Benchmark International Logo Blog Mergers and Acquisitions

Archives

How Seller Due Diligence Maximizes Business Value

Selling a company is a momentous life event for any business owner. You have worked hard to build it and want to achieve the highest acquisition value possible when you are ready to sell. To do this, you should be fully prepared for any prospective buyer to conduct rigorous due diligence, which means you should be prepared to do your own.

What is due diligence? A comprehensive appraisal of your business to establish its assets and liabilities and evaluate its commercial potential. 

If you carry out thorough due diligence before putting your company on the market, it will be primed and ready for the buyer to conduct their due diligence process. By being sufficiently prepared, your business is going to appear more attractive to buyers.

Planning Ahead is Crucial

First things first: plan ahead and plan early. Give yourself enough time to optimize the company’s value before putting it on the market. A carefully planned sales strategy is sure to garner better value than what appears to be a hasty fire sale. It is best to wait to sell until you have done everything that you can to maximize your company valuation. When you take the time to position your business attractively for the marketplace, it reduces the odds of a negative outcome.

Start by identifying the key value drivers for your business and how they can be improved. This will help you find obstacles to a sale before a buyer does, and give you time to address any issues. These drivers include:
• Skilled, motivated workforce
• Talented management team
• Strong financials and profitability
• Access to capital
• Loyal and growing customer base
• Economy of scale
• Favorable market share
• Strong products/services and mix of offerings
• Solid vendor relationships and supplier options
• Sound marketing strategy
• Product differentiation and innovation
• Up-to-date technology and workflow systems
• Strong company culture
• Research and development
• Protected intellectual property
• Long-term vision

It is common for buyers to be especially concerned with company culture and existing customer relationships. Make sure your employees and your customers know what to expect and share your vision. If there is misalignment in these areas, it can unfavorably impact the post-sale performance of the company.

Ready to explore your exit and growth options?
Why Documentation Matters

Having all your documentation in order, ensuring its accuracy, and putting it all on the table is going to make you a more trusted seller and increase the value of the business. It will also help you avoid constant back-and-forth requests from a buyer, which can be a distraction for you while you’re trying to run a business.

Creating a secure and efficient virtual data room (VDR) for storage and review of documents offers major advantages. A VDR is a secure online document repository that enables efficient collaboration between parties in any location so they may share information at any time during the pre-deal phase. A VDR also makes it easier to compile and verify every document internally and avoid duplicating efforts. Plus, it offers exceptional security to safeguard against confidential information ending up in the wrong hands. Once you have your VDR completed and vetted internally, you can open the files up to outside partners. Overall, the VDR is your secret weapon in making sure all of your documentation is centralized and that you are presenting your company in the very best light.

You can learn more about the documentation you will need to compile here.

Timing is Everything

You want to sell at the right time based on the market, which is always changing. Being adequately prepared to sell means being ready to act when the time is right. And selling at the right time means getting more value for your business.

Something else you must consider is if you are truly ready to sell. This is not the time to be emotional. Once you’ve initiated the sales process, the last thing you want to do is change your mind when buyers are already involved in the conversation. This will give you a reputation of being disingenuous and not being a serious seller, scaring off potential buyers in the future and devaluing your company.

Professional Help is Key

If it sounds like preparing for the sale of your company is an exhaustive undertaking, that’s because it is. But you do not have to do it alone. If you enlist the expertise of a reputable mergers and acquisitions firm, they can lead the way and help you get the most value for your company. A good M&A Advisor will know better than anyone how to steer you through the due diligence process.

They will also know when the market is in the right place for a sale, and give you access to quality buyers that you can trust. It is also important to note that buyers are going to take you much more seriously when you have partnered with a highly regarded M&A firm.

At Benchmark International, we’re here for you. Our experts are ready to partner with you to exceed your expectations and make great things happen.

READ MORE >>

The 12 Best M&A Twitter Accounts To Follow

PitchBook Data| @PitchBook

PitchBook is a financial data, research, and technology provider that covers global venture capital, private equity, and M&A transactions. Here you will find comprehensive news and analysis, as well as deep-dive info on individual business sectors.

