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“Closing of the Books” to Allocate Income on S-Corp Ownership Change
May 30, 2019 / in Buy-Sell Agreements / by Al Statz
As brokers and appraisers of closely-held and family-owned businesses, we work with a lot of S-Corporations. When S-Corp shares transfer subject to a buy-sell agreement, the valuation date, trigger date and transaction date rarely fall conveniently at the end of a year. That’s no problem for valuation experts. We can determine value as of any date. But what’s the fairest way to allocate taxable income among S-Corporation shareholders in a year in which ownership changes? …
Steps in a Management Buyout
May 2, 2019 / in Exit Planning, Sell a Business / by Al Statz
As a friend of Exit Strategies you know us as M&A brokers and appraisers, but you may not know that we advise on management buyouts. By management buyout (MBO) I mean selling a company or business unit to managers and key employees using a combination of equity and debt. The assets and cash flows of the company are used to finance most of the purchase price, with the equity portion supplied by management or a …
Joe Orlando Joins Exit Strategies; Portland Office Open
March 31, 2019 / in Business Valuation, News / by Al Statz
Exit Strategies Group, Inc. (ESGI) is pleased to announce that Joe Orlando, ASA, has joined us as Vice President of Valuation Services. Joe will perform the full range of business valuation services for our clients and provide technical leadership to our team of accredited valuation experts. Over the past 15 years Joe has valued hundreds of early to late stage companies in various industries. Some of his focus areas have been technology (software, ecommerce and …
Financial exit planning, Is your business ready?
March 13, 2019 / in Business Valuation, Exit Planning, Sell a Business / by Exit Strategies
I recently had a client looking to sell their medical supply business and retire. I worked with management to pull together all the documentation and financials needed, and conducted conduct a probable selling price analysis. With report in hand I met with our clients to review the results and plan a go-to-market strategy. Unfortunately, the probable selling price fell slightly short of what the client needed to retire (after taxes). We identified excessive inventory as one …
Exit Strategies Group Advises Axis on Sale to Motion Industries
March 5, 2019 / in News, Sell a Business / by Al Statz
BOSTON, MA (March 1, 2019) – Transaction advisory firm Exit Strategies Group served as exclusive M&A advisor to Axis of New England and New York on its successful sale to Motion Industries, Inc., a subsidiary of Genuine Parts Company (NYSE: GPC). Axis, with facilities in Danvers Massachusetts and Rochester New York, is a leading provider of advanced industrial automation products and engineered systems, specializing in robotics, motion controls, machine vision, sensors and IIOT technologies. Axis, …
Ken McCauley Joins Exit Strategies as Senior Valuation Analyst
February 20, 2019 / in Business Valuation, News / by Al Statz
Exit Strategies Group is pleased to announce that Ken McCauley, CPA, ABV, has joined us a Senior Business Appraiser in our North San Francisco Bay Area California office. Ken will provide a broad range of business valuation services for our clients. He has been appraising businesses since 2010, including wineries, medical and professional services, software, retail, restaurants, manufacturing, construction, and businesses in other sectors. Prior to joining Exit Strategies, Ken was a partner in AL Nella …
Understanding Seller’s Discretionary Earnings
February 15, 2019 / in Business Valuation / by Exit Strategies
If you have acquired or sold a small company, or had one appraised, you’ve probably heard the term “Seller’s Discretionary Earnings”. Or you may be thinking “Earnings are discretionary? My earnings aren’t discretionary at all!” Let’s examine this often-misunderstood term, and how it compares to EBITDA, another common earnings measure. What is Seller’s Discretionary Earnings? Seller’s Discretionary Earnings (“SDE”) is a calculation of the total financial benefit that a single full time owner-operator would derive …
Manage Working Capital to Increase Business Value
February 8, 2019 / in Business Valuation, Exit Planning / by Jim Leonhard
As you likely know, working capital equals current assets minus current liabilities. Companies that have a high level of cash tied up in current assets (primarily cash, accounts receivable, and inventory) without similar levels of current liabilities are not as attractive as those who tightly manage their working capital. Buyers are often leery of businesses that require high working capital to sales ratios because as sales grow the company must continually invest more cash in …
Business sale planning: Three lessons from Shark Tank
February 1, 2019 / in Exit Planning, Sell a Business / by Louis Cionci
As an M&A advisor having participated in the sale of businesses ranging in price from $500 thousand to $100 million, I enjoy watching ABC’s Shark Tank. On the show, entrepreneurs pitch their businesses to a panel of five investors (“sharks”) who then decide whether or not to invest. Today I want to pass along three key takeaways from Shark Tank for every business owner who plans to sell their business some day. 1. The business valuation …
How Does an M&A Auction Process Work?
January 19, 2019 / in Sell a Business / by Al Statz
This article covers the basics of an M&A auction process for those of you considering selling your company. As M&A advisors serving the lower middle market, we use auctions to maximize price and terms for seller clients. An auction is a type of structured sale process that involves competitive bidding. Auctions are incredibly effective when done properly, but are a ton of work and involve strategy and nuance. They are most effective in a strong …
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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