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Acquirer FAQs on Benchmark International's Relationships With Clients

Over the years, we’ve collected the questions acquirers most often ask about our relationships with our clients. We hope you will find working with us to be a beneficial experience and invite you to learn a bit more about our relationship with our clients by looking over these most frequently asked questions.

Do you ever represent acquirers? No, we are and always have been a 100% sell-side shop. Many of our team members have significant buy-side experience but we prefer to have a very narrow specialty and we take all our fees from the seller. We have, from time to time, been asked by serial acquirers to search for targets with specific criteria. We are happy to do this and when we do, we do not seek engagement by or fees from the acquirer. Instead, we work to sign up the seller as a client and then bring them to the inquiring potential buyer for a pre-market first look. 

Is the relationship with your client exclusive? Yes, all of our contracts are executed on a sole and exclusive basis. The financial investment we make in each of our clients is far greater than the typical broker in the mid and lower-mid market. The process only works if we work on this basis. For the same reason, we do not co-broker with other sell-side brokers.

 

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How are you compensated? We require a one-time retainer from all clients upon engagement and we have a success fee due upon (and at) closing. The one-time retainer is significant enough to ensure that our client is serious about undertaking the process but not large enough to muddy the waters as to our incentive. For us, the profit is in the success fee. Our success fee is a percentage of the total benefit our client will receive from you as a result of the transaction, subject to a smaller fixed minimum amount. Our contract states that it is to be paid at closing by the acquirer out of the purchase price (on behalf of the seller) on the funds flow memo.

What authority do you have? We never have authority to bind our clients in any manner. We have authority to release the teaser, which they will have previously approved of in writing, as we see fit. Following the execution of a NDA by an acquirer and our client’s written sign off on that NDA and acquirer, we are authorized to release the Confidential Information Memorandum and have wide latitude to discuss anything relevant to a potential transaction.

Are your clients tied to you for a fixed term? No. If one of our clients no longer desires to sell, they can terminate our contract by written notice. Termination is not valid if delivered while engaged in negotiations with an acquirer. In exchange for this right to come off market at any time and to defend the exclusive nature of our engagement, we have tails that we feel are industry standard.

 

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What visibility do your clients have into the exact size of your fee? We will provide a pro forma invoice to our clients at any time. All they need to do is ask. This may be upon presentment of proposed letter of intent (LOI), upon execution of an LOI, upon review of the first draft of the definitive agreements, or even the day before closing. Our contract obligates us to do this and we believe it is the most productive way to handle the issue of fees. We encourage our clients to ask early and often. Our accounts department can typically prepare these within 24 hours of the request and they are, of course, subject to modification if and as the deal develops or changes.

What notification and information rights do you have? Our clients are obligated to keep us informed of their negotiations and provide copies of agreements relevant to the calculation of our success fee for any transaction for which we may be due such a fee.

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How to Do a Re-trade: 5 Easy Steps

At Benchmark International, we work exclusively on the sell-side, so we would love to say, “The way to do a re-trade is to never do a re-trade.” However, when you have completed countless deals, there are times when we are tied so closely into those deals that we know the terms of the original offer do not stand up to the target company’s actual position following due diligence. In other words, we will admit when there is a legitimate reason to re-trade a deal term, including the price.

Our experience also tells us that these instances are rare when sellers have been through our process, and there is a right way and wrong way to do it if you want the deal to close. We encourage you to avoid blown deal costs by following these simple steps:

 

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Step 1: Discuss it with us first. Yes, we are going to push back. Yes, we are going to support our client. But we will also be able to keep the deal on track by doing the following:

  • In a best-case scenario, clarifying a misconception on your part that moots your need to re-trade
  • Giving you a read on how our client will react
  • Suggesting the best means of communicating the issue so that the reaction you receive best matches the severity of the actual change
  • Providing our client our open and honest view of the change and the reasons for it before he or she has had a day or two to lock themselves into a position that may be based on less than the clearest picture possible
  • Delving into our resources to convert what starts as a win-lose scenario to something closer to a win-not-lose-too-much scenario

Step 2: Have your data lined up. Very often we see re-trades supported by vague concepts and no numbers. These cause extra problems. If the amount of the re-trade can come over on the left side of the page with a numerical breakdown of the reasons for the re-trade on the right side of the page, and the seller can see that the two balance one another out—even if just figuratively—we are all in a much better position to get to the closing.

Step 3: Don’t wait. When you find something in diligence that looks like it is building to be the source of a re-trade, don’t save it all up and then dump it on the sell-side at the last minute. Conditioning the recipient of bad news is always the best way to get the most appropriate response to that news.

