conducting a Phase I assessment before taking a deal to the marketplace. Understanding environmental risk allows sellers to argue for a higher price and increases the likelihood …
Roundup of Recent Sale Transactions
July 19, 2019 / in Exit Planning, News, Sell a Business / by Al Statz
Sitting down and writing quality articles on business valuation, exit planning, mergers and acquisition strategy has taken a back seat this year, thanks to a strong M&A market. In this post I will recap many of the transactions for which Exit Strategies (ESGI) provided sell-side advisory services during the first half of 2019. I haven’t included deals that we were asked not to announce. Nor have I included the internal buy-sell transactions, management buyouts and …
How a Discount for Lack of Marketability (DLOM) is Determined
July 14, 2019 / in Business Valuation / by Joe Orlando
In a prior chapter of my professional career, I focused on equity security valuations for tax and financial reporting purposes. I led a team of valuation experts who determined the strike price of options granted to employees of up and coming technology companies on their way to IPO. For most, that strike price represents the basis (or cost) of an employee’s future wealth (and tax bill). In simple terms, the valuation of these shares in …
The Sale of a Business May Actually Excite Employees
June 20, 2019 / in Sell a Business / by Exit Strategies
Many sellers worry that employees might “hit the panic button” when they learn that a business is up for sale. Yet, in a recent article from mergers and acquisitions specialist Barbara Taylor entitled, “Selling Your Business? 3 Reasons Why Your Employees Will Be Thrilled,” Taylor brings up some thought-provoking points on why employees might actually be glad to hear this news. Let’s take a closer look at the three reasons that Taylor believes employees might …
Exit Strategies Group, Inc. is a leading provider of business sales and acquisitions, business valuations, and exit planning services for family owned and closely-held companies since 2002.
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