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What were the reasons you started your own business? Most likely you wanted to pursue a passion but there are a multitude of other benefits that would tempt anyone to start their own business – from flexible working times to calling the shots. But, have these benefits actually become a reality?
If not, then it might be time to look at your work-life balance. Do you find yourself having no time to spend with your family and doing the things you love? Even worse, do you find that it’s having a detrimental effect on your health? For example, if you are stressed, being overworked can lead to a number of health problems such as stress induced insomnia and heart disease – something that needs to be remedied straight away.
Here is what you should do to make sure you are balancing work and life without being detrimental to your health:
Visit the Doctor
If you are feeling stressed and this is making you feel unwell then it is time to visit the doctor. Nobody likes visiting the doctor and it might be difficult to fit an appointment in around your schedule, but it is best done sooner rather than later – a doctor can tell you if you need to slow down and what will happen if you don’t.
Factor in Time for a Healthy Lifestyle
Make sure you schedule time for eating well, exercising regularly and getting plenty of sleep. Admittedly, it’s easier said than done, but fitting these activities into your day can help you work better and, often, working longer hours doesn’t actually lead to increased productivity, in fact – studies have shown that work performance can improve with a shorter work week.
Schedule Some Non-Business Time
Aside from scheduling in time for a healthy lifestyle, you should have some time for leisure activities you enjoy. You can’t work 24 hours a day so try and find time in the evening or weekend to switch off and enjoy other passions in your life to help reduce stress.
1. No one can control the market.
You can know it. You can be smart about what it will do, how it will react. But you cannot control it. The nearer into the future you look, the more of a feeling of control you can have. But the longer a business owner wants us to look into the future, the less valuable the insights. Things change. Interest rates move. Sectors fall in and out of favor. If you want me to try to control the market, please act quickly so that we are dealing with the current market, not some future version of the market.
2. There is no perfect buyer (or seller).
Everything in life involves tradeoffs. Your business, like the ones we will bring to you, has imperfections. I’m here to convince buyers to take a favorable view on your business – to trade off its defects against its outstanding features in a way favorable to you – AND to help you uncover and evaluate the buyer’s defects and favorable features. So … please don’t expect your business to be perfect and don’t expect us to bring you perfect buyers. One of the main reasons our business exists is because buyers – and sellers – are imperfect. If that were the case, you’d not need us.
3. Your priorities will change over the course of the company sale process.
This is not a bad thing. It’s a marvelous occurrence that is very satisfying to observe. It is an unintended consequence that will be of great benefit to you. What makes it problematic is when you don’t realize its happening AND when you don’t tell us its happening. As your broker, we are out there trying to achieve your objectives – as you’ve explained them to us. If we don’t know what you’re after, we’ll be after the wrong thing.
4. We’ll give you plenty of feedback but we need feedback also.
We will start by proving you some feedback from our internal knowledge base and experience. We will then give you feedback from specific buyers and the market in general. In order to get the best result for you, we need that feedback loop to be a two-way street. We want to know what you think of each buyer, of our service, of your own business, of the market in general, and of the process. Both our process and the market are highly flexible and changes can be made to meet your needs and expectations, but only if we know they need to be made.
5. It’s a marathon, not a sprint.
Too many clients come out of the blocks at full speed. Many also tend to think the signing of a letter of intent is the beginning of the end but it is just the end of the beginning. Running out of gas is a big problem when it comes to getting deals closed. Some parts of the process require significant time and energy from you and others do not. In order to hit your goals, we’ll need you well-prepared for those stages where your input is crucial. The deficiency we most often see emerging during the process is not one related to energy or time but rather emotions. This is understandably a stressful process. It should be and we build our service model around that fact. And that emotional aspect of the process is the hardest one to deal with over the course of the lengthy process.READ MORE >>
If you’ve received an offer for your business, you have three options – the first being take the offer and sell your business. This is possibly something you have been considering, or it seems too good an offer to refuse; however, you should be cautious in such an event and, if you do want to pursue the offer, make sure you do the following:
Keep the Business Sale Confidential
Confidentiality is very important when it comes to the sale of your business. If it gets out that you are selling your business then this could potentially lose you staff, customers, and suppliers as they could get nervous about an impending sale and the changes that could be in store for them. Therefore, do not discuss anything until a non-disclosure agreement (NDA) has been signed, including whether you are prepared to sell the business.
Make Sure you Stay Focused on Your Business
One of the dangers of the sales process is that it is very time-consuming at the point where you really need to focus on maintaining a good business performance – if business performance dips, then this can give a buyer an excuse to lower their offer.
In fact, this is not the only situation where a buyer might decide to lower their initial offer. The buyer is under no obligation to actually pay this price for your company until you both sign the Sales and Purchase Agreement (SPA) and there are several reasons a buyer might try and chip away at the offer to try and get your business for a bargain price.
For example, when you have accepted the offer and signed the subsequent Letter of Intent (LOI), the buyer can commence the due diligence process, providing them with access to confidential information such as financial documents and contracts for a specified period of time, typically 30-60 days. There are two related problems with this. Number one is the fact that the due diligence process is time-consuming and a resource drain, which could lead you to take your eye off the business. Number two is the buyer can now look at re-negotiating now they have had a thorough look at the ins and outs of your business.
Therefore, after this huge resource drain, you now have an offer on the table that does not meet your expectations as the buyer has chipped away at the price. Either you still take this less than favourable offer, or you turn away from the deal. While it is your prerogative to do so, you have lost time and valuable resources, you have given information about your company to another party, and you have not had your full focus on the business.
So – what are the alternatives to accepting an unsolicited offer?READ MORE >>
Retirement is a significant decision that you have waited your entire life to make. Most people retire between the ages of 60 and 70, but everybody faces a different set of circumstances that dictate when they can retire. So how do you know if you are ready?
The most important factor in retirement is whether your financial situation will allow you to do so with security and peace of mind.
• Do you have enough money saved? You want to live comfortably and maintain the standard of living to which you are accustomed. The last thing you want to do is retire and then realize you don’t have the means to live the way you are used to and end up having to downsize your dreams.
• Are the markets in the right place so that you maximize your investment returns? Maybe your portfolio took a little bit of hit recently. Giving it a little time to recover can be a wise strategy. Consider where the markets are and where they are forecasted to be in the upcoming months. If you time it right, you can make the most of your decision.
• Are you debt free? It may not be the smartest move to retire if you still carry debt you must pay, especially if it is significant. Retiring when you are debt free means retiring when you are worry free.
• Do you need a plan to cut down on potential expenses? If you have a strong desire to retire but feel that you are not as financially confident as you would like to be, you can devise a plan to reduce your monthly expenses and ease some of the burdens.
Of course, there is more to the decision than just financial factors. You must consider whether you are mentally and emotionally prepared for retirement.
• Are you no longer interested in pursuing career opportunities? If you are still hungry to attain work-related goals or you feel that you haven’t achieved everything you set out to achieve, then maybe retirement is not for you just yet. You do not want to retire and then feel that you are missing out or that you didn’t reach your full potential.
• Do you find yourself thinking about recreational and social activities more than you are thinking about work? If you find yourself standing on the golf course, wishing you could spend more time there, then it may be a good time to consider retirement. Sometimes getting out before you are completely checked out is in the best interest of you and your business.
• Do you have a plan for how you want to spend your time? It is not unheard of for people to retire only to become overwhelmed with boredom and a lack of purpose. Having a plan in place can help you stay busy and feel that you are achieving a new set of goals in life.
• If you are retiring with your spouse, are you equally ready and on the same page when it comes to how you will spend your time? If you are in this together, make sure your plan is truly in sync. If one of you wants to travel the globe and the other one just wants to spend time with the grandchildren, there could be a conflict that you didn’t even realize you would have to address. Plan your vision for retirement together.