Step 4: Don’t overreach. Even in our smallest deals, we are not operating in a Turkish bazaar. There is no need to ask for $500,000 when you need $250,000. That type of negotiation works well in one-off trades but not when you are trying to build a relationship that is expected to hit additional bumps before the deal closes and likely needs some level of ongoing trust after closing.

Step 5: Be open to creative solutions. Regardless of how meaningful the problem is and how large a fix you need, your solution may not be the only acceptable one. It may not even be the best one for you.  There are many ways to change a deal to address an unforeseen risk and provide the protection you need to offset that risk. The key to getting the transaction closed is often finding the amount of offset you need using the method of offset the seller can accept.

Benchmark International works hard with its client to avoid the need for re-trades. We collect extensive data on our clients prior to going to market. We run a very process-driven data room and often pre-populate it. We encourage our clients to get in front of disclosing detracting factors to avoid any surprises. We comb through every financial statement and tax return our clients can produce. In some countries, we are able to verify returns against official tax transcripts. Unlike many other brokers, we will even put known issues into our Confidential Information Memorandums. We attempt to place our clients with experienced M&A legal advisors. We understand—and make every effort to ensure our clients understand— that hiding an issue is not going to get them a better deal, may cost them a very good deal, and will never make it through due diligence.

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6 Ways to Make Your Offers More Successful

At Benchmark International, we see hundreds of letters of intent (LOI), term sheets, and heads of terms every year. And though the title of the document changes from location to location, we see acquirers making the same mistakes across the globe. These mistakes cause delays, lead to good LOIs not being signed, and lead to LOIs being signed but then resulting in nothing more than blown deal costs (and angry sellers). We would like to offer a little advice from the sell-side about how to make your offers come across in the best possible light.

1. Do not include an automatic extension to the exclusivity period.

When there are no conditions on an extension other than your sole discretion, our clients see that for exactly what it is. Unless either (a) they have some veto right over any extension or (b) it kicks in only if certain material and tangible milestones have been hit, extensions cause our clients to get a bit suspicious of the other terms in the LOI. Its one of the easiest clauses for an M&A novice to understand so if they feel weary of that clause, you can imagine the effect it has on their reading of the more complex sections.

2. Do include a sources and uses of funds table.

Missing the table is problematic for a few reasons. Our clients often have a hard time following the complexity of a structured offer and the table can clear up some things for them. In addition, when the client is rolling over an interest and you are using the target company (or newco) to undertake the acquisition debt, a clear picture of the debt is necessary to ensure the rollover is correctly valued and, more importantly, for us to best explain to our clients the magic of leverage. Our clients tend to be less comfortable with debt than you are. When they learn later in the process that the company will be taking on large amounts of debt, it serves no one's interests for them to feel they have been left out in the dark or that they are suddenly facing a riskier proposition than they thought—even when they are not going to retain any interest in the business.

 

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3. Do not get too specific on the net working capital when the closing date is not yet known.

Our clients' business' have seasonality. Most of them don't have the same working capital in June that they have in October. With a two, three or even four-month window for the closing date, setting the target at the time of LOI is a recipe for disaster. Most acquirers have an adequate enough understanding of our client's business at the time of presenting an LOI to allow them to set the balance sheet line items to be included in the definition. But setting an amount causes extra pains both when trying to get the LOI signed and later if the closing date moves.

4. Put the total purchase price in the first paragraph.

Sellers look for the headline number. Why not put your best foot forward? Starting off with a nice sentence or short paragraph outlining the total benefit to be received by the sellers is a great way to get the momentum rolling for the offer. It is surprising how many acquirers do not put their best foot forward in this way.

5. Avoid being too specific on indemnification and other legal terms.

Sellers like our clients do not want to engage legal counsel at the time your LOI arrives. When an LOI comes in with the baskets, caps, timing limitations of indemnification and the list of the fundamental reps, our clients either (a) feel inclined to engage legal counsel—which slows everything—or (b) later hear from their counsel that they should not have agreed to such terms in the LOI, prior to engaging counsel. These extra details create a lose-lose proposition.

6. Send the offer to the broker first, not the client.

The error rate on sellers reading LOIs in the dark is astronomically high. Let us give your offer a read and come back to you with anything we think our client will misunderstand. As this is such an emotional and important process for sellers like ours, it can be difficult to get them unstuck from a misreading of your offer. It's best to do whatever is possible to get them started in the right frame of mind and we can (and are motivated to) help you ensure that happens. After we have had a chance to give it a once-over with our professional eye and provide some feedback, feel free to send it directly to the seller if that is important to you.

