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Benchmark International Successfully Facilitated the Transaction Between Oasis Water Holdings (PTY) LTD and Both Fledge Capital (PTY) LTD & SLA Capital (PTY) LTD

Benchmark International is pleased to have successfully facilitated the transaction between Oasis Water Holdings (PTY) LTD and both Fledge Capital (PTY) LTD & SLA Capital (PTY) LTD.

Oasis Water (PTY) LTD (Oasis) is a franchise group that provides clean water to retailers, corporations, end-users, and mines. The franchise operations are of various sizes, ranging from full bottling plants to small retail outlets and in-store kiosks, located across South Africa, Namibia, and Botswana. This well-known and highly regarded brand has a reputation for quality products at affordable prices, in easy-to-reach locations. A contract bottling plant and owned spring water source expand the supply chain offering.

Naas du Preez, the CEO of the Oasis Water Group was quoted saying “Our solid network of more than 300 franchised Oasis Water outlets in South Africa, Botswana, and Namibia (RO3 Water) is the ideal springboard for further expansion and our Value-Unlock Growth Strategy. With the added value and vast experience of Fledge Capital and SLA Capital, we can unlock our full potential.”

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Fledge Capital is an independent investment company that provides capital solutions to private companies across a wide range of industries that meet its investment criteria. It prefers to provide capital to companies with proven business models and leading management teams to grow those businesses. Current investee companies include WeBuyCars, King Price, BetterBond, Safari Outdoor, Atterbury Properties, etc.

Bolstered by the positive significance of the transaction for the South African M&A industry during the COVID-19 pandemic, Andre Bresler the Managing Director at Benchmark International, added “It is genuinely gratifying to see such an impressive business attract two reputable growth partners and to conclude a value-oriented deal for all parties concerned.”

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Benchmark International’s Client Gasket & Packing Inc. Has Successfully Sold to a Subsidiary of German-owned Conglomerate Elring Klinger

Benchmark International’s client Gasket & Packing Inc. a Borger, Texas-based industrial supply and distribution company has successfully sold to a subsidiary of German-owned conglomerate Elring Klinger.

Gasket & Packing Inc. is an industrial supplier of fluid sealing & bolted joint assembly products.  The Borger, Texas-based company with four locations supplies fluid sealing products for industrial customers. Products include manufactured gaskets, pump and valve packings, mechanical seals, hydraulics, o-rings, lubrication equipment, metal and concrete repair equipment, industrial bolting, and corrosion prevention supplies. The company also sells, rents, calibrates, and repairs torque equipment for bolted joint assemblies.

As an independent and globally positioned supplier,  Elring Klinger is a powerful and reliable partner to the automotive industry. Be it a car or commercial vehicle, an optimized combustion engine, hybrid technology, or electric motor – they offer innovative solutions for all types of drive system in-passenger cars and commercial vehicles. They also make a commitment to making a contribution to sustainable mobility.

Ready to explore your exit and growth options?

Transaction Director Luis Vinals stated, “This transaction demonstrates Benchmark International’s global capabilities, and the quality of its creative marketing strategies to identify buyers for our clients’ businesses.  We are excited to see our client's legacy in the capable hands of such a reputable firm and look forward to their continued success.”

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What Is An ESOP?

An ESOP is an Employee Stock Ownership Plan under which staff members acquire interest in the company through a particular benefit plan. This type of plan is designed to incentivize employees to act in the best interest of business and stay focused on company performance since they themselves are shareholders and will want the stock to do well. A study by Rutgers found that companies grow 2.3% to 2.4% faster after setting up an ESOP. 

ESOPs are established as trust funds and can be funded when companies:

  • Put newly issued shares into them
  • Put in cash to purchase existing company shares
  • Borrow money through the entity to buy shares

If the plan borrows money, the business contributes to the plan to facilitate repayment of the loan. Contributions are tax-deductible and employees pay no tax on them until they leave or retire. If an ESOP owns 30% or more of company stock and that company is a C corporation, owners of a private company selling to an ESOP can defer taxation on gains by reinvesting in securities of other businesses. S corporations can also have ESOPs and the earnings attributable to the ESOP's ownership are not taxable.

 

Ready to explore your exit and growth options?