These are all critical questions to ask yourself when deciding if you are ready for retirement. But there is one more crucial question that you must address.
• Do you have an exit strategy for retiring from your business? An exit plan is essential because it ensures that your business will make a successful transition into its next phase of ownership. Also, an exit plan will help you boost the value of your business so that you are prepared to sell at the ideal time.
READ MORE >>
A proven strategy for success regarding exit planning is to partner with a trusted advisor, such as Benchmark International. We can help you find the right buyer, maximize value, and craft a dream exit that leads to a happy and satisfying retirement.
Benchmark International has successfully facilitated the sale of Master Printing Group to JAL Equity. Master Printing is one of the Mid-South's leading marketing solutions providers. The company provides complete services from design and concept through the production of complicated collateral pieces. Additionally, the company operates a full-service graphic design, marketing, and advertising division as well as comprehensive direct mail services.
JAL Equity is a boutique private equity firm based out of Sarasota Florida and focuses on acquiring small businesses and operating them profitably over the long term. The company targets printing services, data services, direct marketing, and lead generation entities.
Senior Deal Associate, JP Santos, added, "The Benchmark International team is incredibly excited about the future of Master Printing Group under the ownership of JAL Equity. The previous owners did an outstanding job of building a company with an impeccable reputation in the market, and a brand that was built over generations. Jon and Susan were a pleasure to work for, and we're excited about what the future holds for them both. JAL Equity has proven to be successful in this industry, and the corporate and cultural fit amongst the JAL Equity and Master Printing Group was apparent from the first conversation."READ MORE >>
When deciding to sell their business, sellers generally focus mostly, if not entirely, on internal factors. Revenue is growing and predictable. Earnings are improving as a result of increasing revenue and internal controls. Backlog is up. Customer concentration is low. This fictitious company paints a very compelling picture and is no doubt an attractive candidate for acquisition. However, while those are all important aspects and contributors to value, there are other factors that are beyond the seller’s control that not only impact the value of the business but also impact how sellable it is. In this piece, we will discuss some of the external market factors that impact M&A transactions. These factors are in no way comprehensive. The research wasn’t exhaustive. The intent here isn’t to create a definitive list of external influences. Instead, it is to demonstrate how important factors that are well beyond our control impact M&A deals. As a result, sellers should consider moving quickly if the factors within their control are positive.
Interest rates, while still hovering around historical lows, will rise over the coming 18 months. Why is this important? Buyers, both financial buyers like Private Equity Funds, Independent Sponsors and Family Offices, and strategic acquires alike, use leverage to fund their deals. Many buyers will fund 40-60% of the cash at closing by way of debt in some combination of senior and junior debt instruments. When the cost of debt increases, buyers are faced with two options: 1. Use more equity, either out of their fund or from the corporate balance sheet to fund the transaction; or, 2. Lower the multiple they use to value the company. Given that the cost of debt is far cheaper for most buyers than their cost of equity, they generally favor using as much debt as is practicable. Most Private Equity funds are averse to using more equity and will instead, lower the valuation multiple. Compression of transaction multiples is coming, after a historic run. It is simply a matter of when.
While we are in a much-publicized period of regulatory retrenchment, some industries are facing increased regulation. Many more are facing a changing regulatory environment. Whether there is more regulation or simply shifting regulation, the changes create both risk and uncertainty for buyers. Risk and uncertainty can impact the desirability of a company/industry and certainly can affect valuation.
Global Economic Concerns and Geopolitical Issues
Global economic issues can impact the M&A environment both generally and for specific industries. At the moment, we face a great deal of uncertainty related to trade with our largest trade partner, China. Tariffs are impacting companies across sectors by increasing manufacturing input costs, reducing the speed to market, and decreasing the demand for their products. Unrest in the Middle East, uncertainty in North Korea, Brexit, Russia, and all the alike contribute the geopolitical risks that impact M&A.
Industry Consolidation or Convergence of Industries
Industry consolidation can have a considerable impact on valuations. If you are in a fragmented industry that is in the early days of consolidation, this can have a very positive impact on the value of your business. However, if that consolidation began years ago, you may have missed the window. That doesn’t mean you can’t sell your business, but it will be more difficult to identify the buyer and may have an impact on valuation. The same can be said when industries converge. For example, the manufacturing and technology sectors have converged. Convergence of industries, depending upon where we are in that cycle, can create either risk or opportunity.
Changes in the Workforce Dynamics/Millennials/Gig Economy
The ready availability of a talented workforce can significantly impact industries and businesses. Due to workers having very little switching costs to move from one company or industry to another, construction and landscaping businesses have found it increasingly difficult to attract and retain talent. Specific industries that require talent to be aggregated in the same room for the entire workday face different challenges. The Great Recession, coupled with a generation of workers that place a premium on their time, has led to an enormous gig economy. It is not out of the question that the gig workforce overtakes the traditional workforce in the next decade. This shift will impact every business in ways we couldn’t possibly understand yet.
Political Trends and Risk/Elections
The constantly changing domestic political landscape impacts the M&A environment in numerous ways. We have uncertainty around healthcare. Any provider of healthcare or any business dependent upon reimbursement faces at least a measure of uncertainty. Immigration has become a hot button issue in the US. Wherever you fall on the issue, there is little doubt that American businesses rely on non-citizens to supplement the citizen workforce. Buying decisions are often postponed with looming elections. Tax planning is difficult when an administration change could entirely change the tax code…again. Political unrest creates uncertainty. Uncertainty is interpreted by buyers as being the equivalent of risk and manifests itself in the form of lower multiples.
Dry Powder in PE Funds/Excess Cash on Corporate Balance Sheets
An economy on an unprecedented run of success has created enormous cash reserves in the corporate coffers. Strong performance by private equity funds has made raising subsequent funds easier. Also, outsized multiples have reduced the number of investments many PE funds have made, so they too have tremendous stores of dry powder to deploy. Abundance of capital to deploy into transactions certainly should help with valuations. PE funds, in particular, have only one mandate: buy businesses, grow them, and sell them 3-5 years later for a meaningful return. As such, there is no risk of them using their capital for other projects. The same can’t be said, however, for strategic acquirers. Corporations have many competing uses of their cash. If the environment for M&A turns unfavorably, businesses may pursue growth through organic initiatives. For example, they may opt to forego M&A deals in favor of greenfielding new territories, launching new products, building out new technologies, or exploring alternative revenue models. Alternatively, some may view the best use of their cash is to distribute it out to owners in the form of a dividend.
In summary, there are many outside influencers on the M&A market that simply cannot be controlled. While companies can put mitigation strategies in place, they cannot exert control over external market forces. When the key factors within a potential seller’s control are favorable, it behooves them to seek out a talented M&A advisor, like one from Benchmark International, to assist them. We can help them to ride the tailwinds, overcome the headwinds, and navigate the obstacles.READ MORE >>
1. Most M&As Fail
According to collated research and a recent Harvard Business Review report, the failure rate for M&A is between 70 and 90 percent. To effectively complete a deal, there must be a clear strategy and open communication among all parties.
2. Expect Due Diligence
Experienced buyers conduct meticulous due diligence. They want to know exactly what they are taking on, and that includes factors such as obligations, liabilities, contracts, litigation risk, and intellectual property. As a result, sellers should be prepared to provide very thorough documentation.
3. Priorities Change
Your company may be a good strategic fit today, and in a year from now. But people are fickle, and priorities can change, so a good offer today could be a non-existent offer later.
