Benchmark International is pleased to announce the transaction between Regatta Real Estate Management Inc (“Regatta”) and Fyve, LLC (“Fyve”).
Founded in 1994, Regatta is a Florida-based business headquartered in Miami. The company is a full-service real estate property management provider specializing in association management, investment property management, and condo conversions. Throughout its operating history, the company has remained focused on the small business, customer service-oriented approach.
Fyve is a nationwide, full-service real estate management solutions company that is redefining the experience for owners, residents, and tenants. Prior to the acquisition, Fyve had 11 locations across six states. With this acquisition, they will be able to reach into the Miami market and expand their Florida operations.
Senior Deal Associate Nick Woodyard at Benchmark International added, “It is always great seeing two companies come together where both parties can substantially benefit. It was a pleasure working with Tim and the Fyve team throughout the transaction. On behalf of Benchmark International, we wish both parties continued success.”
Benchmark International is pleased to announce the transaction between Regatta Real Estate Management Inc (“Regatta”) and Fyve, LLC (“Fyve”).
On April 30th, 2021, Benchmark International facilitated the sale of CPR Plus, LLC (serving the Greater St. Louis area) to Allied 100, LLC of Madison, WI.
The seller, CPR Plus, provides life-saving skills training to more than 100,000 individuals for close to 30 years in the St. Louis area. Their comprehensive and convenient CPR training courses are accredited by the American Heart Association and administered by friendly instructors with extensive experience.
The Covid pandemic has placed us squarely in unprecedented times. We know this is not exactly news at this point. However, counter to the tenor of most pieces you've probably read on the topic during the past 12 months, this one aims to shine some light on one industry that has thrived: The US healthcare market, more specifically, healthcare M&A. Healthcare M&A has generally been a big winner in 2020 and into 2021 and it's happening at both ends of the market.READ MORE >>
As anyone who has ever done it before will tell you, buying a company is a process. It can take anywhere from a few months to a couple of years to complete. To reduce uncertainties and understand the business as much as possible, buyers must conduct thorough due diligence and ask the right questions. Finances, potential synergy, liabilities, customer relationships, and key employees are just a few areas that the buyer should consider.
Here are five essential questions buyers should ask during management meetings when acquiring a company.
1. Why is now the best time for you to sell your business?READ MORE >>
In the GAMECHANGERS (ACQ5) 2021 GLOBAL AWARDS, Gregory P. Jackson, CEO of Benchmark International, has been named CEO of The Year in the area of Corporate Finance.
The ACQ is a leading corporate news publication serving the sector since 2003, with a global audience of more than 261,000 subscribers. The GAMECHANGERS (ACQ5) GLOBAL AWARDS celebrate achievement, innovation, and brilliance, recognizing the world's most outstanding organizations and professionals.
In the GAMECHANGERS (ACQ5) 2021 GLOBAL AWARDS, Benchmark International has been named the International Mid-Market Corporate Finance Advisory of The Year.
The ACQ is a leading corporate news publication serving the sector since 2003, with a global audience of more than 261,000 subscribers. The GAMECHANGERS (ACQ5) GLOBAL AWARDS celebrate achievement, innovation and brilliance, recognizing the most outstanding organizations and professionals in the world.READ MORE >>
The acquisition process can understandably be a very daunting task for sellers, let alone an uncomfortable experience that pulls back the curtains on their business and its most intimate information. Many sellers realize this is not their area of expertise and will make the informed decision to contract with a sell-side M&A advisory firm before officially entering the marketplace. The M&A advisory represents the seller, but can function as your ally as a buyer if you let them because they have incentive to get a deal done. Although M&A advisors can guide a seller through the sales process and educate them on market norms, they’re not capable of self-fabricating the comfort level between buyer and seller. Over time, a seller’s relationship with a potential buyer will prove to be most advantageous in getting to the finish line of a transaction, as there will be numerous items both sides will have to work through together. Unfortunately, agreements can fall apart due to a lack of mutual comfort between the buyer and seller, and this is typically a result of a combination of multiple factors set in motion long before official due diligence even began. The following are steps you should consider when working side by side with a seller during the transaction life cycle.READ MORE >>
Benchmark International is pleased to announce the acquisition of Dublin-based Smith & Kennedy Architects by RSK Group.
Smith & Kennedy Architects is an award-winning architectural practice specialising in contemporary design for national and international clients. The company was established in 1999 by Joe Kennedy, following his acquisition of a pre-existing firm, E.N. Smith & Partners, which enjoyed a long history in Dublin, having been established in the early 1960s with a specialisation in church and education projects. Following the change in ownership, Joe Kennedy began diversifying the firm’s practice, offering services in the design of offices, schools, houses and hotels.
Following the acquisition, Mr Kennedy will continue to lead the business as it joins RSK's European division under the direction of Nigel Board.
RSK is an integrated environmental, engineering and technical services business, operating in over 35 countries, with more than 6,000 employees and a proforma annual turnover in excess of £500m. It is currently actively investing in Europe, the Middle East, Africa and Asia Pacific, and has an active client base of over 8,000 organisations spread across these regions.
The acquisition of Smith & Kennedy Architects represents one of four acquisitions this financial year by RSK as it continues its vigorous buy-and-build strategy, and the third acquisition conducted via Benchmark International over the past two years, which included the acquisition of the group of Pellings companies and Ecologia Environmental Solutions.READ MORE >>
It’s no surprise that the COVID-19 pandemic slowed M&A deal activity overall in 2020. According to data from PitchBook, more than 2,000 transactions closed for a value of $336.8 billion in Q2 of last year. That represents a 41 percent decline in the number of deals from Q1. Yet, deals did pick up in the second half of the year, which is likely to continue, as businesses are poised for improved economic conditions that leave COVID-19 in the rearview mirror.READ MORE >>
Benchmark International is pleased to announce that Runcorn-based print industry firm, North West Roller Services (NWRS), has undergone an MBO.
Established in 1990, NWRS manufactures and distributes a range of consumable products for the flexographic, gravure and lamination industries. The company is the UK’s only manufacturer of fibreglass sleeves, which are marketed under the registered brand name ‘Easysleeve’, and exported to India, China, Italy and the USA.
The transaction was funded by a £1.5m equity investment from MSIF's AFM-managed Merseyside Loan and Equity Fund, alongside a debt package from ThinCats.
The new management team, led by sales manager Barry Dodgson, now have plans to "significantly increase" revenue levels and are targeting export markets as well as new product offerings.
The transaction followed the retirement of the previous shareholders and will see non-executive director Nick Owen join the board alongside Mr Dodgson.
Commenting on working with Benchmark International, Ian Antrobus, former managing director of NWRS, said:
“Although we had previously dealt with another broker for a period of three years without any success we were recommended to engage with Benchmark.
After entertaining many interested purchasers James Robinson secured an interested party and led us by the hand to finalise a successful sale on 06 April 2021.
May we thank James and all colleagues for their assistance in maximising the full potential of our business sale after thirty-one years in business.”READ MORE >>
Benchmark International is pleased to announce the transaction between ASAP Group (“ASAP”) and Terratest Group (“Terratest”).