 

Companies of all sizes use ESOPs, from small family-owned businesses to large publicly traded corporations. Company leadership usually offers employees stock ownership with no upfront costs. It is common for distributions from the plan to be linked to vesting, which is the proportion of shares earned per each year of service. The shares may be held in a trust for safety and growth until the employee resigns or retires—they cannot take the shares with them. If an employee is fired, they usually only qualify for the amount they have vested in the plan. Once fully vested, the business buys back the vested shares from the departing employee and the money goes to that employee in the form of either one lump sum or periodic payments. After the business buys back the shares and pays the employee, the shares are either redistributed or voided.

ESOPs offer several benefits for the ownership, the company, and its employees. Owners gain liquidity and asset diversification, they can defer capital gains taxes on proceeds, and they maintain upside potential and leadership in the company. Companies get tax deductions on sale amounts, can become income tax-free entities, and have a tool to retain and attract talent. Employees secure retirement benefits and enjoy having a real stake in the company they work for.

It should be noted that employee ownership does not mean that employees are more involved in operations or running the business. They are not entitled to receive financial or strategic information. They are given a summary plan description and annual statements for their account. In some cases, employees may be granted certain voting rights.

ESOPs and Exit Planning

ESOPs are often used in succession planning as a strategy for liquidity and transition. Around two-thirds of ESOPs provide a market for the shares of a departing owner of a profitable business. Others are used as a supplemental employee benefit plan or as a way to borrow money in a tax-favored manner. Because ESOP transactions are flexible, they enable ownership to either withdraw slowly over time or all at once. Owners may sell anywhere from one to 100% of their stock to the ESOP, allowing them to stay active in the company even after selling all or most of it.

Additionally, ESOP transactions provide more confidentiality than third-party sales. Because confidential information does not need to be shared with prospective buyers, it eliminates risk of detriment to the business. An ESOP transaction is also known to offer a greater certainty of closing versus sale to a third party, and terms of the transaction are arranged to be fair to the ESOP and its members. It is also considered to be more conducive to maintaining healthy company culture because it aligns the interests of ownership, management, and employees.

Other Types of Employee Ownership

In addition to ESOPs, companies can offer employees the following options:

  • Direct-purchase programs that allow employees to buy shares of the company with their personal after-tax money.
  • Stock options that offer employees the chance to purchase shares at a fixed price for a set period of time.
  • Restricted stock, which gives employees the rights to acquire shares as a gift or purchase after reaching certain benchmarks.
  • Phantom stock, which provides employees with cash bonuses equal to the value of certain shares based on performance.  
  • Stock appreciation rights that allow employees to raise the value of an assigned number of shares, which are usually paid in cash.

Let’s Talk About Your Future

If you’re ready to make a move with your company, we’re ready to make the most of the process for you. Contact one of our esteemed M&A advisors at Benchmark International and we can begin writing the next chapter of your success story.

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What Is A Buy and Build Strategy?

A buy and build strategy is commonly used by private equity firms seeking to expand operations, generate value, and increase returns. It is accomplished through the acquisition of a platform company with already established internal capabilities that can be further built upon. This can include the acquisition of several smaller businesses, combining their operations to create more value. Buy and build transactions, which can be aggressive, tend to occur more often in slower economies because private equity firms become even more interested in improving returns at a time when organic growth and operational efficiencies are not enough. They are also more common in highly fragmented sectors.

Buy and build can be a great formula for expansion and added value. It allows businesses to acquire skills and expertise that would normally require a great deal of time to build on their own. It can help a company expand into other markets in a much more efficient manner. Usually, these private equity firms have a relatively short holding period of around three to five years and investors expect a fair amount of interest after an agreed time period. Buy and build deals result in an average internal rate of return of 31.6% from entry to exit, versus 23.1% for standalone deals. While private equity is the most common employer of buy and build strategies, this tactic is also used by strategic buyers, stock listed companies, and family-owned companies.

 

Ready to explore your exit and growth options?

 

Because it brings about a great deal of change, a buy and build strategy must be executed properly in order to succeed. Otherwise, the resulting effects can actually be detrimental to value. In an ideal situation, the private equity firm will have significant experience in the particular sector of the company that they are acquiring. Having a strong CEO and management team with a solid background in the field of business is also important because the transition and integration process can be complicated and needs to be handled adeptly. The leadership should also have a certain skillset that includes an understanding of areas such as risk management, operational metrics, and change management. This is especially true when the acquired companies are competitors and there needs be vertical integration of supply chains. Additionally, a buy and build strategy can take several years because it involves the acquisition and integration of multiple companies.

To learn more about why buy and build strategies work, check out our previous post here.