Mergers&Acquisitions| @TheMiddleMarket 

See what is happening in private equity and get a healthy dose of all things related to M&A, including in-depth analysis, articles, and commentary in the middle market from an array of sources.

Benchmark International | @benchmarkgroup

As one of the most powerful M&A firms in the world, this list would not be complete without including our very own Benchmark International Twitter account. Get the latest news and industry insights, and see how our Benchmark team stays dynamic on the world stage.

The M&A Advisor| @themaadvisor

The M&A Advisor is the premier network of M&A, turnaround, and finance professionals. Read great industry articles, and get access to information regarding conferences, awards, and meetings.

The Deal@TheDealNewsroom

The Deal has served investors, advisors, and dealmakers with high-level analysis of “the deal economy.” Their Twitter account is an excellent extension of a news source that started as a print newspaper in the 1990s and has grown into a sophisticated M&A information tool.

WSJ Private Equity| @WSJPE

The official Twitter account for the Wall Street Journal PRO's is where you will hear from their global team of editors and reporters covering all topics related to private equity worldwide.

 

Ready to explore your exit and growth options?

 

Flipidea| @Flipidea_AI

Flipidea uses machine learning to discover insights from failed businesses and predict failure from startups. While the account does not have many followers, the account’s timeline of tweets reveals an interesting compilation of information that can be of value to entrepreneurs, including an array of interesting retweets. 

Buyouts| @Buyouts

Buyouts Insider offers industry intelligence and is a handy source of news, data, and analysis of trends in the leveraged buyout and private equity industries.

Mergermarket| @Mergermarket

Mergermarket provides M&A intelligence, data, and research designed to give subscribers an edge. It is a robust Twitter account for anyone interested in M&A, and can sometimes be a source for finding out about unannounced deals.

M&A Critique| @mnacritique

The social media arm of this India-based magazine gives insight regarding deals related to M&A, restructuring, insolvency, takeovers, and joint ventures.

Smart Business | @Smart_Business

The Twitter account of Smart Business Magazine offers a U.S.-based perspective on business insights, advice, and strategies for growth. Here you will also find individual profiles on dealmakers and interesting viewpoints from American business leaders.

M&A Navigator| @manavigator

M&A Navigator is a great tool, especially if you prefer simplified access to your headlines. There are no flashy graphics or photos, just the headlines on what is happening in the world of M&A.

READ MORE >>

Buyer Comfort

Buyers tend to assuage their discomfort with deal structure.  When negotiating with buyers, it is prudent for the seller, guided by a seasoned M&A Advisor, to consider what the underlying issue is, discomfort, instead of addressing the result of that discomfort, a specific deal structure. Huh, you say? Let me dive a bit deeper.

Buyers of businesses use deal structural devices to cure many issues or concerns. Let's take a second to illustrate the most typical elements of a structured deal. While the following encompasses the most common deal structures, it is, by no means comprehensive.

Cash at the closing table is obvious and needs no further illustration. A seller note or seller financing is also fairly simple. The seller essentially serves as a lender to the buyer. The attorneys draft a promissory note, perhaps a stock pledge agreement and incorporate them and potentially other documents in the definitive agreements. The buyer pays off the principal of the note and interest over the course of a few years.  Seller notes don't tend to be contingent upon anything other than the solvency of the entity backing the note. They are deferred. Rollover equity, often known as Seller Rollover, Rollover or simply Roll, occurs when the seller maintains a position in either the existing business or Newco. In some circumstances, a seller may sell 80% of the shares in his or her company while in another, that seller may sell 100% of the shares in her business and simultaneously reinvest what amounts to 20% of the proceeds in Newco. This is generally a cashless exercise. It is critical for the seller to engage seasoned advisors to assist in structuring the rollover in the most tax-efficient manner. The final typical structural element of a deal is an Earnout. Where the seller note isn't contingent upon performance, an earnout is. Earnouts pay out a prescribed dollar amount over time as certain agreed upon and defined metrics are achieved. While these tend to be quantitative metrics like EBITDA and Revenue, they can also be tied to qualitative measures like maintaining key customers or employees or integrating technology. In addition, earnouts can be tied to maintenance or growth.   