4. Employees Will Have Questions
In any sale of a business, employees are going to have questions about how the transaction will affect them. Also, the buyer will want to know how specific issues are handled. Will there be layoffs? Have confidentiality agreements been signed? What about any stock options? How will management be changed? These are just a few questions that should be anticipated.
5. Don’t Overlook Technology
These days, virtually every industry is impacted by technology. In the M&A process, it is important to think about how IT platforms will be consolidated or integrated, how technological changes can affect inventory, and how cloud management will be used, among many other factors.
READ MORE >>
6. M&As Are Often Funded by Debt
Low interest rates on loans encourage M&A. In 2015, acquisition-related loans worldwide totaled more than $770 billion, the most since 2008.
7. Competition Will Result in the Best Deal
The more bidders there are on a sale, the more favorable the conditions are for the seller to negotiate a higher price and better terms. Even if there is only one serious bidder among several, the perceived level of interest can lead to brokering a better deal.
8. Synergy is a Must-Have
For an M&A deal to succeed, vision and strategy need to be synergized at the executive level and communicated to all management. M&As can fail due to a misalignment of vision for the culture, the industry, each company’s role, and more. The cultural fit of two companies can be crucial to how successfully they meld.
9. It Can Take Awhile
From beginning to end, most mergers and acquisitions can take a long time to be completed, usually in a period of around 4 to 12 months. The length of time depends on how much interest the seller has generated and how quickly a buyer conducts due diligence.
10. You Need an M&A Advisor
An experienced M&A advisory team can help ensure that the complex process of selling or buying a company goes smoothly, addressing all of the issues mentioned above on this list.
Benchmark International is delighted to announce that one of our very own has been awarded as an Emerging Leader by The M&A Advisor. The M&A Advisor created the awards to show recognition of leading M&A, financing and turnaround professionals, and to gather professionals together for professional development and mentorship opportunities.
Senior Deal Associate, JP Santos, has been chosen for his accomplishments and expertise from a pool of nominees by an independent judging panel of distinguished business leaders. Benchmark International is proud to be represented by one of our talented teammates at this prestigious event.
Santos expressed his gratitude for the award stating “I’m humbled at being nominated as an Emerging Leader by Benchmark International and subsequently being chosen as a winner. I’m fortunate that I have the opportunity to be a part of a team of driven individuals who are passionate about serving our clients in an effort to help them reach their goals,” he said. “This award is a tremendous honor for me personally as well as our firm, and I appreciate the recognition from The M&A Advisor and the panel of judges.”
On Tuesday, September 17, The M&A Advisor will host a black tie Awards Gala at the New York Athletic Club in Manhattan to introduce the 2019 Emerging Leaders Award Winners to the business community and to celebrate their achievements. The Awards Gala is a feature of the 2019 Emerging Leaders Summit—an exclusive event bringing current and past Emerging Leaders Awards winners together with their peers and industry stalwarts.
In 1998, The M&A Advisor was founded to offer insights and intelligence on M&A activities. Over the years, networks have grown, and their award ceremonies have been dubbed the Oscars of M&A. Benchmark International is proud to accept recognition from this organization and always strives to leave no stone unturned.READ MORE >>
Benchmark International has successfully facilitated the transaction between Lightning Packaging and Bunzl.
Bunzl, a global distribution and outsourcing group of packaging, catering equipment and safety wear, has spent approximately £600m on acquisitions during 2017 – a marked increase of £327m in 2015 – with the company consolidating its fragmented markets through acquisitions, an important part of its ongoing strategy.
The acquisition of Lightning Packaging, a UK-wide distributor of packaging materials to a variety of sectors, has provided Bunzl the opportunity to further consolidate within the packaging sector.
The impact of Bunzl’s acquisitions, along with its growth from organic revenue, has led to an approximate 15% increase in revenue at actual exchange rates and, at constant exchange rates, between 9% and 10%.
Speaking on the process with Benchmark International, Martyn Taylor, Managing Director at Lightning Packaging, said:
"Without Benchmark International being involved in our sale, there is absolutely not a possibility of that sale going through as smoothly as it did. I would say that without professional help, and I mean professional help of a very, very high level, you would not be able to conclude the deal that we concluded. It just could not happen. I'm convinced of that.”
Benchmark International would like to thank all parties involved and we wish them all the very best of luck for the future.
The global industrial wastewater treatment market was valued at $10.6B last year, and industry experts expect this figure to reach $16.6B by 2026 – at a compound annual growth rate (CAGR) of 5.8%. The global market is propelled by factors such as diminishing freshwater resources and stringent regulations related to emissions and treatment of industrial waste. Industries such as food, petroleum refining, textile dying, and power plants are some of the main contributors to industrial wastewater.
Over recent years, new water recycling and process technologies have begun emerging, some include membrane bioreactors, wastewater monitoring and control systems, and granular sludge treatment processes using engineered microbial structures. Increasingly stringent wastewater discharge controls and tighter water quality requirements, nutrient removal, trouble maintaining complicated systems while keeping prices down are the major hindrances for the industrial wastewater treatment market.
Key Industry Statistics
- North America (35.5%) is expected to be the largest player in the industry, owing to the presence of huge infrastructure in the oil and gas sector, mining and strict regulations against wastewater treatment. Europe is the second largest accounting for 31.2%.
- The largest segment of the wastewater treatment industry goes to power generation, which accounts for 62% of the total market share. Mining holds 30.6%, while chemicals hold 7.4%.
- Elsewhere, coagulants are anticipated to register the highest growth rate in the industry, at a rate of 6.4% through to 2026.
Water infrastructure has experienced several ups and downs. While the majority of market stakeholders were interested in business collaborations, natural disasters created a range of problems for water treatment manufacturers. Most of the top players have become focused on integration of advanced technologies to develop smarter and more effective solutions for water treatment and management.
The value chain for water and wastewater treatment equipment market is expected to witness changes in terms of investments, innovations, advancements and business opportunities. New technologies, business models and technologies are expected to be introduced, especially to support the changing requirements for water treatment.
We Are Ready When You Are.
Call Benchmark International today and speak with one of our analyst about your company's exit or growth strategies.READ MORE >>
Are you considering buying or selling a privately held business? Below are a few stats that you might find surprising:READ MORE >>
Benchmark International is pleased to announce that our very own Global CEO, Gregory Jackson, has been announced a recipient of the 2019 Leadership Award from M&A Advisor. Our organization works hard to make the best transactions for our clients, and Mr. Jackson notes that without all members of the Benchmark International team, this accomplishment would not be possible.READ MORE >>
As a business owner, have you given any consideration to your succession plan?
It is important to note that a succession plan is not the same as an exit plan, but rather an element within an exit plan. Succession planning is focused on the interests of the business when an owner departs and another takes over. Exit planning is focused on the interests of the business owner, with succession just being one aspect in the overall plan.
It is actually quite common for small business owners to not have a succession plan, or even an exit plan, in place. Regardless of whether you have no plans of retiring anytime soon, the future is unpredictable, and having a solid, documented strategy in place can be crucial to the health and fate of your business. You will want to be ready for any scenario or opportunity that comes along.READ MORE >>
The global corporate training market is projected to grow at a compound annual rate of 9.8% and reach $114 billion by 2022, according to industry experts. Furthermore, a combination of economic, regulatory, demographic and technological forces is reshaping the labour market and forcing employers to increase the speed and efficiency with which they train employees. Meanwhile, ongoing changes in how people consume information and engage with educational content have unlocked new opportunities for innovative training companies to significantly enhance the learning experience. These factors have led to a strong interest in training firms, with much of the interest over the last few years coming from players outside the industry, who wouldn’t traditionally be linked with training.
