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Benchmark International (South Africa) Closes 9 Deals in 9 Weeks

Benchmark International’s South African office has experienced a sharp increase in deal flow and activity. The company reports having received 51% more non-disclosure agreements from interested parties and a 71% increase in the number of offers received for client businesses than in the corresponding period last year.

The volume of transactions concluded by Benchmark’s South African office confirms the positive trend identified in the recently published Intralinks Deal Flow Predictor, which relies on early-stage transaction forecasts compiled from data on M&A due diligence activity in virtual data rooms. The predictive models for the second half of 2019 suggested an increase in the number of deals to be announced in the order of 5% for the EMEA region.

Benchmark International—demonstrating this trend—is pleased to have facilitated the following transactions in recent weeks:

  1. The investment by way of share subscription in Shift South (Pty) Ltd, trading as SweepSouth, by MIH Holdings, trading as Naspers Foundry

  2. The sale of a majority interest in Counterpoint Trading 439 (Pty) Ltd to Shave and Gibson Packaging (Pty) Ltd

  3. The merger of two undisclosed prominent e-commerce companies

  4. The disposal of Groupline Projects (Pty) Ltd by Wonderstone Ltd who are in turn owned by the JSE listed group Assore Ltd to Mokoena Holdings (Pty) Ltd

  5. The sale of Muffin Mate Coastal (Pty) Ltd to Ekuzeni Supplies (Pty) Ltd

  6. The sale of Jordan Human Resources to Vinton Holdings (Pty) Ltd

  7. The sale of an undisclosed mining equipment manufacturer to an undisclosed Canadian equipment supplier

  8. The acquisition of Ciba Packaging (Pty) Ltd’s non-core flexible food assets by Lampac CC, trading as Packaging World

  9. The sale of Nology (Pty) Ltd and Nology Distribution (Pty) Ltd to a multinational technology holding company

Commenting on the transactions, Andre Bresler, Managing Partner at Benchmark International’s South African office, remarked, “The range of transactions is a testament to the maturing M&A landscape in South Africa as well as the depth of the Benchmark team as these nine deals represent a very broad spectrum of M&A activity—from a capital raise to a merger and both partial and full disposals. There are private equity and trade-buyer deals, cross-border and domestic transactions, an acquisition, and even the disposal of a non-core asset of a listed entity. It’s certainly an exciting time for M&A in South Africa with no significant slow-down expected; we anticipate a number of additional transactions to finalize in the last quarter too.”

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Should You Hire An M&A Advisor To Sell Your Business?

That’s an easy answer. YES! You absolutely should hire an M&A advisor to sell your business. Here’s why.

It’s Not Easy

The process of selling a company is guaranteed to be complicated. While an accomplished attorney or accountant can help, you are going to need a true expert intermediary to handle the entire venture if you are serious about selling and getting the best possible deal.

Consider the seemingly endless amount of work that needs to be done.

• Data and documentation must be produced and organized, stretching back several years to a decade. This is going to include financials, vendors, contracts, and so much more. Do not underestimate how overwhelming the paperwork will be.

• Potential buyers will need to be identified and vetted. A good M&A advisor has access to connections and a knowledge base that you would otherwise never have, opening up an entirely new realm of potential buyers. This process will include a fair share of phone calls, emails, and face-to-face meetings, all of which add up to be very time-consuming.

• You are going to need an experienced negotiator that knows how to maximize your business value and lay the groundwork for getting you what you want. This means knowing how to push a deal forward while providing you with peace of mind that things are on the right track. This also means creating a competitive bidding landscape.

Get Peace of Mind

Selling your business is not a process that should be taken lightly. Countless decisions will need to be made. Consider the reality of what is going to be required and embrace the fact that you cannot shoulder the burden and run your company. Make sure you can sleep at night. Find an M&A advisor that will find you the right buyer, deal with the minutiae, and get the job done—all while sharing your vision for the company, as well as your exit strategy.

They Can Get You More Money

It is also important to note that an M&A advisor is more likely to get you more money. Research shows that private sellers receive significantly higher acquisition premiums when they retain advisors, in the range of six to 25%. Additional research shows that 84% of mid-market business owners who hired an M&A advisor reported that the final sale price for their business was equal to or higher than the initial sale price estimate provided. After all, they know how to value a company properly.