Founded in 2006, ASAP is a leading foundation company specializing in a broad variety of shoring and foundation support methods, with a unique patented Sheetpiler™ technology that makes ASAP one of the premier shoring companies in Florida.
As a business owner, maybe you haven’t given much thought to selling your company. Or maybe you’ve bounced the idea around but not too seriously. It’s pretty common for business owners to think, “I have years before I plan on selling my business. Why would I worry about that now?” Well, here’s the thing. Life is unpredictable. Just look at how prepared the world was for the COVID-19 pandemic. We think it’s safe to say that no business owner was prepared for that.
But being prepared for the unexpected isn’t the only reason that it is important to have your business in “sale ready” shape at all times, even if you’re not ready to sell. If the company is not in ready condition, it could cost you financially. And it goes beyond that. Always operating your company as if you are ready to sell accomplishes several very beneficial objectives. It ensures that you are operating at peak performance with a focus on profitability at all times, and it helps you avoid being too late to the game to make the necessary changes to be ready to sell. A person’s priorities in life can change quickly or even gradually over a span of years, and you might not have the time to correct any issues that would impact the valuation of your company and, ultimately, its sale price. It’s important to remember that properly preparing a company to go to market can take years. When push comes to shove, if you end up in a situation where you need to sell, not being ready can be a costly mistake.READ MORE >>
Benchmark International is pleased to announce the acquisition of Coventry-based PBX Hosting by TelcoSwitch, a provider of hosted voice, unified communications and compliance solutions, in a £4.5m deal.
Founded in 2007, PBX Hosting delivers hosted UCaaS solutions to offices and contact centre environments through its base of channel partners. The company will continue to trade independently post-acquisition given its strong regional brand presence, but its capabilities will be enhanced due to an increased headcount from within the TelcoSwitch Group across sales, account management, support, DevOps and marketing.
PBX Hosting’s channel partners will also benefit from access to the growing UCaaS product portfolio of the wider TelcoSwitch Group. Moreover, the acquisition further boosts the technical proficiency of TelcoSwitch due to PBX Hosting’s management team and staff remaining in place, and provides TelcoSwitch with a regional office in the heart of the UK.
The acquisition is TelcoSwitch’s second of 2021, following the OneVoice deal announced in January.READ MORE >>
NOVA Engineering, Inc. is a State of California Disabled Veteran Business Enterprise (DVBE), a State of California Small Business Enterprise (SBE), a City of San Diego Small Local Business Enterprise (SLBE), and a Service-Disabled Veteran-Owned Small Business (SDVOSB). NOVA Engineering offers the experience of a unique team that brings the enthusiasm and energy of a seasoned firm, tempered by the high level of skill and professional relationships that can only be built through long-term experience. NOVA Engineering provides professional consulting services, including planning, civil engineering, surveying, and stormwater services for San Diego County in California.
NOVA’s team brings extensive experience in providing property, construction, and topographic engineering and surveying services to the San Diego market. They provide responsive, professional service, which has earned them the privilege of working with many clients time and time again.
The high net worth individual that acquired the firm is the principal engineer of two Southern California based consulting firms offering civil engineering, surveying, and planning services. The acquisition of NOVA Engineering allows the acquirer to consolidate the practices to offer a more comprehensive suite of services to the greater San Diego Metropolitan Area.
READ MORE >>
In reference to the transaction, Danny Barnett, President of NOVA Engineering, explained his experience with Benchmark International, “Benchmark International was a huge help in brokering the sale of our company. From the front end marketing to the back end deal closing, the deal team was constantly in communication about new buyer interest and providing suggestions based on their breadth of deal experience. Most importantly, they were reachable. Every phone call and email we sent was always answered in the same day.”
Sam Stallings, Associate at Benchmark International, stated, “Our client continued to stress the importance of the acquirer’s cultural fit with NOVA Engineering as it was a top priority for our client to be confident that the firm would be left in good hands. Like many business owners within the lower-middle market, NOVA Engineering wanted to ensure that the clients, company, and employees would continue to work with a firm that shares the same vision and values as NOVA Engineering. Our talented deal team quickly sought out a buyer motivated by the client’s footprint and reputation in Southern California. The team’s achievement in identifying a strong cultural fit and seeking an above average multiple for our client is the culmination of tireless teamwork and relentless pursuit of preeminence in the marketplace. We are excited for both parties and wish them the best of luck with their future endeavors.”
Benchmark International is pleased to announce the merger between North East Lincolnshire chartered accountants Blow Abbott and A P Robinson & Co.
Established in 1967, Blow Abbott is a ICAEW chartered accountancy practice and payroll service provider for SMEs, providing a turnkey service including final and management accounts, and cloud accounting software management.
A P Robinson & Co is a well-established firm of chartered accountants and business advisers providing accountancy, taxation and business advisory services to a wide range of business and private clients across Lincolnshire and Yorkshire.
The new firm is expected to be at the forefront of technological progress and offer clients an ever-broader portfolio of services to support, guide and grow their business and profit.READ MORE >>
The value of a company extends beyond the amount of revenue it generates. As a business owner, you should be monitoring the value of your company at all times, but it is especially important if you are considering exiting or retiring within the next several years, or even up to a decade from now.
Company valuations are based on far more factors than just financial statements and multiples. The process involves the forecasting of the future of the business based on several key value drivers. Sometimes these can be sector-specific, but there are many core drivers that apply to any type of business, as outlined below.READ MORE >>
People like to sound smart on the golf course. It’s one way to distract others from your golf game. Since finance and investing are popular subjects of discourse out on the links, there is always opportunity for high-minded musings on business topics. One evergreen theme revolves around the “M&A cycle.” More specifically: “Where are we in the “M&A cycle?” Is it heading up or down? Is the “M&A cycle” about to end?”
The first question above is an important one, which we will address. The second two—both very common—do not seem to grasp the nature of a “cycle,” or even what a circle looks like. In any case, what precisely makes the topic so endlessly fascinating and useful for the golf course is its totally subjective and nearly nonsensical nature as a framing concept for making buy/sell decisions. If our financial reality were truly an endless loop with defined and unchanging points to exploit around that loop, the cadence of our lives as entrepreneurs, investors, and advisors would certainly look a lot different. We would simply place our bets at certain points at the beginning of each year, later picking them up at different equally obvious points. What a world that would be!
The bad news is that there is no such reliable cycle to lean against. But there is good news for business owners considering an exit or seeking financial partnership:
- There are always opportunities in any market to maximize deal value.
- Companies and sectors can benefit from opportunities during any market conditions.
- The time is, therefore, never simply “right” or “wrong” to bring your company to market.
Let’s look at some of the most common platitudes around the “M&A cycle.”
Platitude #1: An Economic Downturn Will Drive Deal Volumes Down
This might be true on a net basis at the most macro level, but if you’re a business owner or manager contemplating a partnership or exit, that macro perspective is borderline meaningless to you. First, let’s counter this argument with another handy platitude: “There’s always a bull market somewhere.” The key to playing any macro market—whether it is up or down—is to understand where the fast streams lie within that context. No individual business trades as a proxy to the entire market, and during any downturn; for example, there are bullish sectors that offer sellers opportunities to engage buyers at a potential premium.