Some of the high-profile acquisitions coming from adjacent markets include recruitment companies looking to use training as a way to strengthen the marketability of their talent pools and help employers bridge the skills gap. For example, in May 2018, Adecco Group announced it was acquiring General Assembly, which provides courses in web development, coding, and other digital skills. A few years earlier, LinkedIn enhanced its training capabilities by acquiring Lynda.com, an online education company. Penn Foster also partnered with EmployBridge, a large commercial recruitment company, to provide online courses to EmployBridge employees for free.
Furthermore, several factors over the last decade have given employer-sponsored training an increased share in the market. The most significant is that the ever-shortening technology is cycle is accelerating the rate in which certain skills become obsolete. As a result, employers are being driven to make investments in hiring, training, and re-training qualified workers. Increasing regulations and changes to the policy are contributing to the industry, increasing demand for regulatory and compliance monitoring training.
Key Industry Trends
· eLearning: The increasing use of eLearning has grown to become a multi-billion-dollar market. Factors that have contributed to growth in eLearning include the rising costs of instructor-led, classroom-based training as well as the need for continuous, life-long learning. Awareness and compliance training were two of the first to use eLearning, however sophisticated platforms have made even soft skills training a practical reality for this approach. Add to that the potential for significant cost savings, and it’s not difficult to predict the continued expansion of eLearning for years to come.
· Training being used to attract and retain employees: Training is increasingly being viewed as an employee incentive, along with perks such as healthcare and retirement benefits. Employees appreciate that access to training will help them hone their skillset – as well as developing new skills. This also helps businesses retain employees, a recent poll found that more than half of all currently employed adults are either actively searching for a new job or are at least passively entertaining other career opportunities. Using training is a way to help develop your employees while keeping them engaged and productive.
· Skill gaps continue to grow: According to a report by Payscale Research, 33% of employers had positions open for over six months due to a lack of skilled or qualified candidates. As such, companies must take it upon themselves to provide future employees with the training and development opportunities to meet the demand of the role.
· Convenience: With the ever-increasing rise of technology, more people are demanding that training is easily accessible. They expect learning to happen at any time, in any place. As the vast majority of people use smart phones, this means they don’t have to wait to access training.
· Personalisation: Off-the-shelf training programs are on a rapid decline, employees expect training to be relevant to their unique situation. This means adapting content based on factors such as work environment, the culture within the organisation, employee experience, location, and job performance. With eLearning, there is cause for optimism and excitement in the industry that customised training will become the norm. While training improves, so will company performance.
We Are Ready When You Are.
Call Benchmark International today and speak with one of our analyst about your company's exit or growth strategies.READ MORE >>
Timing is everything, and 2019 is the prime time to sell a business for maximum value. The conditions are extremely favorable right now for several reasons, and waiting could mean that you miss out an ideal opportunity.READ MORE >>
Benchmark International has successfully facilitated the acquisition of AM Engineering, Inc. (“AME”) by Fremont-Wright, LLC (“Fremont-Wright”).
AME is a Florida-based business headquartered in Sarasota. AME specializes in civil engineering and land surveying projects for large and small-scale land development, water distribution systems, wastewater collection facilities, roadways, parking facilities, and site grading. AME offers both engineering and surveying services for residential and commercial clients. The sale to Fremont-Wright creates new growth opportunities for the business.
Fremont-Wright is a holding company based in Memphis, TN, and specializes in aerial and land survey, as well as civil and structural engineering. Its companies – Triton Engineering, I.F. Rooks, Colbert Matz Rosenfelt, and Harmsen – also offer services such as photogrammetry, environment management, volumetric services and utility design. Fremont-Wright serves the institutional, mixed use, commercial and residential industries. This acquisition fits well with Fremont-Wright’s continued nationwide growth strategy.
Shawn Leins, president and one of the owners of AME stated, “We are excited to join the Fremont- Wright team and look forward to continued growth and success.”
Regarding the deal, Transaction Director Leo VanderSchuur at Benchmark International stated, “It was a pleasure to represent AME in this strategic transaction. On behalf of Benchmark International, we wish both companies continued success.”READ MORE >>
This is an intriguing time to be involved in the global food and beverage industry. 2019 remains promising for M&A opportunities for several reasons. Giant food companies are on a spree to expand their portfolios with food innovation. Food start-ups and smaller private food companies are looking to cash in on growth and exit strategies. And private equity and venture capital firms are motivated to get their piece of the pie.READ MORE >>
A strategic partner is another business entity with which you form an agreement to share resources with the mission of growth and mutual success. There are different types of strategic partnerships.
- Horizontal Partnership: Businesses within the same field join alliances to improve their market position. Example: Facebook and Instagram.
- Vertical Partnership: Businesses team up with companies within the same supply chain (suppliers, distributors and retailers), often to stabilize supply chains and increase sales. Example: LiveNation and Ticketmaster.
- Equity Partnership: An investor acquires a percentage interest in a business, providing needed capital and sharing in profits and losses.
- Joint Venture: Two or more businesses form an entirely new legal entity in which the profits and risks are shared, and the original companies continue to exist on their own. Example: Microsoft and NBC’s creation of MSNBC.
- Merger: Two companies agree to go forward as a single new company and the original companies no longer exist. Example: Exxon and Mobil, now Exxon Mobil Corp.
- Acquisition: One company takes over another company and establishes itself as the new owner. Example: AOL and Time Warner, now Time Warner.
Why Do I Need One?
A strategic partnership can be an extremely powerful tactic that gives your business a competitive edge. According to a study by the CMO Council, 85 percent of business owners believe partnerships are essential for business success.There are several reasons why it is a commonly relied-upon growth plan.
- Expansion into new markets
- Increased brand awareness
- Product line extension
- Access to new customers
- Improved supply chain performance
- Added value for existing customers
- Acceleration of innovation
- Strengthening of weaknesses
- Sourcing of capital
A successful partnership must be built on a solid growth strategy and make sense from a capabilities perspective. The goals, values and culture of all partners should be aligned. You also need to have the right infrastructure in place. And the timing of the venture can be critical depending on the market. A partnership is a major endeavor and you absolutely want to get it right. Unfortunately, most organizations are not armed with the proper connections, resources and management capabilities to maximize the potential of a partnership. According to a report by the Business Performance Innovation Network (BPI):
- 43 percent of business partnerships have high failure rates.
- 45 percent are unable to maintain long-term, successful relationships.
- 42 percent of partnerships are not well leveraged.
- 67 percent of companies that agree to work together lack formal partnering strategies.
How to Get It Right
The smartest way to ensure that you are entering into a successful partnership is to seek the guidance of an advisor such as Benchmark International. We have the connections, experience, data-driven analytics, and knowledge to help you devise a carefully crafted growth strategy that is built on confidence and captures the most value. If you are a founder, an owner, an entrepreneur, or part of the leadership of an established company, we encourage you to reach out to us and start the conversation about how a strategic partnership can benefit your business.READ MORE >>
Benchmark International has successfully facilitated the acquisition of Credex Systems, Inc. (Credex) by Valsoft Corporation, Inc. (Valsoft). Credex is a vertical software solution that offers loan origination and servicing software. The cradle-to-grave software solution originates and administrates a loan throughout its existence, serving financial entities and their client base. Valsoft acquires and develops vertical market software companies, enabling each business to deliver the best mission-critical solutions for customers in their respective industry or niche. A key tenet of Valsoft’s philosophy is to invest in well-established businesses and foster an entrepreneurial environment that shapes a company into a leader in its respective industry. Unlike private equity and VC firms, Valsoft does not have a predefined investment horizon and looks to buy, hold, and create value through long-term partnerships with existing management and customers.