Time to Make a Move?

Whether you are looking to sell your business, create strategies for growth, or craft an exit plan, our experts at Benchmark International will take the time to carefully devise strategies designed for your specific needs. Your goals are our goals and we will put all of our resources and global connections to work for you, getting you the most value possible for your business.

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How Much Time Will The M&A Process Require Of Me?

As a business owner, you may be curious regarding how much of your time you should expect to invest in the process of a merger or acquisition from start to finish. First and foremost, it is important to recognize that any M&A deal will take time. This can be anywhere from several months to years, depending on various circumstances such as the state of the current market and the type of business. The good news is that if you hire an experienced M&A advisory team to handle the transaction, it will not require much of your time at all in the early stages.

The Preliminary Phase

A quality M&A team will handle the vast majority of the necessary work required to facilitate a transaction with the understanding that you have a business to run and you need to stay focused on doing just that. This early phase of work includes:

  • Compiling due diligence documentation
  • Studying the market
  • Assessing the data
  • Creating a solid marketing strategy
  • Vetting potential buyers

Of course, you should constantly be kept informed of all developments in the process, but you will not need worry about doing all the legwork and dealing with time-consuming details. An M&A team will guide you through every step, making sure that all communications are clear and concise, and that you can stay focused on your day-to-day life with some peace of mind.

 

Ready to explore your exit and growth options?

 

There are many reasons why enlisting an M&A advisory firm as your partner offers you a major advantage in a deal. You could try handling a sale yourself, say with the help of your lawyer or CPA, but it is a complicated process that makes it very difficult for a business owner to juggle running their business while dealing with all the minutia involved in an M&A transaction—especially when you have no prior experience in selling a company. Think about how much you really know about corporate and antitrust laws, securities regulations, and where to even find a buyer. Not to mention that experienced buyers will recognize that you are in unchartered waters and will not hesitate to take advantage of your lack of practice. Keep in mind that it is firmly established that the majority of mergers and acquisitions (70 to 90 percent, according to the Harvard Business Review) fail. This makes it even more crucial that you have an experienced team working on getting you results. Experienced M&A advisors know how to get deals done because they do it every day.

But there is more to it than that. Selling your company is an emotional journey. Your personal feelings can easily cloud your judgment regarding a sale. It is incredibly helpful to have a team in your corner that is looking out for your best interests while being able to assess buyers on their true merit. A good M&A advisor will have empathy for you during this difficult process and know how to help you through it while getting a high company valuation and the results that you deserve.

 

The Later Stages

Once you agree to an offer, it will require a little more participation on your part, but in a way that you should welcome, because this great milestone is finally nearing completion. You will be introduced to prospective acquirers and presented with their letters of intent. Contract negotiations and financing strategies will be underway. Your M&A deal team will work with you to evaluate the top bidders and narrow down the options, and get you across that coveted finish line to an exit strategy that is designed specifically to fulfill your unique aspirations for the future. Once you have decided on a buyer, you will need to work together to formulate integration strategies for the ultimate success of the business.

Thinking About Selling?

Even if you have not made up your mind to sell, it can still be fruitful to have a conversation about the possibilities for your future. The M&A experts at Benchmark International would love to discuss your options and help you gain insights into what and when is right for you, your company, and your family. If you choose to sell, our proprietary methodologies and global connections will help you find the right buyer and get the maximum value for the business you have worked so hard to build.

 

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How To Look Good To Clients

In any industry, it is always important to look good to clients and to live up to their expectations. When working with clients you should always try to go above and beyond what they expect, which will help your firm look good. Regarding mergers and acquisitions, impressing clients is key when it comes to selling their businesses. From the onboarding process to the closing of the sale, looking good is essential. There are many ways to look good to a client but focusing on the firm’s professionalism, knowing your client, and building relationships with customers are a few keys ways to look good to your clients.

Professionalism

Looking good to clients starts with a first impression and how professional you appear to a client. A firm handshake, an appropriate suit, and a friendly greeting can help impress a client, but professionalism is ongoing and will continue throughout the process of selling a company.

A few ways to maintain professionalism are:

  • Well-rehearsed presentations
  • Constant communication
  • Proper business etiquette

Clients want to be respected and treated appropriately in a business setting. Clients will expect professionalism, so it is important to go above and beyond their expectations. Providing well-rehearsed presentations about the client’s company, market, and industry will help you stand out against other firms.