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What Does Benchmark International Tell Clients in Terms of Timing Expectations?

Our seller clients know that we see quite a few offers come through every week, month, and year and they expect us to provide our input on the timeframes that are “market.” As this is a buyer-seller neutral point and a strong set of mutual expectations is productive to achieving a closing, we want to give you an idea as to what is happening on our side of the table.

Nobody is getting deals closed in less than 90 days.

Even well-funded, experienced buyers seem to require 90 to 120 days get from letter of intent (LOI) execution to close in the middle and lower-middle markets. 

A request for more than 120 days is exorbitant.

A third of a year is a long time to be off the market for an owner who is committed to selling their business.When the time comes, there may well be good reason to extend exclusivity but we know that our clients more often than not regret any grant of 120 days or thereabouts. We can work with them to set up specific grounds for extending exclusivity beyond 90 days where a situation warrants it, but blanket grants of 120 days, or even 90 days with a 30-day automatic extension, are something we highly discourage our clients from accepting.

Diligence should start quickly.

We encourage acquirers to use the offer letter to inform the seller about diligence timings, especially when the initial diligence list will be sent and, if possible, when the initial diligence visit will start. All too often, we see LOIs signed followed by a long pause in activity and that drastically alters our clients’ attitudes toward the buyer and the offer. We encourage or clients to have this expectation set at the time of signing and expect that there will not be a pause but rather an aggressive start, even if that start only covers a portion of the scope of the overall diligence effort. When this happens, we see diligence lists arriving within a week of signing and the first onsite (or the next face-to-face meeting) within three weeks of signing.  

 

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First drafts do not wait until the diligence is complete.

We understand that acquirers may not want to incur the cost of engaging counsel based solely on the information in the Confidential Information Memorandum and a meeting or two. But we also understand that waiting two months to engage counsel and get first drafts out does not lead to a high close rate. We all know that drafts can be sent “pending finalization of due diligence.” Our successful deal closings have the first drafts coming out within a month of LOI signing. Our clients know that if they have not seen a draft by then, the deal is not likely to close.  

The seller can really mess up the timeline.

Failure to provide prompt and complete responses to diligence requests, abnormal reservation of disclosure of “sensitive” issues until later in the process, going on vacation, or simply the lack of organized files are all things we have discussed with our clients prior to going to market (and again when the LOIs start to arrive). They know that they can be the problem when it comes to timing. 

But if the seller does not mess up the timing…

Our clients know that time kills all deals. And they know that if they have been prompt and thorough, and the LOI signing date is approaching triple-digit days in the rearview mirror, things are not going well. Our statistics show that few deals die in the first 100 days after signing and few deals close more than 100 days after signing. This is something we share with our clients—both to set their expectations and to motivate them to be prompt and complete. 

Questions should be responded to within three business days.

We instruct our clients that deals require momentum to close. Precisely when they are most exhausted by the process is when they must reply in an even more expedient manner. Being realistic, we feel that the seller owes the buyer responses to every question within three business days, even if the response is, “We are working on it. It’s been a bit difficult to get our hands on that data.” Similarly, we believe the acquirer should respond to the seller’s questions, and send their follow up questions, within three business days. Allowing sellers to feel that anything that has not yielded a follow up within those three days has a “soft close” around it and goes an immeasurable distance in keeping sellers motivated, focused, and responsive.  

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The Ultimate Checklist For Buying A Business

Acquiring an existing business can offer great advantages over starting a new business from scratch, especially if the target business is thriving and holds more opportunities for growth. When considering the purchase of a company, you should take certain steps so that you can be confident that you are minimizing your risk and making a smart move. Use this comprehensive checklist to help you ask the right questions and guide you through the process. 

 

☐ Is the Target Company Financially Healthy? 

This is a question you must ask yourself before considering anything else about the business. You will want to carefully comb through the business's financial statements for the past five years (at least) to identify if anything appears out of the ordinary and to assess how the numbers compare with standard performance in that sector. Also, request to see the tax returns for the same years. This will help you determine whether the owner has put personal expenses through the company books and give you a more complete picture of the company's actual value. You also will want to know if you will be taking on any existing debt, and exactly how much.

 

☐ Will You Be Able to Generate Cash Flow?