Michael Lightfoot, President and owner of Credex said “The sale of Credex to Valsoft was a quick process that took a number of turns during diligence. Throughout the engagement with Benchmark, the team acted as true advisor helping to walk me through each step of the process, and maintain the majority of my attention on running Credex on a day-to-day basis. I also appreciate the speed and transparency Valsoft operated with, allowing to move from first interest to a deal closing within 5 months.”
Chris Malouf, Associate of Mergers & Acquisitions at Valsoft, said “We are thrilled to have completed the acquisition of Credex. Pairing Michael’s expertise with our firm’s resources will allow us to seamlessly enter this market. We have plans to continue backing Michael Lightfoot as President of Credex and lead the charge for Valsoft’s expansion into loan origination and servicing.”
Benchmark International Associate Transaction Director David Steverson stated, “We’re extremely excited for Michael Lightfoot, the Credex family, and the Valsoft team. This transaction allows Valsoft to maintain their investment thesis while entering a new market, loan origination and servicing. Partnering Credex’ product offering with Valsoft’s industry knowledge and wealth of resources will allow Credex to develop into a prominent player within this market.”
The Complete Guide to Buying a Business
By Fred Steingold J.D.
Written by a Michigan Attorney who has extensive experience representing small businesses in several capacities, this book is a comprehensive resource that provides a thorough overview of the buying process with concrete examples. If you are looking to acquire a huge corporation, this is probably not the book for you. However, if you are seeking to purchase a small business, this book serves as a great guide to subjects such as financing, negotiating, comparisons of entities, and standard forms. It will also inform you of when you likely need to enlist the help of a professional broker or lawyer.
Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game
By Walker Deibel
Buying and growing an existing business is considered a smarter path to success than dealing with the pitfalls of start-up companies. This book outlines the ins and outs of becoming a successful acquisition entrepreneur, written by an investor who has co-founded three startups and acquired seven companies. It delves into beneficial topics such as spending less time raising capital, using ownership to achieve financial independence, discovering the best opportunities, and finding quality business brokers.
Buying a Business That Makes You Rich
By John Martinka
The author has of this book has more than 20 years of experience as a business buyer advocate, helping executives to abandon the corporate world to enjoy the freedoms of business ownership. In this book you will read about being smart when purchasing a business, including ways to avoiding overpaying and knowing the right questions to ask throughout the process. It offers smart methodologies and practical insights without overwhelming the reader with what can be a complex undertaking.
How to Buy a Business without Being Had: Successfully Negotiating the Purchase of a Small Business
By Jack Gibson
Case studies, practical advice, and simple terminology are all part of what make this book a great read for anyone looking to purchase a business. The author offers more than 30 years of experience helping entrepreneurs learn how to talk to sellers and brokers, with a focus on avoiding missteps. The book also includes commentary from business owners who wished they had known how to avoid common mistakes, as well as a useful study and discussion guide.
HBR Guide to Buying a Small Business: Think Big, Buy Small, Own Your Own Company (HBR Guide Series)
By Richard S. Ruback and Royce Yudkoff
This book is written from the perspective of professors at Harvard Business School as a guide to entrepreneurship for small business owners. The text was previously only available to Harvard students through the authors’ courses. It is a concise yet thorough resource that will arm you with important topics you should discuss with sellers, brokers and attorneys along the way when buying a small business.
Ready to Buy?
If you feel you are ready to buy a business, while these books can be helpful, Benchmark International can help ensure you are making the right move. Our strategists will use our insider knowledge and exclusive databases to connect you with the ideal match for an acquisition or growth plan.READ MORE >>
Through the year 2023, the global higher education market is expected to grow at a compound annual growth rate of more than 12%. There are several factors driving positive growth in this sector, from the high demand for technological innovations to the surge of internationalization.READ MORE >>
Benchmark International is pleased to announce that it has successfully facilitated an £8m deal between Total Resources and Mercia.
Founded five years ago after Managing Director, Les Thompson, acquired the assets of Lincolnshire-based Traffic Control and Management, South Tyneside-based Total Resources now operates across five depots throughout the UK, employing around 140 people and offering all aspects of traffic management.
A rapidly growing business, Total Resources was the winner of the fastest growing small business award at the annual Fastest 50 event at the end of 2018. Turnover has soared on a local level due to work at major concerts for Rihanna, Take That, and Bruce Springsteen, and the forthcoming Spice Girls tour, all at Sunderland’s Stadium of Light.
Mercia, provider of both equity and debt finance to small businesses based in the UK, will now allow Total Resources to expand throughout the UK.
The £8m deal for Total Resources has been a syndicated investment across three different funds bringing its venture, debt and growth investment teams together in a single transaction.READ MORE >>
The global real estate environment is off to a strong start for 2019. While uncertainties regarding trade, Brexit, and other geopolitical tensions linger, we have yet to see any major weaknesses in real estate markets. The sector continues to attract capital and pricing levels are holding steady thanks to strong capital flows.
Real Capital Analytics (RCA) reports that acquisitions of income-producing commercial real estate last year rose by 3 percent to $963.7 billion. That is the third highest annual total on record behind 2007 and 2015.
The Multifamily Sector
Multifamily housing is expected to continue to attract sustained investment and debt capital. Multifamily demand remains steady and is driving up rent prices as younger generations are being priced out of home ownership and older generations are downsizing. The top three emerging markets to watch in the United States for multifamily housing this year are Phoenix, Portland, and Tampa Bay.
The growing need for workforce housing is also driving the market for multifamily housing. In fact, workforce housing has actually outperformed the overall multifamily market in each of the last four years.According to a report by CBRE, workforce housing has brought in nearly $375 billion in investment over the last five years. That is more than 51 percent of the total for all multifamily asset classes.
Tech, Retail & E-commerce
Real estate fundamentals remain strong amid trends surrounding urbanization, retail, and ecommerce. Suburban markets are adapting to technology and becoming more urbanized with added focus on community-oriented retail concepts. Retail stores and shopping malls are undergoing an identity transformation, as retailers are adjusting their real estate needs to accommodate omnichannel experiences, especially in the U.S. and Europe. Additionally, e-commerce companies are adding smaller, satellite facilities to their networks of regional distribution centers as a reaction to the demand for fast, low-cost shipping.
Tech firms and flexible space providers continue to have a major impact on the global real estate market this year. Flexible space providers are targeting their focus on larger enterprises. More and more firms are leasing shared spaces. And as employees become more mobile, companies are adapting and coworking is becoming more popular. Coworking is primarily focused in high-wage markets and cities with a large number of professional services companies. Coworking spaces in tech markets are nearly double that of other markets.
Mixed-use real estate is also going to remain a significant opportunity, with the convergence of retail, office, residential, hospitality, and community-focused spaces. This adaptation is causing a shift in the types of tenants that properties are accommodating, resulting in shorter lease agreements.
REITs and Mergers & Acquisitions
Investors are expected to continue to diversify into secondary markets in search of yield. This includes real estate investment trusts (REITs), which have recently increased valuations and pay healthy dividends. Global REITs are projected to outperform other sectors and deliver strong returns in 2019. The property sectors among REITs expected to see the most M&A activity this year are industrial, self-storage, data center, multifamily, and student housing. Experts also predict the possibilities of some deals in the hotel REIT sector.
The year 2018 outperformed 2015’s prosperity for global commercial real estate investment in the current cycle, with a five percent increase in global investment volume. The U.S. accounted for 52 percent of global transactions. A total of six investors from Canada, France and China invested a record $41 billion in U.S. entities.
The value of U.S. entity-level transactions increased threefold last year, driven in majority by cross-border investment. Toronto-based Brookfield acquired Forest City Realty for $11 billion, making Brookfield the second-largest property owner in New York City, led only by the city government, and boasting a NYC portfolio worth around $32 billion. In 2018, Brookfield also acquired the second-largest U.S. mall owner, General Growth Properties, for $15 billion. Both Forest City and GGP were publicly traded REITs.