Constant communication and updates on the status of the client’s file are key to impressing the client. Clients will be impressed by proper business etiquette how well you can articulate an understanding for their industry and particularly their business structure. 

Know your client

Knowing your client is about more than just understanding what they do and whom they serve. There are many aspects to a business, and clients will be impressed if you take the time to understand the ins and outs of their company.

Businesses are multidimensional and no one knows the business as well as the owner. Before you meet with a client make sure to know some of the important aspects of their businesses. Some key things to research before your initial meeting with a client include:

  • Details of services and products provided
  • The markets they operate
  • Customer review

Understanding and knowing your client starts before the initial meeting in person. Complete your research on the company prior to the meeting, note public information about the markets they operate, and their customers.

Building Relationships

Selling a company can be a very emotional process for business owners and building a relationship with the sellers is key to looking good to clients. Clients want to know that you are taking the time to understand what they are expecting to get out of selling their business. For some this can be monetary, for others it can be retirement or a change in their careers. Regardless of the reason, it is important to take the time to understand what they are looking for and understand those key aspects.

Some crucial ways to build and maintain relationships are

    • Always be available
    • Be open to listening to concerns and honest with responses
    • Be realistic, do not over-promise

Clients want to know they are being taken care of when it comes to selling their businesses. It is important to build a relationship, establish trust, and let your client know you will be available through every step of the process. By building relationships, you will look good to clients and help them feel at ease throughout the mergers and acquisitions process.

When it comes to looking good to clients, there are many ways to be impressive. However, professionalism, knowing your client, and building relationships are fundamental. When you can provide professional materials and a true understanding of their company and industry, you will look good to clients. Diving deeper with your clients and showing an understanding on more than a basic level will set you apart from competitors and impress the clients. Building relationships and maintaining those throughout the process will also impress clients. While there are many ways to look good to clients, showing clients that you are professional, understand their business, and want to build a strong relationship with them will help you look good to clients.

 

Author
Madison Culberson
Transaction Support Analyst
Benchmark International

T: +1 615 924 8950
E: culberson@benchmarkintl.com

 

 

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7 Key Considerations When Selling Your Business

You have poured your life into building your business. Selling it is not only a very emotional process, but it can also be a monumental task that involves many intricacies. Careful planning and preparation before a merger or acquisition can translate into your efforts being rewarded with a high value deal. While there is quite a bit that can go into preparation, the following seven considerations are key to arriving at a successful deal in the end.

1. Protect What’s Yours

Intellectual property can be a company’s most significant asset. It differentiates you from your competition, is an important marketing tool, and can provide revenue through licensing agreements. It is also a major driver of value in a merger or acquisition. Any intellectual property that belongs to your business (proprietary technologies, copyrights, patents, design rights, and trademarks) must be legally protected. Enlist your legal counsel to ensure that all the proper paperwork is filed and current. If you are considering a cross-border transaction, you will want to make sure the property is protected on an international level as well as a local level, as different countries have different laws and requirements.

2. Get Your Finances in Order

It’s never a good look when a prospective acquirer asks for financial documentation and you are scrambling to put it together. This can also delay the process. Before taking your company to market, you will want to compile all of the proper financial and contractual records and have them organized and ready to turn over. Having your finances in order also means that you should seek to resolve any outstanding issues where possible before trying to sell. For example, if you know you have a situation you can probably resolve, getting it straightened out ahead of time can eliminate unnecessary complications during the due diligence process. The due diligence process is also going to require an audit of your assets. A buyer is going to want a complete picture of what they are acquiring. Intellectual property is an important element of due diligence but the process also includes areas such as equipment, real estate, and inventory.

3. Maintain Business as Usual

Going through the lengthy process of selling a business can certainly provide its share of distractions. No matter how easily it can be to become sidetracked or consumed in the details of the sale, now it is more important than ever that you stay focused on the daily operations of the business and ensuring that it is running at its best possible level. This includes keeping your management team focused. Deals can take time and they can also fall through. Every aspect of an M&A transaction hinges on the health of your company at every stage of the game and you need to make sure the business does not lose any value.

4. Think Like a Buyer

As a seller, you obviously don’t want to leave money on the table. That is why it can be helpful that you look at your business from the perspective of a buyer. This will help you avoid being fixated on a sale price the whole time. Think about why they would want to buy your business and what opportunities it affords them in the future. If you can improve your business and develop it as a strategic asset before you try to sell, you can increase its value and get more money.