It is crucial that you know whether you will be able to generate cash flow immediately upon purchasing the business. If not, are you in a position to carry the business until that time comes? No matter how attractive the company may seem, you must ensure that you are not getting in over your head. Take a thorough look at sales records to assess past and future performance. You must also find out if any existing clients or customers are planning to part ways and what you can do to retain their business. 

 

☐ Does the Company Have a Good Reputation? 

Doing a quick Google search can reveal quite a bit about a business. You will want to see how the company is perceived in the world. Does it have a lot of negative reviews or bad press? Are there any customer complaints, and do you know how they were handled? Get a comprehensive look at the business's reputation because you are going to need to see if you have work to do in order to turn it around. This could include a complete rebranding and marketing effort, which costs money. 

 

☐ Have You Done Your Homework on the Staff?

When you acquire an existing business, you are also acquiring its management team and employees. You should know the skill levels and proficiencies of any staff you will be inheriting, and whether you are going to be faced with the task of replacing key staff members. Do all team members plan to stay with the company? Have they been made any promises by previous ownership that you will now be expected to fulfill? Is anyone retiring or planning to go on extended leave? Is anyone disgruntled about the sale? When you know the answers to these questions, you'll be best prepared to address any issues. 

 

Ready to explore your exit and growth options?

 

☐ What is the State of the Inventory?

If inventory is applicable to the business in question, everything should be itemized and given a carefully determined value. Will any inventory lose value with time, or only have a value at certain times of the year? Will it be adequately stocked for when you take over the company? When you are investing in a company, you're going to want to have everything you need on hand to generate revenue from its operation. 

 

☐ What is the State of the Physical Property?

First things first: you need to know if the business owns the property on which it resides or if there is a lease agreement in place. Then seek out answers to the following questions. What are the details of the lease and the reputation of the landlord? How much is the rent, and is it due to increase? Is the property in good condition, or is it in need of repair? If the business owns the property, what are the real estate taxes? Is the property able to accommodate any planned growth? Is it legally zoned? Is the location appropriate? Are you going to need to make changes, or find a new location altogether? This is an area where you cannot be too thorough. 

 

☐ Do You Have All the Legal Documents and Contracts?

This is another critical step in purchasing a business. You are going to need to have every last piece of paperwork that pertains to that business. This includes business licenses, copyright agreementspatentstrademarks, import and export permits, mining rights, real estate documents, etc. Basically, if something relates to the business in any way, you should have documentation of it. If the current owner has not kept good records, there is your first sign that you might want to think twice about moving forward with the acquisition. 

 

☐ What is the Condition of the Business's Equipment?

You should assess the condition of all office equipment, furniture, machinery, and vehicles used for the business. What is owned and what is leased? What are the items' lease or purchase details, and are there maintenance agreements in place? You should assess the condition of all equipment to determine if anything will need to be replaced because this will be a factor in the purchase price of the business.

 

☐ Are You Familiar With the Business's Suppliers?

This is important because suppliers can have a significant impact on how reliable your business is able to run. You want to ensure that they are established and committed to providing superior quality and service. Find out if they fill orders on time and meet their obligations. Look into any contracts that are in place, so you understand the relationship. You also will want to ask if there are any expected price increases or factors that may impact the existing arrangement.

 

☐ Contact Benchmark International 

If you are looking to buy a business, we represent highly motivated sellers in the lower-middle and middle market that may be the perfect fit for you. Contact one of our experts to discuss how we can help with target company searches. 

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Benchmark International's Three Key Philosophies for Getting Deals Done

As we work exclusively in the mid and lower-mid markets, we see many deals succeed, and some wither. In an effort to have more of the former and less of the latter, we would like to share our core philosophies with the belief that helping you understand them will make working with us a more rewarding experience.


1. Time kills all deals.

Prudent and deliberate action are certainly also key aspects of getting deals closed but, in our experience, neither buyers nor sellers are inclined to be under-prudent or lacking deliberateness. Rather, unexplained and avoidable delays tend to stack up between the first meeting and the closing. Each delay shaves off a small percentage from the probability of closing. There are enough legitimate delays in the M&A process. When we see one that can be avoided, we will step in and attempt to get the ball rolling once again.

 

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2. Transparency is the best antiseptic.

We’ve seen too many deals die because one side or the other has hidden something until it is too late. Long before you meet our clients, we will have already guided them on the value of releasing the troubling issues they might have at the earliest opportunity. Hopefully, you will already have seen some of this in our Confidential Information Memorandums. We lean forward into these issues because we believe that the sooner they are addressed, the more solutions there are, and the less likely anyone is to feel hoodwinked. We hope you’ll feel the same way with your own challenges (for example, lining up debt financing) as well as any you may see with our clients.