On its face, while declining deal volumes sound like a negative reality, such circumstances often provide successful companies with higher market visibility as buyers seek a retreat to value in less speculative times. While bull markets have a way of covering all manner of sins from a buy-side valuation perspective (allowing for more risky bets on less fundamentally sound companies), less go-go markets tend to favor higher degrees of prudence. This allows great companies to get second looks and can drive valuation rewards to sell-side companies positioned for consistency, growth, and opportunity capture.
Platitude #2: My Company Won’t Get the Attention It Deserves in a Hot Market
This is basically an opposite concern of that articulated above. The worry here is that when markets are really moving and M&A is up, competition among sellers will drown out great companies, as buyers seek to capture the upside of higher-beta bets. An important thought regarding this opinion: think through who your buyers really are—and how they buy. While it is empirically showable that macro risk-taking increases during a bull market, once again, no single business really operates as a proxy to macro trends, and few discrete buyers are a caricature of the aggregate. There are, for example, numerous family offices and value-oriented funds looking to pick up high-quality small- and medium-sized businesses in all market conditions. These are buyers whose default position is “no” regardless of what others are doing, but who will come to the table ready to transact for real value—no matter what the rest of M&A land is doing during any given period.
Platitude #3: I Need to Wait for the Next Economic Cycle to Bring My Company to Market
This is perhaps the most perplexing assertion that we hear, and it always requires a bit more teasing out. In its purest form, this notion tends to be a distillation of the previous two platitudes—namely, that the time is currently not right to sell (because the market is too hot or too cold) but the time will be right to sell later (because the market will be hotter or colder then). Stepping back, it’s instructive to reflect on what buyers are really seeking in the middle market. Hint: it’s not speculative upside. Rather, middle-market buyers are seeking opportunities to capture value created by successful entrepreneurs who have built great companies with lasting power (and, yes, upside to boot). These qualities are not cycle-dependent, so neither should be your decision to come to market.
A Better Way to Play
Trying to game the notional “M&A cycle” is not a constructive approach to taking your company to market. In all macro market environments, there are excellent opportunities for both buyers and sellers. Maximizing deal value starts with building a thriving, solid company. A thoughtful approach to your exit or partnership is far more critical than theoretical market gyrations to producing a successful outcome.READ MORE >>
Benchmark International is proud to once again have had the privilege of partnering with PCrefurb to donate an ICT suite to White Bridge College in Tameside.
A recent IT audit by the school revealed that there are a significant number of students without access to the internet or an electronic device of their own where they live. The recent government Covid-19 laptops for vulnerable students scheme assisted some, but many still remain without the access they need to engage with online learning.READ MORE >>
The business acquisition process consists of various stages. Taking the broadest view, the process leading up to the close of a transaction typically entails an initial assessment stage, and a more formalized due diligence period during which the buyer often performs a quality of earnings and legal due diligence exercise.
Many business acquirers have enough commercial and financial insight to enable them to evaluate whether they wish to acquire a business during the initial assessment stage and at what price. Prior to transitioning to the more formalized due diligence phase, the parties in an M&A transaction typically agree on a Letter of Intent (LOI). Although it is important to get the LOI right because it essentially lays the foundation on which the transaction should proceed, first-time business buyers are often unnecessarily intimidated by the task of formulating the LOI. Buyers can be generally confident they are taking the right approach to the LOI if they take care to understand the key purpose of the LOI and bear in mind a few simple commercial tips. In fact, when done right, properly crafting an appropriate LOI can help a buyer set themselves apart as a capable buyer, particularly when the seller is receiving multiple offers or there is a formal competitive bid process.
First, it is important to understand the key purpose of the LOI and to realize its scope and limitations. At a high level, the purpose of the LOI is to establish the key commercial terms of the business sale agreement between the parties, and to provide the framework on which the transaction can proceed according to the parties’ agreement. Also, the LOI will serve as the cornerstone document for the lawyers to draft the definitive transaction documents. A helpful LOI will not only specify the commercial agreement between the parties (for example, setting out the purchase price and the types of consideration if there is structure in the deal), but also provide a roadmap for key milestones or conditions to be completed by the parties in order to reach a successful close. The LOI needs to have enough detail to provide an appropriate framework, but it will typically not capture every single transaction detail. Naturally, there is a delicate balance between having enough information to provide a framework on which the deal can proceed, and not being too over detailed so as to prematurely freeze the deal discussions. An ideal LOI should contain enough information to reflect the parties’ agreed commercial terms and also provide a roadmap for the steps to be completed for the transaction to take place.
First-time buyers conducting online research are also often confused by different terminology concerning preliminary acquisition documentation. While there can be certain differences between LOIs, Indications of Interests, Heads of Terms, and Term Sheets (to name a few forms of initial acquisition agreements) depending on the jurisdiction, purpose of the agreement, or stage of a formalized M&A process, these types of documents share a lot of common principles and sometimes serve the same function. In the lower middle-market M&A space in the U.S., the majority of initial acquisition documents are formulated as an LOI.
Letters of Intent can be as short as a single page, or as long as several pages. The length of the LOI, as well as the types of provisions and level of detail in each section, depends on the deal specifics and preference of the parties. At a minimum, most LOIs contain:
- Information about the specifics of the type of proposed transaction (for example, whether the prospective transaction will take the form of a stock or asset deal)
- The purchase price
- Types of consideration if the transaction involves structure
- Conditions to close
- Other commercial or legal provisions the particular parties may wish to specify
Although LOIs are generally commercially viewed as non-binding in nature, buyers and sellers should take care to specify whether any particular provisions of the LOI should remain binding even if the prospective transaction fails to materialize. For example, although a buyer may wish to specify that it is not required to transact a close in the event a condition precedent is not completed, the seller may wish to specify that the buyer will be bound to keep sensitive information learned about the seller’s business confidential even if the transaction is not completed. Specifying which provisions, if any, shall remain binding on the parties can help avoid unnecessary confusion.
While the LOI may be non-binding in nature, this feature should not encourage the buyer (or the seller) to punt difficult or contentious items to a later stage in the transaction if they can be agreed at the LOI stage. Typically, parties best serve transactions when the difficult issues are resolved between them as early as possible. Commercial experience has shown that the parties that try to approach the LOI as if it were “fully binding” and address the difficult or controversial issues upfront are more likely to have a smooth transaction because the tough deal points are sorted earlier in the process. In addition, if it turns out there will be a sticking point between the buyer and seller, it is typically in both parties’ favor to have that issue addressed as soon as possible. If in dealing with the difficult issues an insurmountable deal sticking point is revealed, the buyer will not waste unnecessary time and resources on an unrealistic transaction. This will enable the buyer to more swiftly move on to other potential opportunities potentially enabling them to realize an alternative transaction sooner. Likewise, the seller also benefits from this approach because the sooner a deal stopper is identified, the more time and resources the seller saves compared to wastefully engaging with a buyer who will not acquire the company. Of course, not every deal point can be agreed in final detail at the LOI stage, but as general rule of thumb, addressing the heavy issues as early as possible can help lighten the work later in the transaction process.
