An IPO is an initial public offering (IPO), which is the first limited public stock sale by a private company. IPOs are a strategy often used by smaller businesses to raise capital from public investors in order to facilitate expansion and growth. Once public, the company can be traded on the open market. There are both upsides and downsides to taking a company public.READ MORE >>
What is an M&A Strategy?
A strategy for a merger or acquisition is the rationale behind the transaction. Your objective should determine the type of deal that is right for your company. Maybe there is even more than one objective. Commonly, these goals are focused on boosting financial performance and mitigating risk.
When it comes to mergers and acquisitions, it is common for a seller to struggle to see the transaction from a buyer’s point of view. This is quite understandable because a business owner spends years, and even decades, building their company into a successful venture. It makes it more difficult to see the transaction from a potential buyer’s perspective. Many M&A transactions fall through because the seller and buyer simply cannot get on the same page. As a seller, you can work with an experienced M&A advisor to help you manage your expectations for the value of your company so that you can not only get the most out of your deal but also make sure the deal goes through. If you’re selling a business, you should understand how the valuation of a company works, what it is based on, and what is important to a buyer.READ MORE >>
As a business owner, it is important to have a solid understanding of what a sustainable growth rate (SGR) is, and why it matters to the valuation of your company.READ MORE >>
The COVID-19 pandemic taught us quite a few lessons for keeping a business surviving and thriving in unchartered territories. Now is the time to be forward-thinking. There are ways that you, as a business owner, can utilize mergers and acquisitions (M&A) as an effective strategy to accelerate your company’s recovery from the lingering impacts of the pandemic from both a defensive and offensive perspective.
Accelerate Your Business Model
Emerging from a pandemic is not the time for organic growth strategies for most businesses. This is especially true for sectors that have experienced irreparable impacts, such as retail, hospitality, tourism, and live entertainment. However, M&A can accelerate growth within a business model is otherwise not feasible or accessible ways. Whether it’s accessing new supply chains or acquiring a competitor’s talent, M&A is an effective tool that can open up several possibilities for growth and success.
Technology and innovation have become more imperative than ever because of the need for rapid digitalization during the pandemic. When remote working and online conferencing became the norm, disruptive tech was put on an epic fast track. Everyone wants what is hot, and they want it ASAP. Otherwise, they risk falling behind the competition. As a result, these technologies offer significant M&A opportunities for companies in many sectors, such as cloud computing and artificial intelligence.
Boosting Supply Chains
Supply chains have taken a significant hit due to the pandemic, with some sectors experiencing worse disruptions than others (such as automotive, energy, and manufacturing). As a result, these sectors are being forced to reboot and find ways to alter their supply chains to get what they need. This is where M&A can be a real game-changer, helping companies gain access to alternative supply chains and keeping operations on track.
Alliances and Joint Ventures
Because of the pandemic, consumer behaviors and spending patterns have changed. Welcome to the new normal. This means that businesses will need to look to new strategic alliances to be more agile in catering to new customer habits, and M&A can help make these joint ventures a reality.
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Protect Your Future
Integration and Value Creation
Now more than ever, many companies need to cut costs, free up working capital, and do it quickly. M&A is one of the more timely ways to make this happen. Also, planning on ways to create value today can protect your business in the future. By turning to M&A, you can both integrate and develop.
Divestitures and Separations
As economic pressures persist, many businesses need to divest non-essential assets. At the same time, they may also need to unload any highly sought-after assets for financial reasons. There are also opportunities due to sustainable investing becoming much more popular. In addition, environmental, social, and governance (ESG) initiatives lead to rebalancing portfolios, which could mean actionable assets for divestiture. In any case, sellers should enlist professional M&A advisement to ensure that they avoid getting into asset fire sales. Learn more about the value of hiring an M&A advisor here.
End-to-End Distressed M&A
2021 was a record year for M&A, and a great deal of opportunity still exists. Many types of investors, including private equity, activist, and corporate investors, have strong balance sheets. They are sitting on plenty of cash and are in the position to move quickly on acquisitions of distressed businesses.
Let’s Get Started
If you think M&A strategies could benefit your company, our experts at Benchmark International would love to hear from you so that we can discuss your options and help you make the most of your success.
For more than ten years, business owners have enjoyed a sellers’ market in the lower and middle markets. But the tide is turning. Here’s the headline: Multiples are not trending downward, buyers are slower, more cautious, and cockier, and deals are taking longer.
The best analogy is that we have been on a roller coaster, and we no longer hear the clicking sound as we go up, but we’ve also not started to feel anything in our stomachs. It’s almost as if we are paused, and we feel certain that we know what is coming next. Buyers feel as if they’ve been bullied for the last decade by aspirational sellers and their agents. They have pent-up resentment. Some of it is starting to show.