3. The emotional must be covered as well as the financial.

This may be somewhat unique to our clients as our process appeals to a certain owner type. As you probably know, we specialize in closely-held and owner-operated businesses. Nowhere is it more true that “every business is a family business.” Our clients have typically had 20- to 30-year relationships with their businesses and often equate the sale process to sending their son or daughter off to college. When we work with acquirers that understand the effects of this fact pattern, we see a much higher level of success. In fact, we have built our teams, our process, and our engagements around it. We will be more than happy to help you deal with this interesting aspect of our clients. Please just ask.

 

Author
Clinton Johnston
Managing Partner
Benchmark International

T: +1 813 898 2350
E: Johnston@benchmarkcorporate.com

 

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5 Books to Read Before Buying a Business

The Complete Guide to Buying a Business
By Fred Steingold J.D.

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Should I Start a Business or Buy One?

Maybe you are a lot like Sam. Sam has been working at a job that he doesn’t love, going to work each day and feeling unfulfilled.  Sam would really like to quit and go into business for himself but he has a wife and a child to support.  This leaves him with a big decision to make; should he start a business or buy an existing one?  As Sam does his research, he discovers the many factors that will influence his decision.

Sam, like many of us, has a family to support so most important to him is to have sufficient income to continue supporting his family.  Taking on the risk of possibly not generating any income for several years with a startup is not a realistic option for Sam.  Since starting up is not an option for Sam, buying an existing business will allow him to have the necessary cash flow from day one as he will be taking a salary directly from his business.  In addition, depending on the way he chooses to acquire his new business he will be able to keep investing back into the business so it can continue to grow.  While Sam understands that there will be many headaches and long days because of his new business owners he will be free to be his own boss.  Furthermore, this new business will likely relieve a lot of the financial stress that he currently has as his family’s expenses continues to grow. 

Like most people going into business for themselves, Sam will need to secure financing and/or attract investors to help him get started.  He quickly learns that banks and investors strongly prefer dealing or lending to a business that has a proven track record and strong historic financial performance rather than a higher risk start up business with so many uncertain factors such as high debt, or customer concentrations.  With the right guidance from a reputable M&A firm such as Benchmark International, Sam will be able to find financing to be on his way to fulfilling his dream of business ownership.

Like many young entrepreneurs, Sam is excited and motivated by the idea of growing a business.  He understands that there is a marketplace for businesses he is currently looking for and is much less interested in the grueling legwork and struggle of getting one up and running.  He knows that buying a business will give him an established brand that has been tried and tested along with any patents, copyrights and valuable legal rights that may come with that.  Having acquired a business, rather than starting one, will have be doing the work he is most passionate about from day one.

Sam’s wife Helen is a very active member in their community and their home is usually filled with family and friends. Like many of us, friends and family are very important to Sam and he wants to make sure he will still have time for those things and does not miss out.  Sam is especially enthusiastic about four children’s school activities.  He realizes that by buying an existing business, he will have an established vendor, customer base, goodwill, equipment and suppliers.  Things he would otherwise need to spend countless hours acquiring.  Sam will also have an experienced and trained staff in place ready to go that will know and understand the business so he can take a couple of hours and see his children flourish.  The seller has spent time teaching and training those people and Sam will reap the benefits of that.  From day one, he will have people in place who are able to help run the business and teach him things while he gets settled in.  Sam understands the target business and he knows that with a few tweaks and changes here and there it will be running the way he wants to in no time.  While at the same time being able to spend the evenings at home with his wife and kids. 

Business ownership may seem like a daunting thought but it really should not be that hard.  Sam’s experience shows us some of the things to think about when making such an important life decision.

So, what about you?  Are those advantages important to you as well?  Do you have a unique idea that may be easier to get off the ground by incorporating it into an existing business?  As we move into a time where more and more baby boomers are looking to retire and sell their businesses, the opportunities are endless for budding entrepreneurs.  Your time may be now!

And what happened to Sam you wonder?  Sam did make the decision to purchase an existing store rather than start his own and was very successful in growing it.  In fact, Sam Walton grew his Wal-Mart stores to be the largest retail chain in the United States.  What business will you grow? 

Author
Amy Alonso 
Associate
Benchmark International

T: +1 615 924 8522
E: alonso@benchmarkcorporate.com 

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I want to buy a business, where do I start?

Many individuals or companies feel that the best way to either enter an industry or expand within an industry is through buying a business. While this is often true, it is hard to know where to begin the process of buying a business.