5. Predetermine Your Role

Sometimes after the sale of the business the original owner executes a full exit strategy and severs all involvement with the business. You need to decide up front what is right for you. To what extent do you plan to relinquish control of the company? Do you wish to remain an employee or a member of the board? How much authority do you plan to retain? You should think these options through before going to market so that you can find a buyer that supports your intentions for the business.

6. Have a Post-Sale Plan

Consider what life will look like following the sale of your company. Think about what your financial picture will look like. How will you invest the proceeds to maintain your financial health? How much cash will you take at closing? How long should the earn-out period be? What about stock options? And don’t forget about tax liability. How much will be paid immediately and how much will be deferred? These are all important questions to ask yourself when anticipating the sale of your business.

7. Retain an M&A Expert

Selling a business is a complicated process and a seller should never go it alone. You may be an expert at your business, but chances are you aren’t an expert at selling businesses. Enlisting the partnership of a M&A experts can not only help you get a deal done smoothly but can help you get the maximum value for your company. M&A advisors know what to expect, they know how to avoid common pitfalls, and they have access to resources and experience that can be game changers for your deal. They can also help you work through some of the difficult decisions mentioned above. Of course, they come at a price, but a price that is worth it when you consider how much their involvement can increase the value of your sale and the chances of the deal being closed.

Ready to Sell?

When you are ready, so are we. Reach out to our M&A advisory experts at your convenience to talk about your options and how we can help you sell for the utmost value.

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Benchmark International Volunteers At The Central Texas Food Bank

Benchmark International continuously thinks of ways to give back and support its local communities, especially during this time of safe social distancing. The Benchmark International Austin office showed their support to the community this week by volunteering at the Central Texas Food Bank.

The Central Texas Food Bank is the largest hunger-relief charity in Central Texas. They help about 46,000 people per week, with one-third of them being children, get the nutritious food they need and otherwise wouldn't be able to afford. The food bank serves 21 counties in Central Texas through partnerships and smaller pantries.

Our team, along with others from the community, boxed 4,360lbs of food, which will serve 3,625 meals. This effort was completed while maintaining social distancing guidelines.

Benchmark International was honored to volunteer and contribute to the Central Texas community. Learn more about how you can support the Central Texas Food Bank - https://www.centraltexasfoodbank.org

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Benchmark International Successfully Facilitated the Transaction Between Cello-Wrap Printing, Inc. and Cello-Wrap Packaging, Inc.

Benchmark International is proud to announce the acquisition of Cello-Wrap Printing, Inc. by Cello-Wrap Packaging, Inc. The Benchmark International team worked diligently on behalf of Cello-Wrap Printing and was a resource for the transaction through the closing date.   Both the seller and buyer have already indicated that the integration has been smooth, and we anticipate maintaining the relationship with Cello-Wrap Packaging, Inc. as we continue to work on relevant mandates. 

Cello-Wrap Printing, Inc. is a three-generation family business located in Farmersville, Texas.  The company is a full-service flexographic printing company that offers printing, lamination, and slitting services utilizing polypropylene, cellophane, and foil as substrates.  The company primarily serves the food packaging industry and has been in operation for over 60 years.

Cello-Wrap Packaging, Inc. is Southwest Michigan's premier provider of flexible packaging serving customers with diverse product lines and evolving needs.  CPI was founded half a century ago as a plastic bag manufacturer for parts to the Detroit automotive industry.  They are now a leading BRC certified manufacturer of plastic bags and flexible packaging serving a variety of industries, with an emphasis on the food-retail sector.

Ready to explore your exit and growth options?

The Benchmark International team used its vast array of resources and experience to help facilitate a transaction structure that allowed for both the buyer and seller to come to terms.  This included a carve-out of real estate and ensuring that the seller and their family was taken into consideration as part of a respectful and considerate transition of the business.

Deal Associate, JP Santos commented, “The Benchmark team is excited for what the future holds for Mr. Whitaker, our client, and the new ownership of Cello-Wrap. Both parties were aligned in their desire to ensure the continued success of the business, and we are pleased that an equitable transaction was agreed upon and executed successfully.” 

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Avoiding M&A Integration Failures

Successful integration strategies are crucial following any merger or acquisition. Knowing how to execute integration the right way means knowing what failures can be avoided.