Another benefit of having an M&A advisor is that it shows buyers that you are a serious seller. As a result, hiring an M&A advisor can help drive up your company valuation and get you more favorable terms.

Ready to explore your exit and growth options?

What to Look for in an M&A Advisor

Enlisting the guidance of the wrong advisor can be disastrous. The last thing you want is to end up in negotiations with someone who does not have your wants and needs in mind at all times. Even worse, they can slow down the process and cost you a fortune. When making this decision, know what to look for:

• You want an advisor that understands you, your company, and what you expect to achieve from the sale.

• Consider their experience in your sector, as well as their geographic connections, and how that can work for your business. Global connections are especially helpful. And do they usually work with businesses that are around the same size as yours?

• They will adequately prepare you and manage your expectations.

• They will work diligently to find the RIGHT buyer, not just the easiest or the richest.

• They should be honest, and you should trust them because they have demonstrated that they are worthy of it.

• Their track record will speak for itself. A quality business acquisition advisor is going to have a proven reputation, client testimonials, credentials, and accolades.

• Also, ask if they use any proprietary technologies or databases and how it helps them gain insight into specific industries.

Take your time in evaluating potential advisors. A good firm will patiently accommodate your process. You are going to be working closely with them through a grueling journey, so you will want to feel comfortable with their team and confident that they will work around the clock to get you the most favorable results possible.

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The Value In Hiring An M&A Advisor

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.

Ready to explore your exit and growth options?

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.  

Better Results.  

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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Five Reasons Why It’s Worth Investing in an M&A Adviser When Selling Your Business

You have come to a point in your business life where you have decided that it is time to sell and move onto the next project. Of course, you want to command the best price for your business and explore all the opportunities available. As such, you have considered an M&A adviser to help in the process – but is it really worth it? They could help you generate more value for your business but if you factor in the fee for engaging their services, will you make any more money?

Then again, there are many advantages to hiring an M&A adviser, which are not just limited to value. If you have thought about hiring an M&A adviser, but are unsure of the benefits, consider the below:

 Ready to explore your exit and growth options?


They can Minimise Distractions During the Process

You know your business the best and if you are knowledgeable about the M&A process you could facilitate the transaction yourself – although this doesn’t mean you should. After all, an M&A transaction takes a significant amount of time and the time you have to spend on the transaction could end up being detrimental to business performance. As the value of a business is more often than not linked to financial performance, you need to focus your efforts into making sure the company is performing the best it can be, rather than focusing on the transaction itself.

 

They can Source a Larger Pool of Buyers

If you’re thinking of selling your business you may have an idea of the acquirers you want to approach. This is good, but an M&A adviser constantly networks with various strategic and financial buyers on a national and international basis in various industries; therefore, they have a very large pool of acquirers at their fingertips to contact about the opportunity. Not only is an M&A adviser’s pool of acquirers large, it is also varied, which means they can think outside the box and a lucrative deal could be sourced cross-sector. Another benefit of generating interest from a large pool of acquirers is you are more likely to have multiple competing bids, strengthening your negotiating stance.

 

They can Negotiate a Favourable Deal

As mentioned, an M&A adviser can help to create a competitive bidding environment which can lead to a better deal being negotiated; however, this is not the only way an M&A adviser negotiates on your behalf. Often, deals are not for 100% cash so an M&A adviser will negotiate a deal structure so both parties can reach a compromise and agreement. This can be very beneficial for you if, for example, you have just secured a large contract where earnings will increase over the next year, as, if the deal has been based on a multiple of current earnings, then you will not be correctly compensated for the contract you have secured. Therefore, an M&A adviser will negotiate a deal which will maximise value beyond the purchase price.

 

They can Protect your Interests

It is in your best interest to keep the sale of your company confidential – if it gets out that you are selling this could potentially alienate employees and customers and give your competition the upper hand. By yourself, when approaching potential acquirers, it is difficult to protect the identity of the company as it’s not easy to solicit interest without disclosing who you are. An M&A adviser, on the other hand, will have interested parties sign a non-disclosure agreement before they are given any information about the business, including the name of the business and the owner. At this stage, it is also important to gauge whether the company you are approaching has the finances to purchase your company – again, this is something which is difficult to do without compromising confidentiality.