Buyers can help themselves avoid an unnecessary deal breakup by understanding the seller’s mindset. In fact, buyers who proactively address points important for the seller in the LOI can build up goodwill towards the seller and help themselves standout as a capable buyer. For example, sellers are typically hesitant to agree on an exclusivity provision in the LOI which prevents the seller from engaging in discussions with other prospective buyers while the signing buyer engages in due diligence. A buyer which, from the outset, proposes an ambitious but realistic due diligence period with a limited exclusivity provision demonstrates an appreciation for the seller’s concerns and exhibits drive to peruse a swift transaction.
Also, savvy sellers understand the LOI will not capture all the details. As a result, sellers are likely to engage in discussions with the buyer about the reasoning and thinking behind the buyer’s provisions in the LOI. Buyers should be familiar enough with their proposed terms to be confident to have a meaningful commercial discussion with the seller. For example, if a buyer offers an exceptionally aggressive price based on limited information about the selling company, the buyer should be prepared to provide details on how they value the company. Otherwise, the seller will be forced to ponder whether the deal is too good to be true and may become unnecessarily overly skeptical. While not every detail needs to be spelled out in the LOI, the buyer’s proposed deal terms need to make sense. For example, if a proposed transaction will involve an earnout component subject to conditions, buyers could better position their offer by providing information on the earnout parameters, including information on how the earnout payment can be achieved.
Bearing these key points in mind should help buyers be less apprehensive about the LOI process. Indeed, the LOI is also often subject to various rounds of markups, so the buyer should be prepared for counter-comments but shouldn’t be shy about starting the negotiating process in writing. It is helpful to put the ideas on paper to allow the parties to focus on the key deal specifics. Putting forth a proper LOI in the first draft will show that you are a professional buyer and will ultimately help set the stage for facilitating a smooth transaction process.READ MORE >>
Benchmark International is pleased to announce the sale of Warwickshire-based 81G to cyber services provider, Babble.
81G provides fully managed IT support and services to SMEs. The company manages IT infrastructure for companies with no internal IT department, or those looking to complement their internal IT department.
Founded in 2001, Babble is a technology partner that deploys cloud solutions. In 2020 the company was valued at £90 million after rapidly growing annual revenue to £30m. Babble is backed by private equity partner, Graphite Capital, and the purchase of 81G is Babble's third deal in three months and the seventh since the start of 2020.
Matt Parker, Chief Executive of Babble, said: "The talented team at 81G Blue shares our ambition to enhance customers’ agility, efficiency and profitability and we’ve no doubt they’ll add significant value as we continue to strengthen our cyber business unit.
"Our buy and build strategy has continued at pace in 2021. We have more acquisitions in the pipeline, as we seek high quality, innovative businesses that have the potential for further growth."
Speaking on working with Benchmark International, Samantha Gibbs, Managing Director of 81G, said: "Every step of the way the Benchmark team comprising of the bright, positive and proactive Erica Skittrall, alongside her colleagues Andrew Roberts and Jonathon Parkinson, who are both consummate professionals and expert advisors, were by my side making sure that the negotiation was completed in the most fair and equitable way for my business to go on its next journey. Following a short, sharp but intensive due diligence process, the business sale was completed. If I had ever doubted using a broker, I am a convert, and if you are wavering to use a broker reach out to Benchmark first. I can't recommend them highly enough.”READ MORE >>
Have you always dreamt of owning your own business? What about having your boss’ job? If you are in management and in a privately owned company, it might be possible for you to be the boss and the owner one day. However, many mid-level managers do not know how to accomplish their dream of owning a company that currently employs them. The good news is that your dream can become a reality.
One of the challenges of transitioning from an employee to a business owner is thinking like a business owner. As an employee, your manager/owner provides guidance, and often you may not question the guidance. As a business owner, you make all the decisions, set goals, and create a plan that will drive the future of the company. Then, you will be the one that has to drive and financially fund the vision. Yes, you will develop mentors around you, but as a business owner, you are the one that benefits and suffers from the positive and negative outcomes of your decisions.
While you may work long hours currently, be prepared for a more immense workload and additional hours. Employees have a work schedule, and business owners that operate the company do not have work schedules. You are on call 24/7, and it is hard to get away from the business as you always carry that burden with you. Vacations are interrupted and weekends are often spent at the business. However, if you are in a place in your life where you can dedicate the required time, mentally and physically, to the business, the long term pay-off, whether it be financial or time freedom, can be significant.
Interview your owner and shadow him/her if possible. Ask the company owner for insight into their day. Understand the stresses that the business owner deals with daily. Some of the stresses will be confidential, such as employee issues or financial issues, so anticipate that your receiving limited insight.
Then commit to making your dream a reality. Ask the business owner their exit strategy. Some owners may be open to a slow exit where you can purchase the company over a few years, or they may want a clean exit where you have the option to purchase the company immediately and the current owner walks away after a short handover period. Having an introductory conversation about your interest in purchasing the company is going to be important. Once you understand the business owner's personal goals regarding their exit, it will allow you to structure a deal to achieve both parties' goals.
It is important to prepare your financing so you know how much you can afford. This knowledge is key to structuring an offer. The business owner will need to share the information around the business' performance for a bank to underwrite an acquisition. The company's current banker might be a good starting point. After your conversation with the business owner, ask if they would be open to making an introduction to the company’s banker. The banker understands the business and risk as they have underwritten the business previously. Their goal would be to underwrite the business to incorporate the new ownership.
Be patient and ask for help when needed. Purchasing any business can be an emotional process. If you have never been through the process previously, you may need to seek help from your advisers or hire an experienced buyer side M&A advisor. There are many resources available to you to help with the purchase.READ MORE >>
Working capital, also referred to as net working capital, is the measure of a company's liquidity, operational efficiency, and short-term financial status. It is the difference between a business’s current assets, its inventory of materials and goods, and its existing liabilities. Net operating working capital is the difference between current assets and non-interest-bearing current liabilities. Typically, they are both calculated similarly, by deducting current liabilities from the current assets. So, essentially, if a business’s current assets total $500,000 and its current liabilities are $100,000, then its working capital is $400,000. But there are a few variations on the calculation formula based on what a financial analyst wants to include or exclude:READ MORE >>
Trufora, brings a new standard to dermatology by providing the market with skincare products that contain ingredients proven to be effective, safe, and non-irritating, and used at levels proven to achieve a visible, clinical benefit. The company provides products that allow every woman to feel confident, inspired, and beautiful in their skin. The products are made to simplify a women’s route and life with fewer steps but more results. Their consumer skincare line is free from more than 1,300 known toxins.
Trufora’s skincare line has been a featured product for HSN, Birchbox, and Ipsy to name a few. The company has also launched a membership model allowing customers to have access to their favorite Trufora products at a discounted price.
A critical element of completing this transaction was identifying and marketing to a variety of potential acquirer classes on behalf of Trufora. We were pleased to see that three very different strategies each produced at least one eager acquirer to submit an LOI to acquire Trufora. One of the buyers had a marketing background heavily tied to Amazon, one of the platforms Trufora utilizes for its products. Another buyer was from China and looking to acquire a US brand to help increase their Asian beauty empire. The third buyer, Genesis Group, was an interesting fit given, its founder, Artem Mariychin’s background in the consumer predictive analytics space. Trufora believed that the partnership with the Genesis Group was the best fit for the future of the company and is positioned to grow the company to the next level. This supports the notion that the obvious buyer or the usual suspects are often not the best prospects.