Not Seeing the Big Picture
When a deal is underway, it is common for the focus to be on external strategies such as gaining market share and creating growth. But internal focus and maintaining continuity need to be just as important during this time as well. The long-term vision for the company is paramount, and this vision should be aligned between all parties involved throughout the M&A deal process and following completion of the transaction. By not sharing a big-picture strategy for the future, leadership puts the health of the overall organization at risk. All areas of the business are able to work together fluidly when all team members understand the goals for the company moving forward—goals that should be firmly outlined and clearly communicated by management. This should be planned before any M&A deal is completed, not after.

A Lack of Planning
Speaking of planning…the lack of it is a major reason for post-M&A integration failures. And planning applies across the board to pretty much every topic and scenario that can affect day-to-day operations, from HR to project management to revenue projections. Everyone should know his or her roles and responsibilities. All systems should be prepared to keep running smoothly. Proper planning can bridge the gap between a singular focus on the bottom line and daily operational matters, bolstering the odds that the business will run efficiently and prosper. This becomes especially important if the integration is happening cross-border and both cultural and regional issues need to be thought out.

 

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Botched Due Diligence
M&A integrations are prone to failure when the due diligence process is not well executed, which is why deals should never be rushed. Without the necessary due diligence measures, any deal can fall through. The right oversight and research increase the chances of success for a transaction before, during, and after it is complete. Due diligence is critical to uncovering any potential issues so they can be addressed before a sale. It also provides an accurate picture of the inner workings of the business, which aids significantly in the process of integration. Due diligence is hugely important to any merger or acquisition and should never be overlooked or pushed through just to get a deal done.

High Costs of Recovery
Leading up to integration, it is possible to run up high costs that become an issue. This comes back to the topic of planning but deserves to be called out because it can be disastrous. You should be sure that you have adequate resources and bandwidth that can withstand the potential costs of integration. When faced with a challenging integration that could span several years, it can be difficult to recover costs in the long term.

Culture Clash
Cultures within the workplace can vary greatly, especially in cross-border transactions. It is an enormous factor in getting the integration process right. When culture is not accounted for in the integration, it can be both costly and a massive headache. Ideally, the cultures should be similar enough to integrate as smoothly as possible. The merging work environments should be carefully analyzed prior to a deal to achieve an understanding of how the two parties will mesh following the deal. This also means that the leadership team needs to grasp any cultural differences, no matter how minor, in order to be sensitive to any issues that may arise post-integration.

Inadequate Capacity
Deals that involve expansion have certain integration needs of their own. There must be proper assessment of the organization’s capacity to integrate and scale up. This means having enough resources so they can fill in any gaps without being over-extended, leaving you with no room for future growth. These resources include people, time, money, equipment, and space.

Time to Make a Move?
If you are a business owner considering an M&A strategy, our team at Benchmark International would love to hear from you. You can count on us to put our global connections and superior resources to work for you, and our award-winning advisors have the experience to help you avoid any pitfalls and get the integration process right.

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A Beginner's Guide To Finding An M&A Advisory Firm

Entering into a merger or acquisition is one of the most important decisions a business owner can make, so finding the right M&A advisory firm is equally important. In the news, we frequently hear about massive M&A deals happening between big corporations. Big investment banks typically broker these large-scale deals. These same banks usually cannot be bothered to represent companies in the lower to middle markets because it’s not enough of a moneymaker for them.

Why Do I Need an M&A Advisor?

While you are an expert in your area of business, you likely do not have access to the connections and experience to identify opportunities that will result in the best strategic M&A solution. Partnering with an M&A expert will afford you many advantages. Selling a company is a complicated process and you will be relieved by how much they will tend to the many details and constant requests. A high quality M&A firm will:

  • Have established networks that will get you access to the right type of buyers.
  • Be skilled at managing expectations on both sides.
  • Know how to improve your business and market it appropriately.
  • Maintain the highest levels of confidentiality throughout the process.
  • Know the right timing for taking a business to market based on experience in that sector.
  • Appoint legal and financial services where needed.
  • Perform comprehensive due diligence and data management.
  • Conduct extensive negotiation and create a competitive bidding environment.
  • Finalize a fair and premium valuation of the business to get you maximum value.
  • Structure the transaction in terms of legal issues, payments, contracts, shareholders, debt restructuring, warranties, and indemnities.
  • Keep you informed at all stages of a deal while keeping you out of unnecessary minutia.
  • Assist with any necessary strategic decisions regarding integration, employees, timing, and announcements.

 

Ready to explore your exit and growth options?