 

They Add Valuable Resource

They say ‘first impressions are the most lasting’ so when it comes to selling your business, it is important that a potential acquirer’s first impression is first rate. An M&A adviser can assist with this through their proven processes that help businesses to market themselves as the complete package. As well, engaging an M&A adviser can add credibility to potential buyers as they can see that you are serious about conducting a transaction, which can save time and improve offers.

 

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Top Mistakes to Avoid When Selling

So you’ve made the big decision – you’re going to sell your business. This is likely a stressful time for you as have probably spent a lot of time and resource building up the company and may be nervous about seeing it pass over to new hands. So, from here on in, you would like to minimise the amount of stress involved by avoiding any mistakes which can easily be averted. The following are common mistakes to avoid and how Benchmark International can help:

Only Pursuing the Largest Acquirer

Surely pursuing the largest acquirer is in your best interests as they will be able to afford a premium for the company?

While they may be able to pay a premium for the company, they may not necessarily do so. An acquirer is likely to pay a premium for your company because there are synergies in place such as similar markets, products or customers that could be combined, but a large acquirer typically does not need to make the acquisition to enter these markets. An acquisitive party could also benefit from economies of scale and, therefore, will pay more for the target, but a large acquirer is unlikely to benefit from this. Even if a large acquirer is willing to pay a premium, they may absorb operations into their own company, which can cause complications for the handover, particularly if you are loyal to existing staff.

How Benchmark International Can Help: Look at all aspects of the deal and how it can benefit your company. Benchmark International can assist with sourcing the best fit for your company.

 

Ready to explore your exit and growth options?

 

Not Looking at the Bigger Picture

You’ve just received an offer from a potential acquirer – on the surface of it, it looks good, surpassing your expectations. However, the structure of the deal as a whole needs to be considered, not just the total value. For example, the consideration could be deferred, or contingent on future earnings, meaning you are not receiving all cash upon completion. It is also important that if you do decide on a structured deal, that these elements are protected, ensuring you receive the consideration.  

How Benchmark International Can Help: Benchmark International will thoroughly analyse all offers received, negotiate earn-out protections and can assess any contingent targets to ensure that the seller is able to maximise the consideration received. 

Not Creating Competitive Tension

It can certainly be a benefit to enter into the M&A process with potential acquirers in mind, perhaps one of these has even approached you at some point. However, even though it may be tempting to dive straight into a deal with an acquirer that wants you and complements your company perfectly, it is still vital to create competitive tension by generating interest from other potential acquirers. If the acquirer in mind can sense that they are the only one with an offer on the table and that you are anxious to sell to them, they could take advantage of this with a low offer.

How Benchmark International Can Help: Benchmark International will employ an approach where all potential acquirers are approached and exhausted before accepting any offers.

Using an M&A Sector Specialist

This may seem like an odd ‘mistake’ to make – why wouldn’t you want to use an M&A specialist operating specifically in your sector, surely you don’t want a generalist?

The reasoning behind this is that a general M&A firm will be able to think outside the box and target a large pool of acquirers, not limiting itself to those just in your sector.

How Benchmark International Can Help: Benchmark International has a vast and growing number of contacts giving you the best chances of receiving multiple offers, as well as significant experience across a broad number of sectors, leveraging this to identify the areas where the greatest synergies can be exploited.

Leaving it Too Long

To obtain the best price and right fit for your company, it is crucial to enter the market at the right time. It is important to strike a balance between seeking to sell when the company is on a growth curve, but also not missing the window of opportunity in the market cycle. Equally, it is important not to sell when you become desperate (e.g. you are looking at retiring soon) as acquirers could become aware of this and lower their offer accordingly.

How Benchmark International Can Help: Look at selling earlier than anticipated, not when you want an imminent exit. Benchmark International can best advise on when the right time is
to sell.

Neglecting the Day-to-Day Running of the Business

M&A transactions can be time consuming, but it is important not to let it get in the way of running the business. If an acquirer is interested in the business because profits are increasing, or a new product is due to be released to the market, for example, and this does not come into fruition because  you have taken your eye off the ball, then this could lead a buyer to renegotiate, or call the whole deal off.

How Benchmark International Can Help: The pressure of selling your business can be alleviated by Benchmark International as it will handle negotiations, leaving you to focus on running your company.