Ready to explore your exit and growth options?
As I hinted at earlier, buyers use these structures to cure their apprehension. What is behind that discomfort or apprehension? Many things but at the heart of most of those is the oft-cited, yet misunderstood concept, risk. Risk, in a business context, is the chance for an unanticipated outcome. Risk can be specific to a business, to an industry, to geography or more global. Risk isn't inherently bad, thus the risk/reward model, but it needs to be accounted for in decision making. Buyers, in their initial diligence, aim to understand the underlying risks and determine their tolerance for said risks. When structuring an offer, they seek to allocate and incorporate those risks.   

Some buyers seek out businesses that are very easy for them to understand, have very predictable financial performance and robust operational teams.  Those types of businesses, if proper controls are also present, will garner simple offers with a high percentage of the deal in the form of cash. This is a low-risk deal. A business with more volatile performance introduces incremental risk. A buyer may still be interested in the business but may shift cash at close to an earnout. If the business is growing rapidly, but that growth hasn't been consolidated in the buyer's eyes, that earnout may be linked to the growth of earnings or revenue. Perhaps the buyer will apply a three-year average to EBITDA to incorporate the volatility into the valuation.  If the seller wants to be paid on the recent growth, a buyer may use an earnout to bridge the valuation gap. A buyer willing to pay 5x EBITDA in an all-cash deal may pay 8x or more if allowed to incorporate structure, thereby mitigating their risk.

If the seller is adamant that he or she won't accept an earnout, it behooves an M&A advisor to dig deeper into where the actual buyer's discomfort lies.  Rather than fighting the earnout, might it be a better strategy to uncover the underlying issue and solving that? The earnout is the solution, not the problem. Why might a buyer incorporate an earnout? There are several possible reasons; 1. Earns reduce the cash required to close the deal.  2. They create alignment between buyer and seller post-close, thereby ensuring the seller continues to act like an owner even when he longer is an owner. 3. They confirm their diligence. Can these concerns be addressed in other ways? Of course, they can. If the earnout is moved to a seller note, no additional cash at close is required of the buyer to fund the deal. Both two and three can be addressed through a seller roll. If the buyer wants to ensure the seller acts like an owner, make him an owner. Rollover allocates some of the risks to the seller in both an earnout and rollover equity. Perhaps an employment contract signed by key employees would provide the buyer some comfort? Many deals incorporate an options pool, Management Incentive Program (MIP) or Profits Interest as additional ways to create alignment post-close. 

The central idea is this. Rather than focusing all of your attention on the proposed structure of a deal, attempt to think through the concerns the buyer is trying to sooth with that deal structure. Solving for the actual underlying problem rather than the buyer's proposed solution may lead to better outcomes for both parties.

READ MORE >>

14 M&A Cartoons That Will Brighten Your Day

All images may be subject to copyright.

READ MORE >>

How Do I Know If I’m Ready To Retire?

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.

Ready to explore your exit and growth options?
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.

READ MORE >>

External Market Impact On M&A

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

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.

Regulatory Environment

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.

Ready to explore your exit and growth options?

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 >>

10 Things Most People Don’t Know About The M&A Process

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.

Ready to explore your exit and growth options?

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.

READ MORE >>

9 Surprising Stats About Buying or Selling a Business

Are you considering buying or selling a privately held business? Below are a few stats that you might find surprising:

READ MORE >>

The Importance Of Succession Planning

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 >>

10 Undeniable Reasons To Sell Your Company In 2019

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 >>

Global Food & Beverage Industry Outlook

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 >>

What Is A Strategic Partner?

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.
  • VerticalPartnership: 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

Ready to explore your exit and growth options?

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 >>

Real Estate Industry Outlook

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.

Ready to explore your exit and growth options?

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.

Workforce Housing

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. 

Global Hotspots

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.

Contact us

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 >>

M&A Outlook for Tennessee Business Owners

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.

 Ready to explore your exit and growth options?

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. 

READ MORE >>

2019 Outlook for the Construction Industry

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.

M&A Momentum

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.

Tech Startups

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.

Smart Cities

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.

Offsite Construction

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.

Connected Construction

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.

 

READ MORE >>

Questions You Should Ask a Potential Buyer

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.  

 Ready to explore your exit and growth options?

