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Overview Acquisition activity in the IT services space is strong heading into 2020. A broad base of both strategic and financial buyers are paying attractive valuation multiples for companies that offer the right fundamentals. For business owners exploring the possibility of selling their organization understanding market dynamics in terms of both valuation multiples and characteristics…
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Buyers typically utilize a historical multiple of EBITDA to arrive at a valuation for an electronic distributor. However, a positive operating income on the Income Statement does not guarantee a high business value. A distributor’s business might look profitable (positive operating income) but may not be financially strong if cash is tied up mostly in…
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Business valuations in a sale are based on the interactions of several important factors. We have outlined the ten key factors to consider. Cash flow is the primary determinant of business value, but the other factors noted can make or break a successful transaction. The type and circumstance of different buyers will lead to varying…
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Valuing a privately held business can seem daunting when you consider all of the possible methods of a company valuation. Outlined below we briefly discuss the most common types and which are most appropriate when selling a business in the market. The valuation of a business includes financial calculations, but other factors are also important…
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Valuations Exceed the Average for all Sectors Summary: The Electrical Wholesaling industry is highly fragmented and set for increased mergers and acquisitions as companies look for continued growth. Companies of all sizes will be potential targets, especially those with desirable product lines and advantageous locations. Electrical Wholesaling is an industry that serves the electrical equipment…
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Often when business owners decide to sell their business, the first type of buyer they consider are their competitors. This makes sense since competitors already know the business and industry, and they often have the most to gain from the purchase. However, competitors are not your only choice and too often they are not the…
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Preparing to Sell Your Business: Tips For Reducing Environmental Risk (Based in part on excerpts from Brownfield Science & Technology, Inc.) Environmental issues can derail a transaction and seriously impact value unless business owners take a proactive approach. Buyers and their lenders will conduct environmental due diligence so it is imperative that sellers plan ahead…
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There are times when an owner of a business will be approached by a potential buyer, and be given an unsolicited offer to sell the company. Sell your company? It may have been in the back of your mind from time to time, but you really haven’t given it too much attention. So while you…
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Acquiring another business can be an effective way to drive growth, but it requires careful consideration and strategic planning. While many acquisitions face challenges, taking time to assess both your own business and the target company can boost your chances of success. To determine whether acquiring a business aligns with your strategic objectives, start with…
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Business owners who are thinking of selling their business often believe they are faced with two choices: However, in the world of middle-market companies (with revenue between $3 and $100 million), owners can actually enjoy a variety of options. Smart buyers know that a business’s current owner is likely to have extensive knowledge, skill, and…
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A key goal in selling your business is gaining maximum value for what you have built. There are a few significant considerations to keep in mind when you’ve reached this stage of the process. Locating Qualified Business Buyers Of greatest importance is (with the help of your advisor) to have found one or more strong…
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It’s natural for business owners to dream of expanding their influence and becoming the “800-pound gorilla” in their field. Growing your business is a worthy goal, and acquiring another company can be a rapid way to enhance your company’s value and reach. However, growth through acquisition should be driven by strategic considerations, not just size…