The Genesis Group was founded by Artem Mariychin with the goal to invest in opportunities that could benefit from his experience. Artem is the co-founder and CEO of Zodiac. Nike acquired Zodiac, a predictive analytics company, in 2018. While CEO of Zodiac, Artem built a company that provided retailers with a tool to predict the long-term value of each customer instantly and accurately, also known as the customer’s zCLV or Zodiac’s Customer Lifetime Value. Marketers use the zCLV to discover who their future highest value customers will be so that they can retain those valuable customers long-terms and acquire similar customers.
Prior to Zodiac, Artem worked at Goldman Sachs, Highbridge Capital, 3G Capital, and Perry Creek Capital.READ MORE >>
The acquisition process can understandably be a very daunting task for sellers, let alone an uncomfortable experience that pulls back the curtains on their business and its most intimate information. Many sellers realize this is not their area of expertise, and will make the informed decision to contract with a sell-side M&A advisory firm prior to officially entering the marketplace. The M&A advisory represents the seller, but can function as your ally as a buyer if you let them because they have incentive to get a deal done. Although M&A advisors can guide a seller through the sales process and educate them on market norms, they’re not capable of self-fabricating the comfort level between buyer and seller. Over time, a seller’s relationship with a potential buyer will prove to be most advantageous in getting to the finish line of a transaction, as there will be numerous items both sides will have to work through together. Unfortunately, agreements can fall apart due to a lack of mutual comfort between the buyer and seller, and this is typically a result of a combination of multiple factors set in motion long before official due diligence even began. The following are steps you should consider when working side by side with a seller during the transaction life cycle.
Be transparent with your background information in the beginning.
This is a very important first step, and it sets the stage for how trustworthy the seller will perceive you to be going forward. Be prepared to sign an NDA before receiving any confidential information from a seller, as this is a customary measure taken to ensure you bear some level of legal responsibility around any and all sensitive information the seller turns over to you. Understand that the seller is handing over their most private information and they need assurances from you the information will not be used against them by a competitor. With your NDA, make sure to include background information on yourself, your company, your intentions, and your interest in the seller’s business. Take this as an opportunity to highlight your achievements and accomplishments, speak about your goals, and so on. Sell the seller on why they should view it as an honor that you have expressed an interest in their business.
Take advantage of introduction calls.
Once you’ve gotten past the NDA stage, you will receive a small sample size of a seller’s confidential information. The next step should be an introduction call for both parties to get to know one another on a more personal level. These first calls are meant purely to be introductory in nature, and fairly high level, considering this will be your first chance to speak with the seller. Be willing to field a high number of questions from the seller as this presents another opportunity to highlight yourself, your company, your intentions, and your goals. On the contrary, sellers are proud of what they’ve built, and will be more than willing to discuss their company’s history, struggles, achievements, etc., so be sure to keep an open ear when they speak. Ask open-ended questions and build dialogue. One last but very important item to keep in mind is that every seller has a goal they’re looking to achieve by selling their business, and it’s typically more than a specific dollar figure. Some sellers are looking for a full sale to move into retirement, while others are looking for a partner to infuse capital and new growth ideas, among countless other scenarios. Listen closely to a seller’s intentions as they go beyond the monetary value of a transaction.
Make data requests with care.
As you delve deeper into a seller’s business, you will at times need to request additional information. Sometimes information you requested in the past leads you to new questions. Perhaps your review of the previous three years of financial records leads you to want to review the past five years. Or maybe you heard the seller discussing expected growth on your introduction call so you would like to see their proforma for the next year. Regardless, with each passing data request, more questions will arise from a seller as to why you are requesting this information. Make sure to always explain your reasoning behind each request you make for additional information, and always remain understanding of a seller’s sensitivity around releasing confidential information. Sometimes it’s best to facilitate data requests through a sell-side M&A advisory if the seller is using one. This advisor should be viewed as your ally and can assist in explaining market norms regarding data requests to the seller.
Remember the importance of site visits.
At some point, back and forth via email and phone calls will no longer suffice. Take the initiative with a seller to be the first to suggest an in-person meeting. Be prepared to travel to the seller and field your own travel expenses. If the seller suggests meeting halfway, or accommodating you on your visit, consider this an added bonus to you. A site visit presents the greatest opportunity to build further rapport with a seller, and put a name with a face. There will be conversations you can have in-person with a seller that can be more challenging when done virtually. This will also give you the opportunity to potentially see their operations, facility, location, etc., provided that you are meeting at their location. Remember, there could be possible limitations during your visit as the visit may need to be conducted after-hours and you probably will not be afforded the opportunity to meet the company’s employees. Though not necessary prior to a formal offer, a site visit is a very critical piece of the transaction lifecycle, and should never be discounted.
Submitting and negotiating a formal offer.
Once you are comfortable with your knowledge about a seller’s business, you will be in a position to submit a formal offer. Chances are, your first stab at a formal offer will fall short of a seller’s expectations, so don’t take offense, just remain flexible. Always remain willing to work with a seller towards an agreeable offer for both parties, while maintaining respect. Sometimes buyers and sellers can “outfox” themselves by overthinking the presentation and discussion of offers. Try to cut down on gamesmanship and be straightforward with your intentions. Oftentimes, sellers will have questions regarding topics such as your funding capabilities, and timing. Perhaps you might consider listing out deadlines for yourself in a formal offer that will give the seller assurances you will stay on target. These deadlines could involve a maximum number of days to produce a first draft of a purchase agreement, first draft of an employment/transition agreement, proof of funds, and so forth. Lastly, and this goes without saying, always operate in good faith with formal offers, and never enter the official due diligence phase with intentions not clearly defined in the offer you mutually execute with a seller.
Passing on the opportunity.
Unfortunately, not every transaction is meant to happen, and sometimes this cannot be determined until much later in the process. At some point, you as the buyer may decide an opportunity is not going to work for any number of reasons. The seller will want to be informed and understand why you no longer wish to move forward with them. In some scenarios, the seller may already understand, but giving them details as a courtesy is appreciated. Regardless of the reasons, always make an effort to communicate this in detail when walking away from a possible deal. It could prove to be worthwhile to maintain a relationship post discussions as well. Keep in mind, as you go further down the road with a seller, you will become privy to more confidential information, you will build a deeper relationship, and expectations naturally begin to take shape. The level of detail you provide on the reasoning for your pass should always line up with how much time you have spent on the opportunity and working with a seller.READ MORE >>
Maybe you’re not sure if you are ready to sell your business, but you’re curious about what you could learn if you put it on the market. You can always put your company on the market at any time, but you should understand the right way to do it, and everything that you need to consider.READ MORE >>
What Does It Take to Complete 52 Transactions in 52 Weeks?
2020 brought us all a huge amount of uncertainty. From an unexpected global pandemic to an election year, business owners tooling with the idea of a transaction were skeptical of success and market interest. With immense challenges presenting themselves, Benchmark International US offices took the year by the horns and hit another record year of completed transactions.
