Blog
Buying a company
10 Reasons to Consider Growth Through Acquisition…
Many entrepreneurs rely on organic growth to increase their sales. Here are 10 good reasons why you should consider an acquisition... COVID was a contributing factor, many entrepreneurs finally decided it was time - there's more choice for buyers! Having a larger...
10 Reasons to Consider Growth Through Acquisition…
Many entrepreneurs rely on organic growth to increase their sales. Here are 10 good reasons why you should consider an acquisition... COVID was a contributing factor, many entrepreneurs finally decided it was time - there's more choice for buyers! Having a...
Thinking It Through
We're seeing a trend that is affecting many entrepreneurs in various industries. Sometimes an entrepreneur finds himself too young to retire, the funds required to buy him out are too high, or his company is not yet at its peak. Sometimes, there's another company in...
Some Green Flags When Acquiring
Strategy It all starts with why: what are we aiming for as entrepreneurs? What business goal do we want to achieve... too often we hear "I want to buy, because I can afford it and it will bring me change". When we get inquiries with industry, business model, target...
Some Red Flags During an Acquisition
When the "why" isn't aligned When the primary motivation isn't clear, it's time to ask questions. We've seen personal objectives supplant corporate ones - not always a good indication if a family member wants to buy at any price for entertainment - so the analysis may...
Buyer, How to Communicate What You’re Looking For
Are you a corporate buyer? - How do you communicate what you're looking for to the professionals who can help you at this stage? The down payment - the one that's real and available in the next 3 months in cash. We're all professionals, and we know all about...
A Buy-Side Mandate… Why?
Many successful entrepreneurs are looking for accelerated growth in sales and profits. One of the most attractive options is growth through acquisition. Among the advantages of acquisition are the following: Buyers often look for companies of a certain size; if YOUR...
INDIVIDUAL – Buy a business to buy a job!
Many entrepreneurs decide to buy a company to buy or create their own job. There are several factors to consider if you want to conclude a successful transaction. The business sector - Do you know the business sector? Are you prepared to invest long hours in...
Selling your business
What Are My Exit Strategies?
Entrepreneurs often ask themselves what their alternatives are for “exiting” their business… Do I already have a succession plan? Is the plan already in place? Family members? Members of the management committee? An outside sale? Do I know the market value of my...
My Business Should Always Be Ready to Sell!
Many entrepreneurs tell themselves they'll have plenty of time to prepare their business for sale when the time comes... wrong! Selling a business goes beyond financial and tax considerations. Several questions arise: As an entrepreneur, am I mentally prepared to sell...
Mistakes To Avoid…
Most entrepreneurs are currently facing a number of major challenges, such as labor shortages, irregular supply and rising production costs, to name a few. In this context of uncertainty, maintaining or increasing the value of one's business is becoming increasingly...
How Long Will It Take to Sell My Business?
It's a question that arises, let's start by saying that time is money... the more we are in a hurry, whatever the causes, the less we normally sell. We sold and delivered a manufacturer in 2 months, another in 5 months – from start to finish – and this, because the...
Proceeding Alone or With a Broker
It all depends on the context and your skills. Normally, a traditional entrepreneur sells only one company in his lifetime. The entrepreneur is in the a best position to manage their business. They should subcontract the sales process and surround themselves with...
Sales preparation
Why And How to Prepare for The Sale of Your Business?
First, you should know that a business should always be “in order”, that is to say: ready for sale! Indeed, you never know when a strategic buyer may come forward and present an attractive offer; more than 70% of transactions are made with companies that are not on...
The Steps to Consider Preparing for The Sale
We have listed the steps we recommend: Cash management – to be eligible for the capital gain, the business must have less than 50% of its value in non-performing assets (cash, advances, etc.) during the two years preceding a sale. We have encountered a few cash-rich...
Marketing a company
The marketing of a business varies greatly from the sale of a building, you cannot put a sign on the street with "FOR SALE" - it would be devastating. At the same time, we want to optimize the price by limiting the number of people in the know! In short, different...
Presenting His Company – A Teaser – “TEASER” – What Should We Find There?
Writings remain, words vanish... When a broker introduces a business to potential buyers, the summary that is traded is called the teaser. This is a one-page summary of the opportunity. The important points to find here are: A good description of the company's...
Company Presentation – CIM
The presentation document has various names the CIM (Client Information Memorandum) , it can be called the “Book”, or any other name! The normal information to be found there includes: The context: the market, the business proposal: sale of assets, shares, what %;...
How much is my company worth?
What is your business worth?
Aspects of business valuation include: Basic principles How to calculate EBITDA Which multiple to use Adjustments after the closing How to evaluate a business? The question often comes back to us, and answers are multiple depending on who evaluates, for what reason,...
Assess My Business – Which Multiple to Use?
Once the EBITDA is properly evaluated, we then need to know by how much we can multiply the it to have an indicative value of the company. The element that best defines the multiple is the certainty of having future income, or an indication of the risk of the company....
Valuing A Business – What Are the Adjustments?
As part of establishing the value of a company, we have seen the basic principles. We start by having the right EBITDA, we multiply it by a multiple and we obtain an enterprise value… Now we have to make adjustments… which we call “balance sheet” adjustments… The...
Valuing a business – calculating EBITDA
The first step in properly valuing a business is to calculate EBITDA. This is the Earnings Before Interest Tax Depreciation and Amortization. These items must therefore be added from the financial statements. It is indeed the ability to generate funds for the company....