When you are about to sell a business, you have a few options regarding how to do it, and whose expertise to enlist. Many people confuse M&A advisors with business brokers. While there are some similarities, they are not one and the same. There is actually more than one significant difference between an M&A advisor and a business broker. It is important for any business owner to understand these differences, so that it can be determined which is the best way to go about the sale of a company.READ MORE >>
The seller, American Project and Repair, is a leader in the facility maintenance space, with over 20 years of experience across the United States and Puerto Rico. Utilizing a vendor base of over 10,000 local licensed technicians and contractors, they have become the go-to source for facility maintenance for many Fortune 500 clients.
Ted Mastrucci, owner of AP&R, had this to say about the transaction: “When you are a small business owner, and you only get to do this one time in your life, you want to know that you have the best in your corner with you. I felt that way every day with Benchmark International. From our initial conversations until the deal was closed, Benchmark International was with me every step of the way. I worked with several people on the Benchmark International team along the way. Each one had a specific role, and then each one passed the ball on to the next person flawlessly. As a matter of fact, so well that I cannot remember a time where I had to repeat details or parts of the deal to them.”
The buyer, the Orion Group, is a field services company seeking to partner with leading family-owned service providers. Orion is building national platforms in the HVAC & plumbing, electrical, landscaping, and facilities maintenance sectors by investing in businesses with strong teams and cultures and creating unmatched growth opportunities for them. “Ted has created a unique interior service offering that prioritizes long-term relationships with service partners and advocating for customers. His industry expertise and commitment to excellence is inspiring and I am thrilled to welcome AP&R to the Orion FM platform,” said Isaiah Brown, co-CEO of Orion.
“It was a pleasure to work with Ted from AP&R. He was a quick study in the M&A process, and we are very thankful that he placed his trust with Benchmark International for the sale of his company. The Orion Group ran one of the most efficient due diligence processes and were true professionals throughout the transaction.” – Matthew Kekelis, Director, Benchmark International.
Americas: Sam Smoot at +1 (813) 898 2350 /Smoot@BenchmarkIntl.com
Europe: Michael Lawrie at +44 (0) 161 359 4400 / Lawrie@BenchmarkIntl.com
Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com
ABOUT BENCHMARK INTERNATIONAL
Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $8.25B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 14 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.
In the first quarter of 2022, global middle-market M&A activity maintained the momentum that we saw in 2021. Last year, lower and middle-market companies played major roles in deal-making activity. Companies of all sizes enjoyed significant buyer interest in sectors ranging from tech, transportation, healthcare, manufacturing, and logistics.
A notable imbalance in supply and demand in the lower and middle markets has been driving up the valuations of healthy companies in hot sectors. This trend is expected to continue through 2022 for strong companies in the lower and middle markets, especially in sectors such as healthcare, cybersecurity, cloud computing, artificial intelligence, and niche manufacturing.READ MORE >>
Benchmark International is delighted to announce the acquisition of Liverpool-based Notus by Warrington-based British Engineering Services.
Notus is an engineering consultancy specialising in the delivery of heavy lift and transport consultancy services, lifting assurance, and the planning and execution of lifting operations. Services are delivered across the energy, rail, defence, and construction sectors throughout the UK and Europe.
For over 160 years British Engineering Services has been engaged in the testing, inspection, and certification of industrial machinery via its highly skilled engineer surveyors and engineering consultants. The British Engineering Services Group team has grown considerably due to ongoing recruitment activity and acquisitions and now consists of almost 1,000 people.
The acquisition is British Engineering Services' seventh since 2019 and the second conducted via Benchmark International in the last two months.READ MORE >>
Benchmark International is pleased to announce the acquisition of both Access Plus and TrainingPlus to Briggs Equipment.
Operating from three sites in Scotland – Glasgow, Edinburgh and Irvine – Access Plus has delivered high quality powered access solutions to customers throughout the UK since 1998. The company manages approximately 700 powered access assets, which will help bolster Briggs Equipment’s comprehensive fleet of access equipment and increase coverage in Scotland.
Briggs Equipment is the exclusive national distributor in the UK for the Hyster and Yale ranges of forklift trucks and other materials handling equipment.
According to Pete Jones, Briggs Equipment’s managing director, the group has significantly increased its access equipment capability across the UK and Ireland with the acquisition, enabling the company to accelerate its powered access strategy and deliver a broader proposition to its customers. With the addition of TrainingPlus, the company has the opportunity to expand its existing training services.
George Marriott, Access Plus and TrainingPlus managing director, commented: “We are extremely pleased to be a part of the Briggs Equipment Group following confirmation of the acquisition. Our team can’t wait to get started and continue the ongoing development of our businesses in a strategic and progressive manner. The culture and values of Briggs aligns perfectly with us and we could not have picked a better parent company.