Following their 2019 accomplishment of 40 successful deals, Benchmark International’s US transaction teams saw the opportunity to take it one step further, completing 52 domestic deals. This is a 33% growth rate in the midst of one of the most trying economic environments to date.
The question here is: What does it take to complete an average of one deal per week, every week, in the midst of a global pandemic?
Keep the Consistency
The five US transaction teams showed consistency when working with our clients, no matter the deal size or time on market. Being industry agnostic allowed Benchmark International to bring a wide range of companies to market in 2020; from quick deals to major transactions, the team displayed prodigious work ethic to find the perfect fit for their clients.
COVID-19 tested global corporate environments, but Benchmark International adapted to the temporary work from home changes with ease. Distractions while working from home could have easily altered the company's success, but with virtual communication and determination to find the best for our clients, the team proved resilient. Benchmark International’s 2019 modernization of its tech systems, from top to bottom, paid off handsomely. A new CRM, the move to cloud-based storage, and widespread adoption of Microsoft Teams for inter-office communications all occurred in the first months of 2020, just in time to a two-month work from home period, a minor annoyance as opposed to a hinderance.
Both buyers and sellers saw a shift in focus when COVID-19 hit challenging the way M&A firms traditionally go about business. It took tedious due diligence amongst the five transaction teams to ensure the value of the companies represented was preserved.
2020 financial concerns are guaranteed to be on business owners' minds when moving into conversations regarding a full/partial sale in 2021. There is not yet a "market standard" on COVID-19 "add backs." However, owing to the breadth of its transaction experience both domestically and globally over the last year, Benchmark International is helping to shape that emerging standard, pushing for fairness to sellers wherever possible and reminding buyers that their true interest lies in determining how the business will perform under normal circumstances..
Stick True to the Foundation of Benchmark International
Benchmark International was formed on the ideology that every business is a family business. The dedication demonstrated by everyone at the firm (from analysts to directors to executive leadership) is what stands this team apart from their competitors. Sticking to the robust business model originally set forth by the founders, Benchmark International was ready and able to handle challenges that were unrecognizable prior to the year 2020.
As Benchmark International continues to set records statewide, the notable accomplishments extend beyond that; for SIX years in a row, the company as a whole completed 100+ transactions per year. This shows that geographical location, although important, doesn't outweigh work ethic, consistency, and resilience amongst a team like Benchmark International.READ MORE >>
Benchmark International HQ is currently participating in the Keep Tampa Bay Beautiful initiative, specifically the Adopt-A-Road program for the next two years to promote environmental stewardship, team building, and to keep our city and streets beautiful.
The Adopt-A-Road program is a great opportunity for corporations to give back to the community through stewardship of public right-of-ways, parks, and shorelines. Adoptions greatly enhance the appearance of our communities and go a long way in reducing litter and debris from entering our waterways and polluting the natural habitats of our native wildlife.
The Tampa office has officially adopted the stretch of road from W Boy Scout Blvd/W Columbus Drive, and as part of the program, is responsible for at least four cleanups a year.
Recently, the Tampa office participated in its first official cleanup of 2021. There were 15 volunteers that split up into two teams that covered the two-mile stretch of road to pick up debris, enjoy the Florida sunshine and fresh air, and got to wear very fashionable safety vests and use trash grabbers.
The staff was able to enjoy an afternoon of team bonding, cleaning up for a good cause, and remembering in the process to keep Tampa beautiful.
The goal is to have the entire office volunteer over the year to get to know their team members more and again give back to an amazing cause.
Benchmark International is honored to be a part of this initiative and looks forward to the upcoming Keep Tampa Bay Beautiful cleanups in the months to come. Learn more about how you can support or get involved with Keep Tampa Bay Beautiful - https://www.keeptampabaybeautiful.org/
About Keep Tampa Bay Beautiful
Keep Tampa Bay Beautiful is an environmental nonprofit organization. Our mission is to promote a culture of environmental stewardship through volunteer and educational opportunities. Our focus areas are conservation, waste reduction, and beautification. Keep Tampa Bay Beautiful provides a unique experience for individuals to make an impact in our community. We offer a variety of service projects to work with groups of all ages.READ MORE >>
Benchmark International is pleased to announce the transaction between Liverpool-based, The Bookyard, and London-based Restore.
Established in 2006, The Bookyard is a specialist recycler and supplier of service parts, tools and accessories for Apple computers and devices.
Restore is an AIM-listed document management, shredding and computer recycling company, providing its services to offices and workplaces in both the private and public sectors.
Representing another milestone in Restore's strategy for growth via organic expansion, strategic acquisition and margin improvement, the transaction is designed to further strengthen Restore's capability in the growing recycling market for Apple goods.READ MORE >>
One of the more complex components of an M&A transaction is a seller’s net working capital, hereinafter referred to as working capital. Working capital is a financial term used as a measurement of a business’s ability to meet its financial obligations over the coming business cycle (typically 12 months). The consideration of working capital is typically performed during the due diligence period. The calculation of working capital requires the assessment of two areas: current assets and current liabilities.
- Current assets are the assets of the business that the owner(s) anticipate using for normal operations within the next business cycle. The most significant components of current assets are typically cash, accounts receivable, and inventory.
- Current liabilities are the obligations of the business that the owner(s) anticipate satisfying within the next business cycle. The most significant components of current liabilities are typically accounts payable, accrued expenses, and the current portion of the business’s debt.
The logic of corporate finance works on the premise that current assets are used to pay off current liabilities. While working capital is not defined under the Generally Accepted Accounting Principles (GAAP), it is commonly calculated using this formula:
Working Capital = Current Assets – Current Liabilities
Why does working capital matter?
As previously mentioned, working capital is used as a measurement of a business’s ability to meet its financial obligations over the coming business cycle. Another way to consider working capital is that it is a measure of a business’s liquidity. A liquid business should not have problems meeting its short-term financial obligations if all things remain constant. It is unlikely that the owners of a liquid business will be required to invest additional capital or seek outside financing (e.g., debt) to satisfy the needs of the business in the subsequent 12 months.
How much working capital is the right amount?
If a buyer and seller agreed that $2,000,000 is an acceptable working capital level, and a seller delivers lower working capital to the buyer, then often there is a mechanism in the purchase agreement to lower the purchase price of the business. The reduction would generally be dollar-for-dollar (i.e., each dollar required to get the working capital to an acceptable level will likely lead to a dollar reduction in the amount to be paid to the seller). Conversely, if the working capital is higher than what is agreed on as the acceptable level to provide at closing, then there often would be a dollar-for-dollar increase to the purchase price to the seller.
The letter of intent typically clarifies the buyer’s expectation with regard to the required level of working capital to be left in the business, or the proposed methodology in determining working capital. Often, though, working capital is a point of negotiation up until finalization of the purchase agreement. There are a variety of options for setting the agreed upon working capital, but these are the two most common methods:
- The buyer will want some number of “months” as a cushion. If the business’s total expenses for the year are $1,200,000 and the business will be expected to spend $100,000 per month, then a buyer wanting “three months of cushion” for this business would thus require working capital to be at least $300,000 at closing.
- The buyer will want the working capital to be equal to “historical levels.” Historical levels can be calculated by averaging the working capital on each of the previous 12 months’ balance sheets.