“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 >>

2019 Outlook For The Healthcare Industry

Value-based Care

Quality, affordable healthcare remains an important issue for people all over the world, from Europe and the United States to Asia and Africa. As global healthcare spending continues to skyrocket, people are demanding more bipartisan policies from their political leaders to address the problem. This is why value-based care solutions are starting to play a major role. The industry is undergoing a shift in focus from treating illness to achieving and maintaining wellness. These solutions are more productive and less wasteful, as they aim to avoid unnecessary testing and interventions. Up until now, this role has been typically driven by health plans, but physicians and health systems are getting more involved in the full spectrum of care. All of these elements of value-based care represent huge growth opportunities in the digital healthcare coming-of-age, with various forms of technology as the major impetus.  

Technology, Artificial Intelligence, and Data

Technologies that automate nonclinical duties such as paperwork are being developed to save physicians time and allow them to focus on patients. The implementation of electronic health records (EHRs) and artificial intelligence tools is expected to better connect patients, physicians, health systems, and health plans. Physicians will be able to utilize EHR data to manage illnesses with fewer scheduled in-person appointments.

Virtual care is also an emerging market factor in the changing healthcare landscape. Many people put off doctor visits until their condition worsens, which increases costs such as emergency room expenses. New virtual care technologies are enabling patients to see a physician from the comfort of home. It also means that physicians are able to see more patients. TeleHealth Services is an ideal example of this trend. It uses digital information, computers and mobile devices to access and manage health care services remotely. In the last few years, nearly three quarters of major employer health plans had incorporated TeleHealth software services into their benefit packages.

Tech-enabled medical devices and services are another growing trend. This includes wearable devices, digital therapeutics, and applications that collect and communicate data. Last year, FitBit acquired Twine Health, a health-coaching platform that helps people improve health outcomes while helping health systems, plans, and providers reduce healthcare costs. Last summer, Amazon acquired the online pharmacy PillPack for almost $1 billion, and drug giant GlaxoSmithKline entered into a four-year agreement with the online platform 23andme, the world’s leading DNA-testing-kit resource for consumers. Also in 2018, Roche acquired Flatiron, which uses oncology EHRs to connect oncologists, academics, hospitals, researchers and regulators on a shared technology platform. 

Cloud technology also brings new benefits to the table, such as easy integration of immense datasets, and AI capabilities that analyze data and provide insights remotely. Cloud technology is expected to continue to gain momentum, as data—both big and small—are finally being used in ways that may make a meaningful difference for the healthcare industry.

Healthcare Mergers & Acquisitions (M&A) in 2019

The industry saw ample M&A activity last year, and this activity has already carried over into 2019, with several major deals already closing in January. There are also some big moves in the works that everyone is watching. A proposed merger between retail pharmacy CVS and insurance giant Aetna has drawn much speculation and scrutiny as it still awaits regulatory approval as of this month. Walmart has been in talks to merge with insurance provider Humana, another sign of major retailers attempting to take a stake in the healthcare industry. 

With the growing digital health market and continued pharmaceutical innovations, M&A strategies remain a preferred growth plan for executives and it is expected that there will be lively M&A activity throughout 2019. Southeast Asia has drawn abundant attention, with a 92 percent increase in healthcare IPO volume last year. Plus, the stock exchange in Hong Kong introduced new rules allowing biotech companies to issue shares even before recording revenue or profits. Singapore, Indonesia and Malaysia all have ripe environments for new opportunities. And even despite trade tensions, rising interest rates, and volatile markets, deal-making activity in the region remains forecasted to grow. 

What it Means for You

Whether you are seeking a new investment, looking to grow your company, or considering selling your business, a great deal of financial opportunity lies in the global healthcare industry. 2019 may very well be the right year for you to make a move. If you contact our specialists at Benchmark International, we will use our global connections and mergers and acquisitions expertise to help you carefully craft the ideal opportunity for you and your next venture. 

 Ready to explore your exit and growth options?

READ MORE >>

Global M&A Activity 2019 – Deal Makers Optimistic for the Year Ahead

Refinitiv has announced the findings of its annual Deal Makers Sentiment Survey conducted by Greenwich Associates – a survey which provides a quantitative assessment of M&A related and capital market activity in the year ahead.