Define your search criteria?

The first step to buying a business is comprise a list of features that you are seeking in a business. Similar to the car buying process. Do you want leather seats, a certain brand, navigation, power windows, etc? Narrowing your search criteria will help save you time, resources, and frustration.

Here’s a few questions you will want to be able to answer as you begin your search:

  • What size business are you seeking? This question relates to both revenue and profitability.
  • Do you want the owner to remain apart of the business post-closing? If so, for how long?
  • What geographical areas do you prefer?
  • What industry and sectors are of interest to you? Be as specific as possible. If you are looking to buy a marketing firm, what type of end customers do you prefer? Do you want the business to cater to government customers, healthcare companies, etc?
  • What is your budget?

Begin your search

There are many ways to uncover businesses for sale. You can search various websites, reach out to a Mergers and Acquisitions’ (M&A) specialist, or network to try and find deals that have not hit the market yet. Some buyers will approach business owners directly to see if they are interested in selling their business directly to the buyer.

Websites featuring businesses for sale often can be overwhelming. If you search several websites, you may see the same listing on multiple websites.

There are M&A specialists that work with buyers to find businesses for sale and others that work with sellers to find buyers. Some M&A specialists represent both buyers and sellers. If you are working with a specialist that represents both parties in a transaction, you will want to understand the intermediary’s incentives. It is hard to keep interests aligned if there are conflicts between the parties. If you are working with a sell-side M&A specialist, often times they will have exclusive listings meaning that you can only have access to that specific deal through that specialist. Also, a sell-side M&A specialist may take a commitment fee. This will show the seller’s commitment to the sale process.

Some potential buyers build a network to look for opportunities to purchase businesses or build their own database of potential businesses they would like to purchase and begin reaching out to those business owners. While this sounds like an easy process, do not be fooled by the amount of time and resources you will use trying to speak with the business owners and convincing them to complete a deal with you. Typically, business owners that are open to exploring the idea of selling will entertain a conversation but they eventually want to go to market to test the valuation. Often times buyers will get close to the end of a transaction but then the seller will decide not to sale. If you are willing to pay an amount that is acceptable to the seller then they often wonder if there is someone that is willing to pay more and if they have undervalued their business.

Begin to review businesses

Sellers will want a Non-Disclosure Agreement (NDA) in place prior to releasing confidential information. This practice is very typical in the lower mid-market. As a buyer, you will want to have the opportunity to speak directly with the business owner. They will know their business better than anyone, and you will have specific questions that only the business owner will be able to answer. You will also want to visit the business' facility. This visit will tell you a lot about the company, its culture, and what type of liabilities you may want to explore further during the due diligence process. Once you find the perfect business, you will want to move swiftly to the next stage of the purchasing process as there are probably other buyers looking at the same opportunity and you do not want to miss out.

I found the perfect business, now what?

After you find the perfect business, you will need to comprise a valuation for the business. The valuation will be covered in a Letter of Intent (LOI) as well as the structure (how is the valuation going to be paid to the seller) of the offer and other high-level details. In the LOI, you will want to include the seller’s involvement post close, an exclusivity clause allowing you the exclusive right to review the opportunity, the requirements of due diligence along with a timeline, if possible, and the anticipated closing date. A LOI tends to include many more details but above highlights some of the details a seller will want to understand prior to agreeing to move forward.

The LOI is executed. Where do we go from here?

After a LOI is executed, due diligence begins. As the buyer, you want to confirm that what you think you are buying is what you are actually buying. You will want to understand the risk associated with the purchase of the business. You will also want to engage your advisors to provide legal advice for the purchase agreement and tax advice for the structure of the transaction. 

While purchasing a business sounds like a quick and easy process, it can take months, if not a year or two, to make the purchase. There are a lot of factors that you will encounter and unforeseen obstacles that stand in your way. An M&A specialist can help you navigate these obstacles and help you purchase a business within your desired timeframe. Whether you choose to seek to purchase a business on your own or bring in a M&A specialist, we wish you the best of luck with your journey. 

Author:
Kendall Stafford
Managing Partner
Benchmark International

T:  +1 (512) 347 2000 
E: stafford@benchmarkcorporate.com

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Why Cyber Security is Essential in M&A

As M&A activity increases worldwide, unfortunately so does cyber-crime. Now whilst the two are in no way related, there is no hiding the fact that there has been a number of high profile incidents in recent times, with major companies such as eBay, Target and Yahoo! all being the victims of such crimes.

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