“Throughout the acquisition process the team at Briggs have conducted themselves in an exemplary manner and we are looking forward to working closely as part of the group moving forward. We are determined to maximise the potential of our business, whilst still delivering a great service to our customers and this acquisition will help us deliver on that ambition.”
Commenting on working with Benchmark International, Mr Marriot added: “I was guided to a successful conclusion with a world class expert, James Robinson, at Benchmark. My frustration with due diligence he took ownership of, his attention to detail was faultless and my experience was certainly exceptional. This was my first sale and "my baby" was comfortably delivered into caring hands. James managed the purchaser, my legal team, the accountants, my team and myself with a caring and surety - allowing me to understand the complexities of the deal, which helped me make better decisions along the journey.”READ MORE >>
After completing the sale of your business, there is typically a handover process between the seller and the buyer. One of a buyer’s most significant concerns when taking over a business is that the company’s performance continues as it was before the sale. When a seller is willing to stay on for a handover process post-closing, the buyer has increased trust in the business, resulting in the business selling more quickly and at a higher valuation. Therefore, it will be beneficial to both parties to plan this part of the process well and in advance of the time that the handover will take place. The length, compensation, etc., of the Handover period will be worked through during the Purchase Agreement negotiations. If there is a failure to recognize and offer an acceptable handover period for the business, it could cause a deal to fall apart while it is in due diligence.
Stages Of A Business Handover
The typical stages of a business handover are the Training Stage, Handover Stage, and Assistance Stage. Immediately following the sale, the seller will usually continue to run 100% of the business. During this time, the new owner will take some time to familiarize themselves with the business. Then, as the Training stage begins, the seller will slowly reduce their involvement while the buyer continues to increase theirs. In the Training stage, the seller must create a checklist of items that he can run through with the new owner. Mark each item as complete once it’s finished, and keep this for your records if you run into any issues down the road. It is a good idea to observe how a day in the life of your business typically goes. Take note of every payroll task you complete, every person you communicate with, any supplier or contractor documentation, provide copies of all budgets, information about cash flow, etc. Continue with this process until you feel that you have been able to document all of the particulars that the new owner will need to know in order to keep the business operating smoothly. As the seller trains the new owner, the seller will slowly start to reduce their involvement while the buyer continues to increase theirs. This sequence will continue until the complete handover is achieved.
During the Handover stage, the new owner runs 75%-100% of the business with the seller still on hand to help answer questions and ensure that processes are running smoothly. If you have had a successful Training stage, the new owner will have increased confidence in successfully running the business. This may matter to the seller as well, particularly if there are any deferred payments or earnouts that have been agreed to in the structure of the sale. It is imperative to train the buyer and put them in a position to be successful, as both parties benefit from doing so. The new owner will now be in charge of making crucial decisions and bringing innovative ideas and future plans for the business to the table. Customer and employee relationships with the new owner should be solidly in place at this point, and the seller should have very limited involvement in the day-to-day activities of the business.
Once the new owner is running 100% of the business, it is common to enter the Assistance stage, where both parties have made an agreement to remain in contact for a set period of time in case there are any questions that come up. While the seller is no longer directly engaged with the daily runnings of the company, it is best for them to make themselves available to answer any questions that the new owner might have. Many times the majority of this communication can be handled through email and phone conversations. An essential item to have established for this stage is the amount of time the new owner can expect to receive help from the seller, paying particular care to have the expectations and limitations outlined.
A properly planned Handover period can help the seller and the new owner is mentally prepared for the seller’s exit and help prepare the business, customers, and employees for the handover. Once the handover is complete and the seller exits fully, they can know that the business is in good hands. It is time for them to recover from and reflect on the ownership handover period and identify their next goal to get excited about.
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Knowing the structure of a transaction you are involved in is key to optimizing the composition of a deal. If you enter a proposed transaction thinking you understand the offer, you may be blindsided by various structures that may affect your net cash position. A critical aspect of a transaction is understanding the structure and what it means for you as a buyer or seller. Clients often believe that they agree to accept a stock transaction only to find out that the transaction will include an election that may affect their tax bill. A 338(H)(10) election is one of the more popular tax elections, but there are others.READ MORE >>
The global food & beverage services market is forecast to grow from $3,232.94 billion in 2021 to $3,678.61 billion in 2022. That represents a compound annual growth rate (CAGR) of 13.8%. Growth is primarily due to companies rearranging operations amid recovery from the COVID-19 pandemic that resulted in so many challenges for the industry. By 2026, the market is expected to surge to $5,235.52 billion at a CAGR of 9.2%.