The survey has revealed that, despite market turbulence, reassurance has been offered in terms of M&A and capital market trends as the deal making professionals surveyed are cautiously optimistic for the year ahead.

READ MORE >>

How To Reduce Owner Dependence Before A Sale

Build your dream team.

An important step in reducing your company’s dependence on you is to create your management dream team. Assembling the right people to take over the reigns can shift the burden off of you far before the time comes to sell. Make sure your team members know that they have your confidence by giving them more responsibility. This also means that there can be less reliance on you moving forward. Another significant benefit of having a stable and experienced management team in place is that it makes your company more appealing to buyers and ensures a smoother transition period.

Ready to explore your exit and growth options? 

Create documentation.

Before selling a business, it is imperative that your processes and procedures are fully documented. When you outline howthings work and whythey work, it can be key to your organization’s appearance of professionalism. Not having a proper roadmap to your operations could be a deal-breaker for prospective buyers, as they will want to follow guidelines that they see are proven effective or adapt those guidelines accordingly.

Having proper documentation in place also means that your management team can make informed decisions in your absence should you just want to vacation for a couple of weeks. It will also be needed to keep everything running smoothly when it is time to transition the company in the event of a sale.

Creating this documentation may seem like a tedious task that you may feel too busy to do, but remember that it is critical to reducing your company’s dependence on you and will ultimately pay off in the long run.         

 

Plan your exit strategy.

As a business owner, it is critical that you have a plan for your exit from the company. A sound exit strategy will allow your business to transition smoothly into the right hands. This forward planning will ensure that your business stays on track and is achieving your goals. After all, if you have not set any goals, how can you expect to achieve them? These goals will be crucial in increasing the value of your company prior to a sale. Your management team should clearly understand these objectives so they can work with you on the path to shared success, and eventually, without you.

Establishing an exit strategy can be complicated and somewhat intimidating, which is why most savvy business owners partner with an experienced broker such as Benchmark International. Our specialists will work closely with you to establish an exit plan that is tailored to your specific needs and helps take the guesswork out of the process. We can even help you find the right buyer because we have powerful connections around the world.

Exit planning can reduce your company’s dependence on you and arm you with confidence for when it is time to sell. Instead of worrying about where to start, just start by
giving us a call.
Do you have an exit or growth strategy in place?

READ MORE >>

What Funding is Available to Grow my Business?

When you are ready to take the steps to grow your business, you need to determine the funding you can receive to help make it happen. Many different funding options are available, but how do you know which is right for you?

The first method that comes to mind for many people is borrowed funds. There are multiple options for gaining funding through lenders, including Small Business Administration (SBA) loans, traditional bank loans, micro-loans, and online business loans. SBA loans and traditional bank loans typically take months to secure and the repayment terms can run up to twenty-five years with interest rates varying. Micro-loans and online business loans can take less time to secure but they carry higher interest rates than bank loans and may have pre-payment penalties. Additionally, even if you get a loan, business growth is not guaranteed. If the borrowed funds are not used wisely, you can end up paying back money with interest that never helped you make any additional money in the first place, just digging you further into debt.  

Do you have an exit or growth strategy in place?

Another method of funding is retained earnings. This approach uses a combination of operating cash flow and profits left in the business to fund your growth plan. Using retained earnings avoids adding debt and interest payments. You also stay in full control of your company by not involving outsiders in your business. However, use of retained earnings can be a very slow process if you must wait and build up the funds you need. You also run a major risk of not having the finances necessary to keep your company operating from a healthy perspective. 

Private equity is a way to acquire funding by selling shares in your company to outside investors. Through this long-term growth strategy, you avoid getting involved with a bank and you minimize your risk. With venture capitalists or angel investors, you also gain the benefit of added expertise and personal interest in the success of the business. One aspect of using equity capital is that shareholders will be expecting a return on their investment. This could result in the consideration of a merger with another company or having the company acquired by a larger company. 

Many companies choose to use mergers and acquisitions strategies because the growth is more imminent. Instead of waiting years for the business to grow itself, merging with another company can double the company’s size, reduce competition, and increase profitability. Merging with another business also gives you the advantage of acquiring intellectual property and expanding innovation. 