 

Finding Quality M&A Representation

As an owner of a small to mid-size business, where do you start when you are seeking M&A representation? After all, this is a major life decision and you absolutely want to get it right. M&A advisory services range from big investment banks to small boutique firms. You need to assess what is right for you in several aspects. These are some key considerations for your search:

  • Many M&A advisory firms do not have varied expertise that spans local, regional and global levels. Look for a firm that will expand your options through the farthest geographical reach.
  • It’s okay to be discerning. Talk to multiple firms and create a shortlist. This is going to be a long process so you should feel comfortable and have a liking for the people you are working with, while you should also feel confident in their abilities to get the deal done right.
  • Study the reputations of the M&A firms and look for one that is well known for getting maximum value in deals. Look at what types of deals they have done in the past and if their experience is applicable to your business regarding markets, products, services, and regions? Also, seek out any available testimonials from their clients and look for a firm that has proven strong relationships.
  • Pay close attention to the initial discussions you have with them. Do they seem aligned with your goals and motivated to get you exactly what you want or do they seem stuck on going their own direction? You want your M&A advisors to be as aligned as possible with your vision and aspirations for the future. You should feel confident that they are in your corner and not just there to make a buck.
  • Assess their ability to create a competitive bidding scenario among multiple parties. Are they known for doing this? Do they have a large enough network and the right resources to make it happen?
  • Consider how their fees are structured. Some firms may take a percentage based on deal size. Some may have upfront fees, monthly fees, and registrations fees. You don’t want to be met with surprise costs. Make sure they are transparent about their fees and that their justification for them makes sense. While you do not want to get ripped off, you should also keep in mind that selling your business is a once in a lifetime opportunity and you want to get it right, so this probably isn’t the time to cheap out.
  • Look for an M&A advisor that you know will work with you as a true partner. A good firm will offer you constant engagement and welcome active contributions from you. They will make sure you do not miss any details and that you never feel left in the dark. They will also make sure that zero communications are sent to a buyer without your consent and input.
  • Make sure you are getting an M&A advisor and not just a business broker. A broker is less likely to offer a comprehensive partnership that details long-term plans and integration strategies that are important to the process.

Are You Ready to Sell?

If you are seeking an M&A partner, we kindly ask that you include Benchmark International in your search. We believe that our award-winning team can offer you all the qualities you desire while getting you the most value possible for your company. We look forward to hearing from you.

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Key Tips For Building A Great Management Team

Effective management is essential to the growth and success of any business. This is especially true following a merger or acquisition. Through analytics conducted by companies such as Google, we know that certain characteristics and behaviors have been proven to make all the difference in leadership’s ability to get results for the business.

Good Communication & Collaboration
Quality leadership entails listening to staff as well as sharing information with them. Talent that feels both heard and informed also feels included, valued, and motivated. When employees think that their feedback does not matter, or that they are being kept in the dark, they not only feel underappreciated, but they can also lose trust in their leaders. That’s never part of any playbook for success.

Clear Vision and Strategy
Clarity provides the direction that is critical to getting things done, which correlates to the valuation of the company. Management should fully grasp where the company is going and how to get it there. Vision and mission statements are helpful but the leadership team needs to actually believe and uphold what they say.

Adaptability
Leaders of businesses are frequently faced with changes and new challenges. They must be able to adapt to these circumstances quickly in order to be successful. This is especially true in this day and age when technology brings about change more rapidly. Effective leadership will not view change as an obstacle, but rather as an opportunity. When championed by management, this philosophy can be contagious throughout the ranks.

 

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Supportive of Development
It is important that employees understand how they are performing and are given paths to self-betterment. Management should help talent set goals, create timelines to achieve those goals, and regularly evaluate performance. Research shows that 69 percent of high-performing businesses rated company-wide communication of goals as a leading tool for building a team that is loaded with top performers. Also, achievements should be celebrated and rewarded. Even small gestures can make a difference.

No Micromanagement
Building trust, respect, and quality relationships between management and employees means avoiding micromanagement. When staff is micromanaged, they tend to feel the opposite of empowered and it can directly affect morale in a negative way. This also means that your leadership must have the ability—and willingness—to delegate.

Strong Decision Making
When you picture a great leader, you picture someone with strength and conviction, not someone who cannot make up their mind. Leaders need to be productive, results-oriented and have confidence in their choices. They must be able to balance reason with emotion, and know when the timing of a decision is critical to its results.