International property is sustaining its 2018 performances as a remarkably popular market. Some of the top cities for real estate investment in 2019 include Lisbon, Toronto, Dallas-Forth Worth, Melbourne, Singapore, Berlin, New York City, Vancouver, Raleigh, Montreal, Tokyo, Madrid, Osaka, and Sydney. Specifically, the city of Lisbon has been noted to be the 2019 investment capital of Europe. This is due to increased tourism, a growing economy, and competitively lower pricing.
If you are interested pursuing a growth strategy or an exit plan. No matter what sector you work or invest in, Benchmark International can help you take your aspirations to the next level.READ MORE >>
Benchmark International is pleased to announce the transaction between global technology group, Wärtsilä, and Ships Electronic Services (SES), specialists in navigation and communication electronics, installation, maintenance and repair services, primarily for commercial and leisure vessels.
Established in 1974, SES has its headquarters in Rochester along with nine other offices in the UK, where the company employs 47 staff. Together with its wholly-owned subsidiary Greenham Regis Ltd, SES holds a strong presence across the local marine services market.
Wärtsilä is a Finnish corporation listed on Nasdaq Helsinki that operates in smart technologies and complete lifecycle solutions for the marine and energy markets, maximising the environmental and economic performance of vessels and power plants for its customers. The company has operations in over 200 locations across more than 80 countries around the world, employing approximately 19,000 staff. In 2018, Wärtsilä’s net sales totalled €5.2 billion.
Shareholder of SES, Paul Rees, said: “We are very excited to join Wärtsilä. We have already identified several shared opportunities between the companies and look forward to bringing the enhanced service offering to our customers.”READ MORE >>
The telecommunications industry will be undergoing some new transitions this year, most notably due to the rollout of fifth generation (5G) technology. Global telecom revenue is forecasted to grow up to three percent through 2019.READ MORE >>
There has been a steep incline in private equity investors buying SaaS (software as a service) companies over the last five years with PE firms investing in, recapitalising, and outright buying numerous SaaS companies. In fact, private equity accounted for 2.5% of all private equity portfolio acquisitions in 2018.
So, what are the reasons for private equity firms investing so heavily into SaaS companies?READ MORE >>
While ongoing geopolitical uncertainties could present challenges in 2019, the overall outlook for the global retail industry remains optimistic. In the world’s top retail market, the United States, retail sales are predicted to grow more than 3 percent to exceed $5.5 trillion. But for the first time ever, China is expected to outperform the U.S. in retail sales. China is forecasted to see a 7.5 percent growth in retail sales this year, reaching $5.6 trillion.READ MORE >>
Venture capital investors are driving deal values back up for companies across the North according to new data by KPMG Enterprise's quarterly report on global trends – Venture Pulse.
Despite a decrease in value and volume compared to the first quarter of 2018, the number of VC transactions completed between January and March 2019 was 17, up from 12 in the final quarter of 2018, with the average deal value increasing from £2.17m to £2.91m.READ MORE >>
When it comes to the M&A Process, sellers often times have many questions. Here is a list of 7 frequently asked questions about the M&A process.READ MORE >>
When the time has come for you to sell your business, there are plenty of reasons why you do not want to embark on this journey alone. Enlisting the help of a trusted M&A advisor can make a world of difference in the process and, most importantly, the results.
A Better Process.
Selling a business takes time. It can take up to one year to complete a sale. Think about what you need to be doing during that time. You still have a company to run, and this is the most critical time for your company to be running smoothly and performing well. Selling a company requires a great deal of time and attention. For an owner, this time and attention needs to be focused on the day-to-day running of your business. You do not want be so preoccupied with the sale of your company that you end up neglecting the business that ultimately should be generating maximum results during this time. If your company falls short of expectations, it could result in a botched deal. Basically, you need to be operating your business as though you are not going to sell.
When you form a partnership with an experienced M&A advisor such as Benchmark International, you will have an expert dedicating their time to the sale of your business, so you can remain a strong leader for your company. You will still be heavily involved in the process, never missing an update on opportunities and negotiations. The difference is that you will not be bogged down by certain details, time critical deadlines on the deal won’t pull you away from key business situations, and your advisor will be there to resolve any issues that arise along the way.
Essentially, an M&A advisor is going to do all the heavy lifting for you. They will prepare the necessary marketing materials, find quality prospective buyers, market your business, negotiate terms, manage the due diligence process, arrange the closing, and even help you plan the transition and your exit strategy. Your time is precious and so is your business. Give them both the attentiveness they deserve.
Experienced buyers know what to look for in a company. They know how to get the most value from a merger or acquisition. Meanwhile, it is likely that you have never sold a business before, giving the buyer a major advantage in negotiating a sale. You need someone in your corner whose wholehearted motivation is to exceed your goals and get you the most value for your company. This includes the exploration of the full spectrum of your options, and even knowing when to walk away from a deal.
In a recent study titled The Value of Middle Market Investment Bankers:
- 100 percent of owners who sold their businesses with the help of an M&A advisor or investment bank said that the advisor added value to the transaction.
- For 84% of business owners, their final sale price was equal to or higher than the initial sale price estimate provided by their advisor.
- Business owners viewed “managing the M&A process” as the most valuable service provided by their advisor.
Selling your company is a very complex process. Some business owners think they can simply broker a sale through their accountant or their attorney, but these professionals do not have access to the databases, connections, and methodologies that you will gain with an M&A advisor. Another important quality that an M&A advisor brings to the table is a solid understanding of the market and precisely WHEN to sell to get the most value.
These are some characteristics that you should look for in an advisor:
- They understand your industry, your business, and its value.
- They have both global connections and local expertise that allow them to identify prospective buyers that are serious and high quality.
- They know the fair market value and will work to get you maximum value.
- They have a disciplined process and a proven track record.
- They have opportunities that are confidential and exclusive.
- They structure their compensation to align their interests to yours.
- They listen to your aspirations and concerns as a true partner.
Are You Ready to Sell?
If you feel that you are ready to sell your company, you will want to partner with an M&A firm such as Benchmark International sooner rather than later. Getting ahead of the game means that your business will be properly prepared for maximized value. However, no matter what stage you are at in the process, it is never too late to ask for our expertise.
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Benchmark International is pleased to announce the transaction between Dublin-based managed print services company, Office Technology, and leading certified technology company, Intuity.
Established in 1988, Office Technology oversees all aspects of clients’ print infrastructure, supplying and servicing Canon multi-functional devices as a gold member, as well as providing the software to manage the cohesion of machinery, predominantly for SME and corporate clients.READ MORE >>
Benchmark International has successfully facilitated the sale of its client, Machine Cutting Services to Montsi Investments, a 100% black-owned family investment company operating in South Africa and Ghana.
Machine Cutting Services, based in Modderfontein, South Africa, offers on-site machining services, products sales and rentals to, inter alia, the power generation, petro-chemical, mining, paper and sugar milling, and heavy engineering sectors. The company is an agent and distributor of prestigious, global brands of on-site machining tools as well as top quality plumbing tools.
Montsi Investments recognised the value in adding MCS to their stable of investments, which includes companies such as aggregate producers in South Africa and Ghana. Through their acquisition of the company they plan to expand its geographic footprint in Africa and leverage the improved B-BBEE score to secure new business.
“With a prior attempt at selling the business by another advisory having been unsuccessful, I was beginning to think I’d never get to retire, but the Benchmark team really came through for me and delivered on their promise to assist me in finding succession for my business”, stated the seller Mr Derek Holliday, adding “I felt well supported by Johann throughout the sale process. His expert guidance was invaluable.”