Working with an experienced growth partner such as Benchmark International will help you figure out the best direction for you, whether it is a merger, an elevator deal in which you retain a stake in the business, a cash-on-completion arrangement, or a complete exit strategy. There is a range of options available depending on how you want to see your company transformed. The best strategy will also depend on the state of your company and the current market. It is important that there is careful consideration of the cultural fit between the two companies and a firm understanding of how to manage expectations. Having the right connections around the world in various sectors is also a key attribute you want in your representation because it opens up a wealth of opportunities. 

The right partner can maximize value and make your vision a reality for the business that you have worked so hard to build. Benchmark International can be relied upon as a leader in the global landscape to get you the results you deserve. Ready to explore your exit and growth options? 

READ MORE >>

The Best-Kept Secrets for Business Growth

Expand your reach.

By finding ways to increase your exposure to the world, you can give your business the momentum it needs to grow. Examine your marketing plan. Broaden your social media footprint. Immerse yourself in the trade by publishing articles and having a strong presence at trade shows. Think of creative ways to interact with customers and target markets to generate buzz and get people talking. The extent of the opportunities available to you will vary depending on your company’s industry, but you will want to be sure you are doing everything you can to reach as many people that you can.   

Embrace change.

Doing business a certain way may have gotten your business where it is today, but you should not be afraid to make some changes. Is there a new process or department you can implement? Is there a sales opportunity you are missing? Are there adjustments you can make to save time or money? Always be open to hearing new opinions, ideas, and ways of doing things. Markets can change quickly and you will want to adapt seamlessly. By closing the door on change, you could be closing the door on growth. 
 

Value relationships.

It is just as critical to maintain existing relationships as it is to cultivate new ones. You will want to network in new circles and expand your horizons. At the same time, you will want to show your long-term customers that they are important to you. After all, they have been with you through it all and are partially responsible for your success. Stay engaged with them and focus on their needs. Your track record of lasting relationships is a reflection of your company and its values, making doing business with you more appealing to new customers. Those relationships can also be a source of referral of new business opportunities.
 

Get a boost through mergers and acquisitions.

Consider using mergers and acquisitions strategies as a smart option and faster route to generate growth. While greatly beneficial, pursuing a merger or acquisition can also be quite complex. This is especially the case if you are planning to expand into a global market, which presents its own host of challenges. Ready to explore your exit and growth options?

You will need to determine if you need a cost synergy or a revenue synergy solution. For example, buying direct competitors to increase your company’s size and decrease competition is a revenue synergy. So is adding value by purchasing companies that are market adjacent to your own. This method can help you add new talent or gain ownership of intellectual property. In contrast, a cost synergy solution reduces costs through consolidation of overlapping entities. Getting this right can result in a valuable deal for all parties involved.

Major deals include a large amount of small details, such as timing, tax planning, and logistics. Additionally, if you plan on leaving the business as part of the transition, you need assistance crafting your exit strategy. Consult a resource that has vast knowledge and experience in all of these areas. By partnering with a reputable mergers and acquisitions firm, it will be easier for you to navigate these complicated waters and ensure that you find the best strategy for your company’s growth.

Schedule a Call

READ MORE >>

How Can I Expand My Business Internationally?

Expanding into new markets around the world is an exciting opportunity for business growth. But where do you start? There are several factors you will need to consider when undertaking a venture of this magnitude.

First and foremost, you will need to determine if expanding into a new country will be profitable. Identify your target market and assess the need for your commodity in that market. Perform a product gap analysis or SWOT analysis to determine demand and how your product or service stacks up to local products. You basically need to determine whether anyone will buy it, so it can be a wise move to test your product in that market before going any further.

Create a localized business plan to evaluate your preparedness for the venture, and set reasonable goals for the process. Expanding into new markets is akin to starting something new and it’s going to bring a new set of challenges. Consider if you need to create a new executive team to help manage the transition or if your existing team can hit the
ground running.

One of the most important steps you can take in expanding to a new market is to make sure you take the time to understand the country’s culture. Etiquette, language, and business culture can vary greatly and impact the success of your endeavor.For example, make sure your product or business name translates appropriately into the native language.