Empowering Coaching Mentality
Management should foster an inclusive team atmosphere that shows concern for the success and wellbeing of employees. This involves being supportive of staff, finding ways to help them grow, keeping promises, and providing an encouraging work environment.

Relevant Technical Skills
Studies show that technical skills fall at the lower spectrum when it comes to ranking leadership qualities. However, in order to help advise the team, the leadership should possess the proper skills and knowledge that apply to the business. If employees feel that management does not know what they are doing, they will see right through it and will struggle to take leadership seriously.

Time to Make a Move?
If you feel that a merger or acquisition is key to your future, please reach out to our M&A dream team at Benchmark International to arrange a deal that will turn your dreams into reality.

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How To Explain To Your Family That You Are Selling Your Business

Once you’ve made the difficult decision to sell your company, there comes a time when you must inform those closest to you about the news. Telling your family that you are going to sell will depend on their level of involvement with the company. If none of your family members are employed in the business, sharing your plans will not be quite as sensitive of a subject. In fact, they may welcome the decision because you are about to have more time to spend with them, which is why you should not inform them until you are certain that you are going to sell.

Family Matters

It is an entirely different story if you have family that is on the payroll. Will a family member be taking over the company? How will any staff that is family be impacted by a change in ownership? These types of scenarios are when things need to be handled more delicately.

If a family member is taking over the business, there are several important considerations that can affect how the entire process plays out and how smooth the transition goes. It is important that you are sure that you and the new owner share the vision for the future of the company. If you decide to sell to them, and later learn that they wish to take the business in a different direction, you may not agree and emotions could lead you to change your mind, causing friction in the relationship that can affect the health of the business moving forward, especially if they are an essential part of the management team. Selling to a family member also means that it is important that there is clear and open communication regarding the valuation of the company and how they will be paying for the transaction.

 

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Also, it is not uncommon for family members to feel it is adequate to seal a deal with a handshake, but a strictly verbal agreement can be very problematic. You cannot simply just hand it over. It is crucial that you have a tangible agreement in writing so that everything is clear, on paper, and you can move smoothly towards your exit. You will want it to cover details such as a third-party valuation, amount paid, payment schedules, if you as the initial owner will remain on payroll, and whether you will still be involved in the business and to what extent. It can be helpful to bring in a M&A professional to advise you through this process to ensure you have all of your bases covered and help you avoid making emotionally driven decisions.

Additionally, you need to be sure that the next generation actually wants to take over the family business. Sometimes an owner assumes that their children will take the reins without realizing they have no interest in doing so. Another scenario to consider is whether a family member has a sense of entitlement regarding the business that you may not be aware of. You’ll want to make sure everyone is on the same page. If you plan on selling to a buyer outside the family, and you unknowingly have a family member who thinks they will be inheriting the business, a great deal of resentment can arise and cause stress for employees, and problems within the operations of the company, as well as with the success of any merger or acquisition.

Timing is Everything

Regardless of to whom you are selling the company, the timing surrounding sharing the news is critical. Confidentiality is imperative to the sale process, so you never want to break the news too soon. The process can go many different ways. The deal can fall through, or you could change your mind about partnership or minority investments, or the buyer could take actions that alter the terms of the deal. You may even decide to go with a different buyer. In any case, the due diligence process in any M&A transaction can take several months to years. Communicating the news of a potential sale with too many people too soon can lead to issues such leaked information, distracted employees, and other factors that could end up negatively impacting the final terms or killing the deal altogether. It is best to keep the situation to yourself for as long as possible. By waiting, you are also ensuring that the deal is closer to being finalized and less likely to fail, so you avoid getting people worked up about a sale that is not even going to happen.

Communicate Clearly

In any case, when you share the news with your family that you are selling your business, you will want to be open and honest about your reasons. Talk about the buyer and why you chose them. Discuss your plans for the future. Clear communication can help to avert misunderstandings or misplaced expectations. For example, say that your spouse thinks that you are now going to travel the world together but you actually plan on starting a new venture. Do not assume they know what is on your mind. Being clear and up front about your plans can keep things running smoothly at home.

Let’s Talk About Selling

If you are ready to sell your company, contact our M&A specialists at Benchmark International for the highest level of expertise and guidance. We understand that you’ve spent your life creating wealth and value. We know you want your legacy to be handled with care. We can help you sell for maximum value and get you on the path to the perfect retirement or the next phase of your entrepreneurial life.  

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