Not Negotiating Effectively at Critical Stages

Offers may go back and forth between yourself and the potential acquirer and at this point you are in a good position to negotiate. It is not until the Letter of Intent (LoI) is signed that the advantage swings to the buyer. Although the LoI is not typically legally binding it does usually stipulate a period where the seller cannot pursue further leads in the market (an exclusivity period), so competitive tension is lost. It is important, therefore, that you are completely happy with the terms (which can include such things as price, length of the exclusivity period etc.) before the LoI is signed to avoid either having to back out of a deal that could have been lucrative or being tied to a lengthy exclusivity period.

How Benchmark International Can Help: In all stages of negotiating, Benchmark International will do this on your behalf with your best interests in mind.

Author:
Lee Ritchie
Senior Director
Benchmark International

T: +44 (0) 1865 410 050
E: Ritchie@benchmarkcorporate.com

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If Business Valuation Was A Science…

Determining the value of your business is not as simple as looking at the numbers, applying tried and tested formulas, and concluding. Were it that straightforward all business valuations would be virtually identical. The fact that they are not is sure proof that valuation is not a science, it can only be an art.

If Mergers and Acquisitions (M&A) was as straightforward as calculating the theoretical value of a business, based on historical performance and using that to determine market value I would need something more constructive to do with my time.

Valuation is not as primitive as we have been led to believe. Whilst transaction values are commonly represented as a multiple of earnings this is merely the accepted vernacular used to report on a concluded transaction and almost never the methodology used to arrive at the value being reported.

The worth of a business is often determined by the category of buyer engaged. Financial buyers can add significant value to a business in the right stage of its life cycle but may not assume complete ownership, thereby delivering value for the seller simultaneously with their own. The right strategic acquirer for any business would be one that can unlock a better future for the business, and is willing to recognize, and compensate, a seller for the true value the entity represents to them.

Comparing the experience of so many clients, over so many years, and avidly following the outcomes of all the transactions published in South Africa there is little dispute that businesses are an asset class, like any other, and that the best value of all asset classes are only ever realized through competitive processes irrespective of whether the acquirer has financial or strategic motives.  

 

Ready to explore your exit and growth options?

 

1.  The itch of business valuation

Simplistically, for the right acquirer - one seeking an outcome that extends past a short-term return on their initial investment - valuation is more a function of the buyer's next best alternative, than it is a businesses’ historic performance.

It would be naïve to think that the myriad of accepted valuation methodologies have no place in the process but identifying, engaging and recognising the benefits of the acquisition for a variety of strategically motivated buyers is essential in determining value in this context.

Considering a variety of appropriate valuation metrics, the parameters applied and then being able to balance these against the alternative investment required to achieve a similar outcome is where the key determinant of value lies. This is a complex process that unlocks the correct value for buyer and seller alike and it is a result that is rarely achieved without engaging with a wide variety of different acquirers and being prepared to "kiss a few frogs"

The most valuable assets on the planet are only ever sold through competitive processes where buyers have the benefit of understanding and determining value in the context of their own motives, having considered their available alternatives. It is for this reason that when marketing a business, it should never be done with a price attached. 

2.  An aggressive multiple

Whilst conventional wisdom is firm on industry average multiples, case studies abound, and the business community is regularly astounded by stated multiples achieved when companies change hands.

Beneath the glamour, the reality is that multiples are rarely used as a determinant of value, but almost without exclusion applied to understand it. Multiples represent little more than a simplistic metric that reflects an understanding of how many years a business would need to reliably deliver historic earnings in order for the acquirer to recoup their investment.

In the same way as a net asset value (NAV) valuation would unfairly discriminate against service businesses, multiples discriminate against asset rich companies. For strategic acquirers, with motives beyond an internal rate of return - measured against historic earnings - valuation is sophisticated.  It relies on an assessment of whether the business represents the correct vehicle to achieve the strategic objectives, modelling the future returns and assessing risk. Valuation in these circumstances will naturally consider it, but places little reliance on the past performance of a business constrained by capital or the conservatism of a private owner to formulate the future value of such investment. 

Whilst there are Instances where the product of such an exercise matches commonly accepted multiples, there are equally as many valuations that, on the face of it, represent unfathomable results. 

3.  A better tomorrow for the buyer

It would be irresponsible to advocate that that return on investment is not a consideration when determining value - corporate companies and private equity firms typically all have investment committees, boards and shareholders that assess the financial impact of any transaction. It is rare that such decisions are ever vested with a single individual, or that the valuation is derived from their personal desire to own a company or brand.