You will also need to think about the country’s logistics and how you plan to distribute your product or service. Consider legal regulations, tax laws, insurance needs, banking transactions, transport costs, data protection, and labeling requirements. You should also protect your intellectual property by looking into trademarks, patents, and design rights. Hiring an international business consultant can help you avoid any pitfalls and ensure that all your bases are covered.

Taking a product into new markets also means understanding the ins and outs of exporting. The good news is that it’s often in the best interest of most governments to boost exporting, so seek out ways that they can help you with market research, trade support, and exportation training programs. This information is typically available on government websites. You can also contact trade commissions, chambers of commerce, and other organizations
for assistance.

If you plan to acquire an existing business, you will need the proper guidance from an experienced business acquisitions firm to help find the best opportunities and broker a successful deal. There is plenty of due diligence required to adhere to local laws and make sure the terms of the acquisition suit all parties involved. At the same time, the right acquisition can be quite advantageous and reduce some of the risk that comes with an international venture. The business to be acquired has existing infrastructure in place and understanding of the local market’s regulations and relationships, offering some stability to a complex process. A sound strategy can make all the difference when buying a company.

There is a great deal to manage when expanding a business internationally, but you don’t have to do it all alone. World-class business experts with strong global connections, such as Benchmark International, can help you analyze the market, navigate the process, and tackle the world.

READ MORE >>

Retirement Tips for Business Owners

Planning for retirement can be a daunting task, but if you follow some basic principles and seek the proper help, the process can be reassuring and even empowering. 

Start with the numbers.

The first step you will want to take in planning your retirement is to figure out how big of a nest egg you will need in order to live comfortably. Once you set your goal, you can assess your current position and determine how much time you will need in order to meet that goal, and any additional steps you’ll need to take to make it happen. Consider the amount of income you expect to earn over your remaining working years and how much you want to contribute to retirement plans. A quick Google search for online retirement calculators can give you an easy starting point. 

Determine your company’s valuation.

Before you can thing about selling, you need to know what your business is worth. Your company’s cash flow, market value comparable to other companies, and precedent transactions are all factors in business valuation. You’ve worked hard to build your business and you shouldn’t have to make compromises when you want to retire. Consulting a company broker such as Benchmark International will help you get an accurate picture of your company’s worth and take the next steps in selling your business in the smartest way possible and with the smoothest transition. After all, you want your freedom to retire, but you also want your employees to be taken care of and your core business values to remain in tact.

Schedule a call to speak to an Analyst

Invest early.

It’s crucial to start investing in your retirement as early as possible. Whether it’s a 401k or an individual retirement account (IRA) or both, investing sooner means earning more interest. 401k plans have higher maximum contribution levels and a preselected list of limited investment choices. IRAs allow you to invest in a wide variety of mutual funds, exchange-traded funds (ETFs), and individual stocks and bonds. 

Another option to consider is a Simplified Employee Pension (SEP) plan. It gives the business owner a vehicle to contribute to their employees’ retirement savings as well as their own, with easy setup and flexible options for funding. Annual earnings are not taxed and it grows tax-deferred, and there are no maximum contributions. 

Most importantly, all of these options allow your money to grow tax-free. If you have already begun to invest, take a step back to look at your investment plan and see if you need to make it more aggressive to achieve your goal within the expected timeframe. Consulting a financial expert can help you choose what type of retirement plan is right for you and create a blueprint to make the most of it. 

Strike a balance.

Saving and investing are not one and the same—and you’ll need to do both. Place money into a savings account that has slow but guaranteed growth. As a counterbalance, invest money in an investment account that carries some risk. While there’s always a risk you can lose your principal, the return may be quite high if invested wisely.

Diversification of your financial portfolio is also an important component of your retirement plan. Factor in goals, risks, and think about how to reduce vulnerabilities. The younger you are, the more aggressively you can invest. Consulting a financial planner can help you easily determine what is right for you.

Get exit planning advice.

You’ve put everything into building your business. When the exciting time comes to move on from that business, you’ll want to start planning your exit strategy sooner rather than later. Think about how you would like to see the business make a successful transition. Think about increasing the value of your business and selling at the right time. The smartest way to do this is to partner with a trusted M&A firm such as Benchmark International to help you make your dreams a reality. They will help with your company valuation and offer a winning strategy tailored to your specific needs, and even help you find the perfect buyer. Even if you only wish to partially retire, creating an exit plan opens up your options and gives you peace of mind for when the time comes for a transition.  