“We knew that a completely fresh approach to a wider market would be required” says Johann Haasbroek, the Transaction Director at Benchmark International. “The buyer was identified through the Benchmark process and once we conveyed the unique advantages that they would gain by acquiring the business; such as the growth that could achieved though the company’s superior ability to navigate the South African legislation in which the company operates, the buyer saw the potential for growth and engaged.”
Encouraged by what the deal indicates about the South African M&A industry, Andre Bresler the Managing Director at Benchmark International, concluded “This transaction is testament to the ever-increasing maturity and success of the BEE industrialist and investor market where strong interest was forthcoming from a number of strategically motivated buyers with impressive portfolios and track records of success, capable of adding genuine synergistic value.”READ MORE >>
If your business is in or serves one or more of the 8,762 neighborhoods identified by your state’s governor as a “Qualified Opportunity Zone” under the 2017 federal tax legislation, new buyers will be entering the market for your company in the coming months and they will be looking to make some quick deals.
When the tax cut law passed, investors in these zones were granted numerous attractive tax benefits including:
- Deferment until 2026 of tax on capital gains from the sale of projects outside the zones if those profits were now invested in any zone
- A 15% reduction certain capital gains taxes
- No capital gains taxes on any investment held for at least 10 years
But acquirers of businesses never took advantage of the new opportunity. Reports came back to the Administration that the statute called for the Treasury Department to implement regulations laying out the details as to which investments would qualify and absent those regulations there was too much concern that the “investments” would only cover real estate acquisitions and improvements.
Seeing that the real estate industry had wholeheartedly undertaken the desired action - investing in the zones – and wanting other investors such as acquirers of businesses to do the same, the President publicly released draft regulations last Wednesday.
The M&A investment community is quite pleased with the breadth and clarity of the regulations and appear to be jumping into action to exploit the new guidelines. And their action will likely be immediate. The incentives are set to cover only those investments made by the end of 2019.
To view all Qualified Opportunity Zones to see if your business may qualify, visit the IRS’s map here. https://www.cims.cdfifund.gov/preparation/?config=config_nmtc.xmland follow these instructions. https://www.cdfifund.gov/Pages/Opportunity-Zones.aspxAs this map of Tennessee demonstrates, you might be surprised which areas are covered. The official method of designation is by “census track” and you can also search this website by your track – if you know it.
The regulations remain complex as there are a number of independent ways for an operating business to qualify based on where income is generated, where labor is provided, where services are provided, where working capital is invested, and where tangible property is maintained – among others. But business acquirers are getting ahold of the new details, have the firepower to get command of them, and will very quickly be refocusing their searches in light of these significant benefits.
There is still time to get your business on the market to take advantage of this increased interest and the potential boost to your sale price that it should also carry with it. Eight months from engagement to closing is not difficult with a properly motivated seller and buyer – and nothing motivates people like tax breaks!
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If you are considering selling your business, but you are not completely sure you want to sell a 100% stake, “rolling over” (essentially, “retaining”) a minority interest in the business may be a favorable solution for you. Rolling over a minority interest allows you to retain less than 50% stake, along with certain rights that you can negotiate prior to sale. It is common for minority interest ownership to range from 20% to 30%. It is also sometimes referred to as non-controlling interest because you have very little influence over business decisions. This arrangement can be an ideal solution if you are not quite ready to relinquish your company altogether, but you do not want to deal with the burdens of ownership. In the case that you do want to remain involved in business decisions, there is the option to negotiate a seat on the board or certain contractual protections. These protections could apply to items such as the termination of certain employees, deviation from the operating budget, or relocation of the company’s offices, as a few examples.
Minority rollovers are becoming increasingly popular because of the many advantages these types of arrangements provide for both owners and investors. In fact, 2018 was a record-high year for venture capital spending, with $21 billion in minority rollovers. There is optimism that this activity will remain steady through 2019, depending on various macroeconomic issues across the globe.
Advantages of Selling a Majority Stake
A noteworthy benefit of being a minority owner is that you are able to share ownership in a growing business. A private equity investor is absolutely going to be driven to grow the business to boost the value for a future sale. They are going to invest the time and money (that you may not have) to make it thrive as much as possible. You get to sit back and relax while they do all the heavy lifting to grow the company that you started. The amount of money that private equity investors usually put into a business can be quite substantial and make a significant difference in the company’s value.
Since the majority investor intends to grow the business for a future sale, that second sale is another advantage for you as a minority owner. A larger, well-run business is going to sell with a larger price tag. This can often be the result of reduced competition, improved technologies, new products, and more efficiency. Consequently, even though you have a minority stake, you end up cashing out with a larger return.
Something else to consider when selling a majority stake in your business is the lower tax bill for the time being. Depending on how the deal is structured, you may not have to pay taxes on the equity you put back into the company. Taxes will not be owned until a future sale.
It is also worth keeping in mind that there is the possibility that you could re-purchase the majority stake in your business and re-establish control. However, the value of your company is likely going to be much higher, so there is the potential that it will be expensive. On the other hand, you may also elect to sell your equity back to the majority investor if the business does not perform as expected or should you decide that it is time for you to exit the business completely.
There is also the option of what is known as tag-along rights, which allow you to remain an owner even in the event that majority equity changes hands. Furthermore, it is not uncommon for a majority investor to require a drag-along provision. This means the minority owner would be required to participate in any sale of the company because the majority owner does not want them to be able to prevent a sale. These provisions would need to be established during the negotiation of any deal.
All owners of minority interests should assess different exit strategies and transfer restrictions. You will want sufficient protections in place while retaining the right to divest under beneficial terms and conditions. An experienced broker can help with exit planning and ensure that you orchestrate the best arrangement for you.
Are You Ready to Sell?
If you think it is time to sell a majority stake in your business, you are going to want to negotiate the most advantageous deal possible. You are putting a lot on the line and the process is sure to be complicated. In order to ensure that you get the right buyer, the right terms, and the right price, you need the right partner. Benchmark International has a team of specialists that arrange these types of deals every day. Even if you are not sure about selling, we can answer your questions and help you determine what is best for you, your business, and your exit plan. One simple phone call or email to us can start the process and provide you with the level of peace of mind that you deserve.READ MORE >>
The state of Tennessee is expected to see sustained economic growth in 2019. The state has a record-low unemployment rate, with nearly 43,000 new jobs projected for Tennesseans this year. The state’s inflation-adjusted gross domestic product is also expected to rise. The transportation and utilities sectors are predicted to see positive gains and the healthcare and real estate markets are expected to remain strong.
A Healthcare Hub
Since 2017, the U.S. state of Tennessee has experienced a surge in M&A activity. The healthcare and technology industries are major drivers behind the increased action, especially in the city of Nashville. In 2018, the private equity firm KKR purchased Envision Healthcare Corp. for $9.9 billion. Apollo Global Management acquired LifePoint Health for $5.6 billion. LifePoint Health then merged with RCCH HealthCare Partners. This momentum is expected to continue through 2019, with much optimism surrounding the healthcare market in particular.
According to Mergermarket, Nashville ranks fifth in the U.S. in terms of the overall value of healthcare M&A deals closed since 2015, with $30 billion in transactions. The upswing in activity is largely due to new technological and data opportunities in the healthcare sector.
In the early part of 2019, we have already seen major M&A ventures surrounding Nashville healthcare businesses. Maryland’s Omega Healthcare acquired Nashville’s MedEquities Realty Trust, Inc. for $600 million. HealthStream, Inc. purchased healthcare-training company Providigm for $18 million. HCA Healthcare, Inc. purchased North Carolina-based Mission Health for $1.5 billion. HCA now owns and operates more than 170 hospitals in 20 states across the country.
