Frequently Asked Questions

The M&A process can be a complicated one and oftentimes leads to many questions. For that reason, we have provided a list of the most common questions and answers below:

  • How much is my company worth?

    The easy answer is it depends. Most companies are valued on a multiple of EBITDA (Earnings Before Interest Taxes Depreciation Amortization). Multiples vary, first, by industry and company size (Enterprise Value). Other factors affecting valuation and marketability are profitability, geographic reach, customer mix, and product/service differentiation.

  • What are the upfront fees? Are there any ongoing costs or fees associated with the sale?

    By rule, we do not charge hourly fees or a retainer for our efforts when managing transactions. We believe it is essential to align our success with the success of our clients and therefore get paid when you do. That stated, the only costs incurred before the transaction is closed are hard costs associated with the project (i.e. travel expenses, third-party cost for material produced, etc.) *Costs are billed monthly with supporting documentation.

  • How are the proceeds paid out?

    Every transaction is different based on the goals and requirements of the client. Very few transactions pay 100% of the proceeds on the day of closing. A small percentage of the proceeds is often held back for a short period after the transaction.

  • How long does the entire process normally take?

    The average process takes 9-12 months. We have closed transactions in less than 60 days, while others have taken years. It depends on a variety of factors: the current market for your industry, the timeliness in gathering material on the front end, the accessibility of ownership early in the process, the overall economic environment, etc.

  • What will the tax implications be?

    Proactive tax planning is critical. We encourage this discussion early on in the process as many strategies are available if addressed ahead of certain milestones. We will always encourage you to speak with your CPA and/or legal counsel about those strategies and are happy to participate in those discussions as needed.

  • Am I able to use my own CPA or lawyer during the process?

    Yes. It is essential for you to have competent tax and legal advice throughout the process. We work hard to collaborate with your advisors to ensure the best possible outcome for you. Concerning legal counsel, it is vital they have transaction experience.

  • Can I exclude certain assets from the transaction?

    Yes. Often, closely-held businesses hold personal assets on the company’s balance sheet. It is common for those to be excluded and will typically be addressed during the due diligence period.

  • What if I do not have enough time to operate my business and engage in a transaction?

    Our job is to take that pressure off of you. Without a doubt, an owner’s input is required throughout the process. The time investment will be necessary but we can take +90% of the headache away. The preparation and deal activity will take place behind the scenes so you can stay focused on your day-to-day operations.

  • What happens to my employees after the sale is complete?

    Employees will, most likely, continue to play their roles in the company just as they did before. The strength of a company and its ability to attract investment typically lies in its people. Any investor can buy equipment or open a new location but without the right people in place, many businesses simply are not marketable. An acquirer is investing in your company and wants to ensure their investment is secure. The best way to do this is with happy employees.

  • Should I expect significant changes to operations once the sale is complete?

    Change is inevitable. However, investors will look for ways to enhance the operation after it is acquired, not destroy it. Investors buy businesses for a variety of reasons: geographic expansion, financial opportunity, product expansion, customer expansion, etc. Creating upheaval in an organization is never the goal.

  • What are my responsibilities and obligations once the sale is complete?

    An owner’s responsibilities post-close can vary based on current involvement in day-to-day operations or, in some cases, how the transaction is structured. This may also depend on the strength of leadership within the company. If there is a clear path to utilize an existing manager to fill the leadership role, you may be able to limit your interactions with day-to-day matters or step away altogether.

  • Do I get to keep the cash on my balance sheet once the sale closes?

    Almost every transaction is done on a cash-free, debt-free basis. This means that any cash on the balance sheet is yours to keep. At the same time, all of the debt is your responsibility to pay off at closing, with proceeds, or prior to the transaction.

  • How are confidentiality and privacy maintained regarding my employees, customers, and vendors during the process?

    Confidentiality is often the first concern when working through a transaction. We strategize with management to ensure strict confidentiality throughout the process.