Both methodologies provide a guideline in arriving at an acceptable level as part of negotiation between the buyer and seller. No two businesses or deals are alike, but a company’s working capital—just like the various line items from which it is drawn—are assets of the business and, as such, represent part of what is to be sold.
What can the seller do about working capital?
In the event the seller has his/her mindset on what to exclude when the sale occurs, the seller should work with its professional advisors to determine whether the specific items that could be removed from the proposed working capital terms and how that will impact the deal structure. In doing so, the seller must keep in mind that the specific item may be considered by the buyer as necessary to keep the business generating revenue—and if so, he/she might view the retention by the seller as something having a major impact on valuation. If, on the other hand, the asset is not deemed as useful to provide a reasonable buffer for “months of working capital” or a similar metric, or to be used for a specific business function, and its absence will therefore not impact operations nor require the buyer to invest additional capital into the business, the asset can typically be removed with little effect on valuation.
When addressing working capital, it’s important for the seller to always consider the total cost of the deal to the buyer and the buyer’s perception of the risk associated with the business. This is key area of negotiation, and understanding the different methods to determine working capital and what is important for both the seller and buyer is a critical element to reaching a successful close.
READ MORE >>
The COVID-19 pandemic has impacted businesses of all sizes, affecting the value of many of those businesses. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was created by the U.S. government to get businesses through the pandemic, and includes the Paycheck Protection Program (PPP), which is designed to give private businesses access to cash so that they can continue to pay employees and cover other expenses, such as health insurance, rent/mortgages, and utilities, over a 24-week period. The loans contain provisions for forgiveness as long as the company meets certain requirements and certifications. The PPP loan and its associated forgiveness have impacted how company valuations should be determined for the recipients.
For company valuation purposes, there needs to be an understanding of the reasons that the business got the PPP loan. The loan could indicate that the company has been under duress. Because of this, past financial statements may not accurately represent the future of the business.READ MORE >>
Benchmark International is pleased to announce the transaction between Basildon-based Kbiosystems and Porvair, the specialist filtration, laboratory and environmental technologies group.
Kbiosystems specialises in the design and manufacture of laboratory instruments, with particular expertise in automated microplate handling systems. With in-house design, manufacturing and assembly facilities, and a team of long-standing specialists, the company services an international client base, supported by a substantial network of global partnerships with distributors. In the year ended 31st March 2020, Kbiosystems reported revenues of GBP3.8 million.
Porvair is a group of specialist filtration, separation and environmental technologies businesses. Its products are used in a range of niche filtration and separation markets, and are derived from its expertise in the design and manufacture of filtration and separation systems. It is organised into three divisions: Aerospace & Industrial; Laboratory; and Metal Melt Quality. The group has operations in the UK, US, Germany, the Netherlands, and China.
Following the transaction, Kbiosystems will continue to operate from its existing premises and will be integrated into the group's Laboratory division.
Commenting on the acquisition, Ben Stocks, Chief Executive of Porvair, said: “We are delighted that Kbiosystems has joined the group. We have known the business for many years and there is a good fit between our laboratory consumables business and Kbiosystems' instrument automation expertise. Together the businesses have a compelling offering for laboratories seeking to automate their sample testing processes."
READ MORE >>
Benchmark International is pleased to announce the transaction between Stoke-on-Trent based Hymor Timber (Hymor) and National Timber Group (NTG).
Established in 1990, Hymor is an independent timber merchant supplying ethically sourced hardwood and softwood to a range of trade and commercial customers, including joiners and manufacturers.
Hymor employs 28 people and in 2020 achieved revenues of £4.5m. Hymor’s acquisition was initiated by the owners’ succession planning.
National Timber Group is the largest independent added-value timber distribution and processing group in the UK, serving a diverse customer base including joiners, housebuilders, and contractors. Created through the acquisitions of market-leading brands Thornbridge, North Yorkshire Timber, Rembrand and Arnold Laver, the group now has a combined turnover of over £250 million, over 1,300 employees, and 64 processing and distribution sites.
National Timber Group is a portfolio company of Cairngorm Capital Partners, a specialist private investment firm providing equity capital and management expertise to leading UK companies. It invests in strongly performing, private mid-market growth companies in manufacturing, distribution and services industries.
A highly complementary and strategically beneficial transaction, it enables National Timber Group to expand into the Midlands and North West. Hymor’s product offering also complements those at NTG’s specialist hardwood depot in Hull that serves Yorkshire and the Humber.READ MORE >>
Benchmark International is pleased to announce the transaction between OpenSource International LTD, OpenSource Intelligent Solutions (Pty) Ltd (OpenSource) and Workforce Holdings Ltd.
OpenSource is a South African and Mauritius-based business that was established in 1993. The company places skilled SAP resources on both a contract and permanent basis as clients utilize SAP’s Enterprise Resource Planning system. The company also provides SAP training and other services, including SAP site maintenance and payroll outsourcing. OpenSource is an accredited SAP partner and resources consultants across all SAP modules and complementary technologies for companies internationally.
Managing Director Michelle Viret has over 35 years of IT experience and specialises in marketing and sales, focusing on resourcing and training. Delighted with the outcome, she commented on the transaction, saying, “Again, thank you for introducing OpenSource to the right company upfront. You heard our brief, and from the first meeting, the long-term choice we made is right for us. Our business fits hand in glove with the Workforce philosophies, operation, and culture – it is certainly a ‘can do’ attitude, and it is refreshing to have input from leaders that have years of business knowledge and savvy, specifically someone like Mr. Ronny Katz.”
Workforce Holdings and its Group of companies provide employment, training, healthcare, wellness, financial services, and lifestyle benefits to individuals and their employers. Established in 1972, Workforce Holdings is listed on the JSE Altx exchange, employing over 1,340 permanent staff and paying approximately 34,000 assignees.
The Group’s business model reflects its diversification and is structured into five operating segments: staffing and recruitment, training and consulting, employee health management, financial and lifestyle products, and process outsourcing. This structure facilitates integration and diversification of services, including expansion into adjacent services and new markets.
Detailing their motives for the acquisition, Workforce stated that this transaction allowed it to further expand its human capital services offering. “This is consistent with Workforce’s previously stated growth and diversification strategy. The acquisition introduces a profitable and specialised business with a broad footprint and a driven, entrepreneurial management team into the Workforce group,” it said.
Ronny Katz, chief executive officer of Workforce, said, “The OpenSource Group offers services as an accredited SAP partner, allowing Workforce to offer leading solutions in a new and diverse market. Also, this complementary offering provides both Workforce and the OpenSource Group with exciting cross-selling opportunities within their respective customer bases.” He added: “Dealing and engaging with Benchmark was a positive experience. The professionalism and pragmatism of their deal team assisted us as buyers in expediting, and ultimately finalize, the transaction.”