Inventories In the Context of a Business Sale
Inventory management is inconsistent in SMEs both in books and in real life on the shelves. On the books – some companies keep a high level of inventory so as not to hurt their ratios, some manage inventories to optimize taxes, and others will depreciate their...
Goodwill During a Transaction
With rising interest rates and pressure on profit margins, we sometimes have to evaluate a company and advise the shareholder that it is worth the value of the assets. The reaction of the entrepreneur can be discouragement as they believe that something more was built...
Identify your counterparty
Different types of buyers for different projects
During our steps as brokers in the purchase and sale of businesses, we meet different types of buyers… The individual Perhaps an entrepreneur who once owned their business, sold it, and is looking for a new challenge. It can be a professional (accountant, engineer,...
Identify Counterparty
For each seller, the answer will be different. What are the characteristics of a good buyer? First, let's start with the understanding what the vendor wants — at least that's our approach: For some, this is the best price. For others, they want to ensure the...
How to find our counterpart
We have chosen the theme of identifying our counterpart in a financial transaction. What makes a good "match" between a buyer and a seller? After careful consideration, we will divide our criteria between the quality of the match and the quality of the transaction. In...
Qualifying buyers
The qualification is different for an individual or a company. For companies, it is a question of seeing the strategic interest first. In terms of size, a target may be too small for an acquirer, this is normally the case when it represents less than 5-10% of the...
Qualifying prospective buyers
Once a potential buyer has been identified, it is a question of validating their level of interest. The buyer begins by receiving a summary of the transaction, the main points are the industry, geography, and the size of the company, thus the transaction. Certain...
Information sharing – what and when
During the process, once the parties have met and there is affinity and mutual interest, the requests for information and documentation begin. It is not uncommon to see an enthusiastic buyer wanting to get all information to make sure they understand everything well...
What can be negotiated
What can be negotiated?
The price and terms of payment The sale of a business is made up of a host of variables that affect the total value of the transaction. Obviously, we naturally think of the price of the transaction, the amount paid at the closing, the balance of sale, what are the...
Ideas to reduce a price gap
Very often there is a discrepancy between the value expected by the seller and what a buyer is willing to pay. The seller often wants to consider emotional factors, or he wants to maintain his lifestyle after the sale, or he discounts potential gains to come! Here...
What is the right amount of a balance of sale?
When an entrepreneur sells his company, he would ideally like to have 100% of his money at the closing of the transaction; this happens very rarely, and usually can exist when it is an asset sale. When talking about selling shares, there are three main reasons for the...
How long should a transition be
Vendors always ask us the famous question: “How long should I stay? » The answer can be rather different based on the company and situation. Everything is possible, but this will possibly impact the purchase price. You, the entrepreneur spent years building your...
At what stage should we be to prepare a letter of intent?
There are different strategies regarding this topic. The letter of intent helps initiate discussions and promotes negotiations when buying a business. The purpose of a Letter of Intent (LOI) for a buyer is to ensure exclusivity while incurring due diligence fees. For...
Letter of intent
When a buyer decides to take the next step of due diligence, before, a document is produced to validate the intentions of a transaction. This list is not exhaustive but an overview of the most frequently encountered clauses. Each case is specific and has its...
Due diligence
Documents exchange
The volume of documents that can be exchanged during the due diligence phase, which has a multidisciplinary dimension, can be impressive. To support the facts, the vendor must provide the necessary supporting documents. The fundamental principle to understand is that...
What needs to be done through due diligence…
Here we want to give an outline of the task that must be done when considering a business purchase. It is impossible for us to foresee everything, but a summary can be useful… the subject is vast it can be covered in books. Key aspects include legal, accounting,...
Due diligence – a financial perspective
There are several levels of due diligence to do before buying a business. The best understood aspect is the financial part, as the numbers are factual. At the operational level, it is important to understand when a sale is recognized. Impacts that come out of this...
Due diligence – the process
In a very concrete way, the due diligence process consists of reviewing the company in its various aspects. To do so, lists of documents from the buyers' lawyers, accountants and operators will be provided. When the seller is ready and accompanied, everything moves...
Financing
That is an important part of most transactions, rarely do we see a cash deal, without financing. Let's be clear that any banker will say that he/she is interested in financing a project – that's what they are there for. If we just rely on the verbal opinion of the...
What can cause a transaction to fail?
We know that beyond the dollars involved, once the letter of intent is accepted by all, there is still a long way to go, and this does not guarantee that the transaction will be concluded. There can be elements of diligence that stand out, uncontrollable ones, and...
Transaction and transition
A Good Purchase Agreement
Every transaction has a milestone - the so-called final contract. At the outset, it must be faithful to the letter of intent. The latter represents the broad outlines of the transaction that allowed the buyers and sellers to go ahead and begin the due diligence. The...
The adjustments
After the transaction is signed, certain financial adjustments take place. The most common is the working capital adjustment. A target is normally established in the sales contract. When the transitional financial statements are issued (those used to delimit...
Communication
Buyers, like sellers, are often nervous and want to talk about the transaction as soon as possible. The important thing is to manage the stakeholders well: employees, customers, suppliers. The objective is to ensure continuity of operations with the least disruption...
The transition
You spend years building your company, between 6 months and 2 years to sell it… after that – How long does the seller have to stay? We are always asked the question… and know that there is no prescribed answer! The factors that impact include the role of the...