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Sell a Business Insights
How important is the management team when selling a business?
January 20, 2025 / in Exit Planning, Sell a Business / by Al Statz
Selling a lower middle-market business involves various factors that can impact the price buyers are willing to pay, the cash amount they offer, and the likelihood of a successful sale. One of the most crucial elements is the strength and stability of the management team and key contributors within the organization. Continuity and Stability A strong management team is essential for ensuring continuity and stability, which are highly attractive to buyers. Investors are more …
M&A Glossary: No-Shop Clause
December 2, 2024 / in Exit Planning, Sell a Business / by Al Statz
Many M&A negotiations include a no-shop clause. This is a period of exclusivity when the seller cannot solicit offers from other parties. The due diligence process is expensive for buyers, so sellers sign these agreements as an act of good faith. Typically, a no-shop clause has a near-term expiration date and is only in effect for a couple of months (45—90 days). Buyers with a lot of leverage, and those working with inexperienced sellers trying …
Scaling for Sale: Growth Strategies that Double as Exit Plans
December 2, 2024 / in Business Strategy, Exit Planning, Sell a Business / by Al Statz
As a business owner, you’re likely consumed with the daily challenges of building and growing your business. The question of selling might seem like a distant concern—something to worry about years down the road. But the reality is that planning your exit and growing your business are two sides of the same coin. We’ve been conditioned to think about entrepreneurship in distinct phases: First, you build; then, you grow; finally, you sell or pass it …
Goodwill hunting: How to build and finance this intangible asset
December 2, 2024 / in Business Strategy, Business Valuation, Sell a Business / by Al Statz
When it comes to selling a business, the term “goodwill” often arises. But what exactly is goodwill, and how does it impact the mergers and acquisitions (M&A) process? Goodwill is the value of a business that exceeds its tangible assets. It arises when a company is sold for more than the worth of its physical assets such as equipment, vehicles and inventory. Most successful companies have some level of goodwill, which is tied to cash …
Exit Strategies Group Advises Afineol in Sale to ITS
November 12, 2024 / in News, Sell a Business / by Roy Martinez
Exit Strategies Group recently served as financial advisor to the owners of Afineol IT Consulting, a Sacramento area-based managed IT service provider (MSP), on their sale to Intelligent Technical Solutions (ITS), a Tower Arch Capital portfolio company. The acquisition strengthens ITS’ geographic footprint and technical leadership position in the Sacramento region. Terms of the transaction were not disclosed. Afineol’s founder, Michael Strong, said, “We were looking for a strategic partner to build on Afineol’s decades …
From the M&A Glossary: Search Fund
October 10, 2024 / in Exit Planning, Sell a Business / by Exit Strategies
A search fund is an investment vehicle through which an entrepreneur raises capital from investors to fund the search for and eventually the acquisition of a privately-held company. The search fund model allows the entrepreneur to collect a salary while they search for a suitable target company and negotiate a letter of intent and perform due diligence. Once a target company is acquired, the entrepreneur usually takes an active role in managing and growing the business, …
Equity Rollover Benefits
October 8, 2024 / in Exit Planning, Sell a Business / by Exit Strategies
An equity rollover occurs when a business owner sells their company but chooses to reinvest, or “roll over,” a portion of the proceeds into the newly acquired business. An equity rollover allows a shareholder to benefit from any future growth and value creation. In a bolt-on acquisition or consolidation, the owner would likely receive equity in a larger, more diverse and less risky business enterprise. The benefits of an equity rollover for the shareholder include: …
From the M&A Glossary: Caps and Baskets
September 20, 2024 / in Acquire a Business, Sell a Business / by Exit Strategies
Indemnity caps and baskets are key terms in business purchase agreements that relate to the seller’s indemnification obligations for any breaches of representations and warranties made by the seller. Cap The cap is the maximum amount of damages that the seller will be obligated to pay to the buyer for breaches of reps and warranties. For example, if the purchase price is $40 million and the cap is set at 10%, the seller’s maximum indemnification …
Timing the Sale of Your Founder-Owned Enterprise
September 8, 2024 / in Exit Planning, Sell a Business / by Exit Strategies
For founder- and family-owned businesses, deciding to sell is much more than a financial decision. Its a pivotal moment that marks the culmination of years, often decades, of dedication and hard work. The timing decision involves personal and market factors that can significantly influence the outcome of a sale. Understanding the right moment to sell requires an appreciation of the market environment, the business’s lifecycle, and the personal readiness of the owners. Market Conditions The …
Add-On Acquisitions Continue Popularity
August 25, 2024 / in Exit Planning, Sell a Business / by Exit Strategies
PE firms are increasingly using strategic “add-on” (aka bolt-on) acquisitions to consolidate fragmented industries, particularly in sectors like healthcare and business services, where operational efficiencies and market share gains are achievable. This approach to growth allows firms to create more valuable and competitive entities more quickly than organic growth, usually with lower business and financial risk. These transactions often require less capital and can be financed through existing cash flows or smaller debt tranches, thus …
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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