It is important to note that Nashville is home to the headquarters of almost 20 publicly traded healthcare companies and an overall industry that creates more than $92 billion in annual revenue. These healthcare companies employ more than 570,000 people worldwide. The area is anticipated to continue to shape the industry landscape in what is an increasingly inviting market. Strategic buyers and private equity investors will be keeping a close watch on the growing opportunities in this region as the year progresses.
The Real Estate Market
Another industry that is forecast to have a strong year in Tennessee is real estate, specifically in Nashville, which is home to more than 600,000 people. The city’s real estate market has continued to grow over the past decade. Home values increased 8.2% last year and are expected to go up 8% this year. According to the U.S. Census Bureau, Nashville ranks as the nation's fifth-surest investment bet for 2019. This real estate market is positively impacted by several factors, such as ample redevelopment opportunities, low mortgage rates, high demand for housing, a large student population, and plenty of young families. Because Nashville is also known as the Music City and boasts a major tourism industry, there is also a large market for tourism-related rentals.
The attractive quality of life is also a big draw. Last year, Nashville was ranked 11th out of the 100 best cities to live by U.S. News & World Report, up from 13th the year before. We will have to wait and see if it climbs even higher on the list in 2019.
In addition to the city of Nashville, the Memphis and Knoxville areas also offer attractive real estate markets for investors. This is due to affordable housing and high quality-of-life benefits.
Make a Move
If you are a business owner looking to create value, whether it’s in the state of Tennessee or on the other side of the world, contact Benchmark International to craft a strategy that best suits your company and your aspirations.
The outlook for the global construction market for the year of 2019 remains positive, with an expected five-percent sector-wide growth in revenue. Robust economies, low interest rates, and increased infrastructure spending are key factors behind the increased confidence. The world’s fastest growing market is the Asia Pacific region, due to growing investments in China and India’s construction sectors. In North America and Europe, growth is being driven by new technologies in already strong construction markets. Also, a number of South American and Middle Eastern countries may see their markets recover in the coming year and have the potential for growth in the future.
Mergers and acquisitions for the construction industry are poised to follow the vigorous deal activity of 2018. Construction tech startups raised $1.27 billion in venture funding in the first three quarters of 2018 alone. Public companies were seeking growth. There was increased interest in individual sectors such as energy. Private equity firms were actively buying and selling. Another significant factor was a need for ownership changes due to a growing retirement-age population. These trends are predicted to continue throughout 2019.
Construction technology startups are expected to continue to have a considerable impact this year. This industry segment has seen more than $10 billion in funding over the past 10 years, with most of the money coming from early-stage venture capital deals. As these tech companies evolve, bigger firms are making full acquisitions. One strategic reason behind these large acquisitions is for companies to procure more talent in a more efficient manner, which in turn is anticipated to drive business growth.
Society is seeing a heightened focus on infrastructure upgrades and the creation of smart cities. In 2016, smart-city tech spending reached $80 billion globally. By 2021, spending is expected to grow to $135 billion. Smart cities use Internet sensors and other technologies to connect elements across a city to gather data and enhance the lives of its residents. Partnerships between private and public companies are helping governments incorporate new technologies in an increasingly urbanized world. The advent of smart cities was initially seen in Europe, and now the U.S. has begun to integrate technology into urban infrastructure.
The quickly growing modular construction market is projected to reach $157 billion by 2023. The capability to build taller modular buildings is reaching new heights, with some buildings stacking up to almost 20 stories. This offsite type of construction is addressing certain industry needs, such as the need for skilled labor, the need for affordable housing, and the need to complete projects more quickly.
A rapidly emerging trend that many investors are watching closely is connected construction. Companies are incorporating technology into construction sites to save time and money. Bluetooth connectivity is driving the emergence of new worksite tools that can be tracked, monitored, and even deactivated. Mesh networks are enabling sites to be fully connected to wireless networks in order to streamline processes around obstacles in the way of man-hours, status updates, supply deliveries, blueprint consultations, and more.
These emerging technologies have prompted several recent acquisitions, just to name a few.
- Autodesk Inc. purchased construction productivity software company PlanGrid for $875 million.
- Autodesk also spent $275 million to buy BuildingConnected, a networking platform of more than 700,000 construction professionals.
- Trimble bought construction software company Viewpoint from Bain Capital for $1.2 billion.
Enlist Our Expertise
If you are interested in buying, selling, creating a growth strategy, or even devising an exit plan for your business, contact Benchmark International to get the expertise that is proven to make successful deals happen around the world every day.
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Benchmark International is pleased to announce our exclusive attendance at the national ACG Intergrowth 2019 conference on May 6th-8th in Orlando, Florida. This is a valuable opportunity where we meet with thousands of well-funded private equity deal-makers and draw their attention to the opportunities we are currently representing.
We have had major success at this event in the past with offers on over 75% of the businesses we featured. This creates competitive tension between financial buyers and strategic buyers.
ACG’s annual event is specifically designed for those on the hunt for private capital in the middle market. With over 2,000 registered attendees and $189 billion of investable capital, this is not your typical meet-and-greet. We currently have 60 one-on-one meetings scheduled with business development team members (the people who analyze Teasers and CIMs) of these PE funds.
Would you like to be showcased to leading dealmakers with strong, acquisitive appetites? Naturally, we present only a select number of companies for each event, so we would encourage you to contact us now to ensure your business is included.
*All opportunities must be submitted by April 30th, 2019.
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Once you have decided it is the right time to sell your company, it’s time to find the right buyer. You are going to want to sell to someone that shares your vision for the business that you worked so hard to build. At the same time, you do not want to waste your time on prospects that are not serious or financially fit. An important step in the vetting process is knowing what information you should request from potential buyers. Start by reviewing this list of questions to generate additional ideas and help you manage expectations.
“Do you have prior experience with acquiring a business?”
A buyer’s track record is paramount when considering whether or not they have the necessary resources and competencies to handle an acquisition. What is their experience? Do they have any success stories? What about failures? Nobody wants to sell to someone who has acquired businesses only to see them fail.
“Why are you interested in buying my business?”
Understanding a buyer’s motives is crucial when seeking someone who is going to operate in the best interests of your company. If they share a passion for what you created and have a solid plan to build upon that success, they are far more likely to take your business in the right direction. Asking this question can also help you ascertain how serious they are about working towards a deal.
“How do you plan to finance the sale?”
Securing capital is often complicated and you can learn a great deal about a buyer from their answer to this question. It will demonstrate how experienced and how serious they truly are, helping you to weed out the dreamers. How do they plan to structure the deal? Can they prove that they have the funds available? How much cash is on the table? A serious buyer is going to be adequately prepared to answer this question and may even provide documentation.
“How long have you been looking to acquire a business?”
This is a serious question when it comes to avoiding giant wastes of your time. There are people who will claim to be eager and ready to invest in a business, but they really are more interested in talking about the idea of it, as opposed to actually sealing any deal. How many deals have they passed on, and why? Ask for explanations. Sometimes deals simply do not work out. But if someone has a routine of waiting around for the perfect deal for years, you probably want to move on.
“How do you plan to carry on the legacy of my family business?”
If you have a family-owned business, it is likely that it matters to you that the company’s legacy remains in tact. This means you need to find a buyer that cares about maintaining its heritage and has a plan to do so. If you have family that will continue to be employed with the company, you will want assurance that the new owner is including them in their plans.
Don’t go it alone.
There are many considerations when seeking the right buyer for your business. To help you navigate the entire process, it is vastly beneficial to partner with a mergers and acquisitions firm that has the connections and resources to match you with the right investor. A firm that cares about the future of your business. The experts at Benchmark International will do all the homework for you and protect your interests to ensure that you get the very best deal possible.READ MORE >>