The art of valuation requires a reliable determination of the synergies between buyer and seller and an accurate assessment of the risks and benefits of the investment. Risk and reward are inherently related and skilled negotiation is required to find solutions that mitigate, or de-risk a transaction for buyer and seller alike, in order to underpin the value
of a transaction.

Financial buyers can be very good acquirers, especially in circumstances where they are co-investing alongside existing owners, staff or management to provide growth funding. When seeking a strategic partner for a business the acquirer should always be unable to unlock value beyond the equivalent of a few years of historical earnings. It is for this reason that the disparity between valuations by trade and financial buyers exists, and why determining the appropriate form of acquirer for any business is a function of the objectives of the seller.

4.  Passing-on the baton, or living the legacy

The motives for a sale can be varied and extend from retirement to funding and growth, from ill-health to a desire to focus on the technical (as opposed to management and administration) aspects, of the business.

Value for buyers and sellers comes in many different forms. For sellers it is their ultimate objective that determines whether they have achieved value in a transaction. For sellers it may be as simple as the price achieved or it could extend to value beyond the balance sheet as diverse as leveraging the acquirer’s BEE credentials, unconstrained access to growth capital or even to secure a future for loyal staff.

For both local and international buyers alike, the intangibles may be as straightforward as speed to market in a new geography who would otherwise not readily secure vendor numbers with the existing customers of the target business. An acquisition may be motivated by access to complimentary technology, skills or distribution agencies to diversify their own offering. Whatever the motives, an assessment of the future of the staff will always be an important aspect to both parties.

There are few, if any businesses, that are anything without the loyal, skilled and hardworking people that deliver for the clients of a business. The quality of resources, succession and staff retention are all factors that weigh on a decision to transact. Navigating the impact of a transaction on staff is a factor that cannot be ignored and the timing of such announcements can be meaningful.

Author:
Andre Bresler
Managing Director
Benchmark International

T: +44 (0) 1865 410 050
E: Bresler@benchmarkcorporate.com

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Benchmark International has Closed Eight Transactions in Just Eight Days

Benchmark International is delighted to announce the closing of eight deals in just eight days – a record amount closed for the company in such a short space of time.

The clients were from a diverse range of sectors, including those in building and construction, document management, manufacturing, ambulance services, IT, and the distribution of medical products. Benchmark International has capitalised on confidence returning to the market by executing this number of deals in as many days, conducting transactions with private investors, private equity firms and trade buyers, both domestically and internationally, with locations spanning Dublin, Israel and the USA.

Furthering this success, Benchmark International is looking to build on this momentum in June and July as its pipeline is stronger than ever.

Benchmark International’s ability to close this number of deals in a short period of time and its ability to continue to do so is evidence of the company’s excellence in successfully navigating the roads of a middle-market deal and achieving results that gratify the buyers and sellers.

Choosing the right intermediary is a critical decision in reaching maximum value for an exit and growth strategy. Benchmark International has a team of M&A experts and an established network to find quality buyers to make deals happen. Time and time again, clients are delighted by Benchmark International’s ability to bring them a deal that exceeds expectations.

 

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You Need an M&A Specialist, Not an Industry Expert

It’s time to dispel the myth that it’s better to use an industry expert versus a mergers and acquisitions expert for the sale of a business. At times, sellers are apprehensive about engaging with a mergers and acquisitions firm that doesn’t specialize in one specific industry, and they say they would rather use an industry expert instead. This isn’t the best strategy for a seller who hopes to gain the most value for his or her business.

The mergers and acquisitions cycle is constantly changing. That’s why it’s important for mergers and acquisitions firms to stay on top of industry trends and stay abreast of any new developments. At Benchmark International, we are M&A professionals who work in all industries. Our business is selling businesses, and we understand the industry specifics.

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Benchmark International Closes 14 US-based Deals in the first half of 2017

Following on last year’s impressive 26 closings, Benchmark International’s US offices represented sellers on 14 transactions in the first six months of 2017. This was due in no small part to a 30-day span in which Benchmark International closed ten deals globally, with six of those being for US-based sellers.

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Beware of Strangers Bearing Gifts

It appears many buyers are once again attempting to bag bargain acquisitions by exploiting business owners blinded by multi-million pound cheques and disadvantaged by a lack of advice from a seasoned M&A professional.