Tiaan Smit, representing Benchmark International’s South African office, added, “For the Benchmark International team, understanding Michelle and the unique strengths of the OpenSource business that she has built up over the last 28 years was key to finding the right acquirer. We believe that Workforce is the perfect match, and by leveraging Workforce’s established backing and support, Michelle’s drive, energy, and strategic foresight will take the businesses to even greater heights. We’ll be following their progress closely and look forward to their mutual success.”READ MORE >>
Benchmark International is pleased to announce the sale of Ripley-based specialist maintenance company, Restek, to an Employee Ownership Trust, joining the growing number of employee-owned businesses across the UK, as it announced its 14 permanent team members would be taking a stake in the business.
Founded in 2013, Restek provides a range of services including concrete structural repairs, composite strengthening, ground remediation and geotechnical solutions through the use of innovative materials, specialist products and techniques.
With an increase in revenue of more than 500 per cent in the past five years, the business has quickly grown to be a market leader in ground engineering, having worked with numerous local authorities and blue-chip companies including Network Rail, Barclays and Highways England.
Commenting on the transaction, Mr Knight said: “Since incorporating the business, I always had the intention of stepping away, and following consultation with Benchmark and Napthens, I decided that employee ownership was the best fit. Growing revenue every single year, Restek has now been involved with a catalogue of exciting, high-profile schemes, quickly cementing ourselves as a leaders in our field.READ MORE >>
Taking your business to market is a very challenging yet rewarding process. Receiving feedback from potential buyers enables you to learn both what specifically attracts buyers to your company and what your business is generally worth. Throughout the process, a valuable lesson learned will be the importance of weighing all potential offers, rather than strictly accepting the highest offer.
Consider the likelihood that the buyer can finance the proposed offer
Having multiple Letters of Intent (LOIs) to compare against each other is a great problem for a seller to have. Each offer is unique and presents different solutions to finance the proposed transaction. However, an LOI is not binding and simply moves you into an exclusive relationship with a buyer for a set period (typically 60-90 days). Deciding to enter an exclusive relationship with this one buyer can affect your perceived value with other serious buyers, should you have to reopen dialogue if the agreed upon LOI does not ultimately close the deal.
A major component in valuing an LOI is the legitimacy of the offer. One buyer may come in and submit an offer that is a percentage higher than that of other buyers. If you agree, spend time working with the buyer, and ultimately learn that the buyer does not have the funds necessary to pay the intended price, you have lost valuable time on market and there is no guarantee the landscape will be the same upon return to market. For example, other buyers that extended an LOI may have moved on, eliminating them as a potential buyer for your company. Effectively, each seller must determine the authenticity of an offer in respect to the time it will need, the resources that must be committed, and the effect it will have on relationships with other buyers.
Deal structures can be valued in many ways
A second characteristic to consider is the structure of the deal. Four broad levers that buyers have in structuring an offer are cash, equity, debt and earnouts. The percentage makeup of each component is a huge aspect of the offer. For example, a seller who values cash upfront may value a $10 million all-cash offer more than a $12 million offer that is split between 50% cash and 50% earnouts based off estimated financial performance post transaction. An earnout structure would be less appealing to that seller due to the uncertainty of achieving the targeted earnout performance and/or the potential for litigation in the period between transaction-close and the earnout’s expiration.
Compatibility with your potential partner
Unless you fully exit your company and receive a full-cash offer, another topic to consider is determining how well the buyer aligns with you and your company. While not always the case, some buyers may state that proposed deals are contingent upon the owner remaining on full time after the sale because they value the owner’s role for a successful transition of ownership. For any deal in which this is the case, you would also need to reflect on whether you are willing to transition from being the manager to being managed.
A buyer’s compatibility with your company also matters when your payout is contingent upon earnouts or a retained equity position. As mentioned in the previous section, funding for the sale can include earnouts. An earnout is a post-closing purchase price payment that is contingent upon the acquired company meeting negotiated performance goals post closing. If your company’s performance post acquisition does not pan out as expected, the earnout expectations may not be met and you would not receive the compensation which was expected at the close of the deal.
Alternatively, if the seller retains an equity position in the company post sale, then there may be a benefit to accepting an offer from a buyer that is not the highest bidder: if that buyer brings a strategic relationship that grows the value of the retained equity position. Oftentimes this strategic relationship manifests itself in operating synergies allowing for expense reductions, new revenue growth opportunities, or additional management expertise.
Financing strength, deal structure, and compatibility are three of many attributes in addition to the final price that must be considered when selling your company. Ultimately, in a process that is so complex and intense, choosing which offer to accept is not quite as simple as accepting the highest offer.READ MORE >>
Strategic partnerships can be game-changers for SaaS (Software as a Service) companies. Sales revenue is clearly of vital importance, but it takes more than just those numbers to make things happen on a larger scale. Relationships are the bedrock of business. If you are looking to drive growth, a strategic partnership can be a very powerful tool to help your company increase its audience, build upon the brand, and tap into new markets. All of this, in turn, can prop up your sales team and boost your overall growth.READ MORE >>
PitchBook has released their 2020 Annual Global League Tables, and Benchmark International is ranked the #1 Sell-Side Exclusive, Privately-Owned, M&A Advisors in the world. PitchBook is a leading financial data provider covering M&A, private equity, and venture capital deal activity.
“We are delighted to be recognized by PitchBook as one of the most active firms in the world,” said Greg Jackson, CEO of Benchmark International. “We remain grateful to our clients for their continued confidence in us and proud of our team’s unwavering dedication and success.”
Executive Chairman, Steven Keane added “This important news solidifies Benchmark International’s standing in the world as a true market leader in the mergers and acquisitions community. It is also a “benchmark” for our company, which was founded in 2008 and remains in private ownership, knowing that our talented team can only continue to make strides from here and carry out our mission to accomplish great things for our clients. We add this recognition to our long and growing list of accomplishments.”
PitchBook’s Global League Tables are a comprehensive report on private equity and venture capital activity worldwide for the year. They are compiled using the count of completed deals for the specified deal type, region, and other criteria. The listing only includes publicly disclosed transactions and/or those confirmed by PitchBook’s primary research team.READ MORE >>
Benchmark International is pleased to announce the acquisition of GreenTex Landscaping Inc. by Zodega Landscape Services, LLC.
GreenTex Landscaping Inc. performs landscaping, groundskeeping, edging, trimming, mulch, aeration, and other lawn care services across the North Dallas area, servicing residential and commercial customers. GreenTex has been successfully operating for more than 13 years and has received the Angie’s List Super Service Award for outstanding customer service for six years in a row.
Zodega offers high-quality lawn care and landscaping services to high-end residential and commercial properties across the Houston metropolitan area. In addition to standard landscaping and lawn maintenance, Zodega provides tailored pressure washing and pest control to suit customer needs.
Bill Biancaniello, President of G-Tex, Corp. and former owner of GreenTex Landscaping, commented, “The Benchmark team did a fantastic job of keeping the transaction on track. They were available to provide support throughout the entire transaction process and were particularly supportive in giving the final push which got the transaction over the finish line.”
Regarding the deal completion, Anthony Hernandez, Benchmark International Transaction Director, shared, “the Benchmark team is delighted to announce the successful sale of GreenTex Landscaping to Zodega Landscaping. The team is excited to see Zodega’s successful expansion with the strategic acquisition of GreenTex. It was a particular pleasure for Benchmark International to work with G-Tex and the team wishes each of the parties every success in their future endeavors.”READ MORE >>