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Benchmark International Closed 10 Transactions in Just 30 Days!

Benchmark International is taking full advantage of the strength in the M&A middle market. We are delighted to announce the closing of 10 deals in just 30 days; and, our clients are thrilled with the results.

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M&A FAQs: We Answer Your Questions

The team at Benchmark International is often approached by business owners with questions about M&A and what the typical process looks like. As with most things in the business world, one merger or acquisition is rarely the same as the last, but there are some key areas that you need to be aware of if you are thinking of buying or selling a business.

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Outsiders Take Away Family Business “X Factor”, Says Timpson

In a recent Telegraph column, John Timpson, fourth generation chairman of multi-service retailer Timpson, criticised the idea of bringing outside professional managers into family businesses, stating they are at risk of losing their “x factor”.

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Preparing for a Transaction – Expect the unexpected

In many cases, mid-market business owners and entrepreneurs, like you, only go through the mergers and acquisitions process once in a lifetime. It’s difficult to know what to expect from a transaction, and business owners often, unknowingly, limit their chances of achieving an ideal outcome for what will likely be the biggest deal of their lives.

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Top tips for preparing to sell your IT business

Oculus, the virtual subsidiary of Facebook, has purchased British firm Surreal Vision as part of a drive to acquire virtual reality-focused businesses. The team at Surreal Vision is said to be moving to Washington to work at the Oculus lab. So how do small IT businesses get on the radar of the bigger companies if their owners have acquisition on their mind? Here are some top tips for you if you are considering selling your IT business and want to ensure that you attract the best buyers.

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Lessons to be learned from someone who has sold their company

In a recent article, “10 surprising lessons learned from selling my company to eBay”, internet entrepreneur, Kristopher B. Jones, founder and former president and CEO of Pepperjam details the lessons he learned during the process of selling his company.

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Adjusting your accounts to enhance sale value

Many business owners, particularly those in the lower-middle market, will often attempt to reduce their tax liability. This practice is commonplace throughout SMEs, a perk that enables business owners the ability to keep hold of more of what they earn.

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Are M&A advisers really necessary?

Time and time again, when discussing the potential sale of their business with owners, one question frequently arises: “Can’t I just sell the business myself?”

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The importance of identifying active acquirers

Many business owners believe they can sell their business on their own, without using the services of an M&A adviser. That may be the case; however, this viewpoint fails to consider the negative effect on the business that the process of selling and the time it takes will have. Whilst a business owner could potentially sell without specialist advice, it’s highly likely that the eventual value received will be much lower – indeed, without an experienced M&A research, marketing and negotiating team behind them, it almost certainly will be.

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Undervaluing the role of an M&A adviser may cost in the long run

Many business owners make one key mistake when selling their business: underestimating the value of their M&A adviser. Business owners will often marginalise their appointed M&A adviser to such an extent that it may seem their role is overly costly;however, whilst not all M&A advisers can justify their costs, a good one with strong credentials will surprise most of their clients by truly demonstrating the value an adviser can actually add.

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How much you receive for your company depends on how you sell it

As M&A specialists we are asked one question significantly more often than any other . . .  ‘How much is my business worth?’ Most business owners expect us to give a definitive answer, however, the simple fact is that whilst a tentative valuation can be placed on a company, the acquirer and the manner in which it is sold largely determine its value.

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Beware of strangers baring gifts

It appears that many buyers are currently on the prowl, attempting to bag bargain acquisitions by exploiting business owners blinded by multi-million Dollar cheques and disadvantaged by a lack of advice from a seasoned M&A professional.

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3 vital components for a successful deal completion

Market factors inevitably play the most significant role in successful deal completions. Industry conditions, the state of local and global economies and country specific governmental legislative environments will largely effect demand and realized value upon any company sale.

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Turning the 'one size fits all' approach on its head

Within the company sales industry many brokers, investment banks and M&A companies often adopt a 'one size fits all' approach when it comes to structuring exit solutions for their clients.

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Don't gamble with your future - Plan your exit strategy

Dealing with business owners day in day out we find it startling how so few have have a considered exit strategy in place. Many believe that when the time comes to retire or move on to something else, all will simply fall into place. The reality is far from that and due to external market factors, timing and planning is crucial in this decision in order to receive maximum value for what will most likely be a business owners most valuable and prized asset.

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