Take the next step.

If you are ready to plan for your retirement and create a successful company exit strategy, call Benchmark International today.

Schedule a call to speak to an Analyst

READ MORE >>

2019 is the Year to Put Your Exit Strategy in Motion; Here’s why:

M&A Activity has remained steady over the last year, but can the same be expected of the years to come? A closer review of the annual activity for 2018 indicates that the peak of the M&A cycle is slowly coming to a plateau. It’s time for business owners to reflect and decide whether riding out the next few years is truly worth it.  

Here’s what we know about M&A activity and what we can predict based on current trends. Year over year, the total number of completed deals has been on a slow and steady decline from 2015 to 2018. In 2015, there was a total of 16,566 deals completed. Whereas, in 2018, there have been 10,734 deals completed so far. Although there has been an impressive total deal value of more than $800 billion completed in deals so far in the US for the 2018 cycle, that value is a decrease from previous years.  

What business owners have to look forward to in the coming years is a bit of uncertainty, especially following the anticipated 2020 presidential elections. 2019 is expected to be another great year for M&A transactions, but it may very well be one of the last for this incredibly hot activity we have experienced recently 

Following the 2016 elections, there was a short pause in activity followed by a quick uptick and a wave of transactions. The 2018 midterm elections were an indication of the coming “blue tsunami” predicted in 2020, with the Democratic Party taking hold of the House of Representatives. A change in political leadership can unsettle the ship that so many have been sailing upon for the last four years. President Trump’s 2016 campaign was centered on economic surety, and that surety brought a wealth of support for M&A transactions to follow. Should a new leader be at the helm of the nation following elections, volatility in the market is certain 

In addition to an anticipated election, there is no denying that the successful economic swing that has taken place thus far has also had an effect on the current market standing. A fourth interest rate increase is anticipated before the end of 2018, and three additional hikes are estimated to take place in 2019. Buyers will be wearier of transaction decisions as interest rates increase. They will not want to pay high valuations as those seen in previous years because the purchase risk will increase as a result.  

Now is the time for business owners to act before the market shifts from a sellers’ market to a buyers’ market. Steadily increasing interest rates will give more power to buyers in transaction negotiations. Business owners should keep this in mind before they decide to wait a few more years to put their exit plans in place.  

Moreover, the market is predicted to become somewhat saturated over the next decade as more adults are coming to retirement age. Baby Boomers make up approximately 60% of privately-held businesses in the in the US, and this means the number of businesses on the market are going to increase a great deal.  

As a result, valuations for businesses will likely decrease. Buyers will have many options at their disposal for their ventures, so they will have a higher competitive advantage against sellers. Sellers can take advantage of the current market and get ahead of the game now.  

A transaction can take anywhere from one year to eighteen months to complete on average. Getting a business on the market sooner rather than later will give sellers the power to take advantage of lower interest rates and getting a deal locked in before the market is filled with a myriad of new businesses.  

A sell-side mergers and acquisitions firm helps business owners derive the most value for their businesses in a sale. Benchmark International is a firm with decades of experience and a wealth of dedicated professionals who are looking out for our clients’ best interests in a transaction from start to finish. If you want to learn more about where the market is headed and what your options are, we can help you formulate an effective exit strategy now. 

 

WE ARE READY WHEN YOU ARE. 

Call Benchmark International today if you are interested in an exit or growth strategy or if you are interested in acquiring.

Schedule a call to speak to an Analyst

Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkCorporate.com

Europe: Carl Settle at +44 (0)161 359 4400 / Settle@BenchmarkCorporate.com

Africa: Anthony McCardle at +2721 300 2055 / McCardle@BenchmarkCorporate.com

 

ABOUT BENCHMARK INTERNATIONAL

Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $5B across 30 industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 13 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.

Website: http://www.benchmarkcorporate.com
Blog: http://blog.benchmarkcorporate.com/

READ MORE >>

The Benefits of Vertical Integration As Evidenced by Apple's Intent to Purchase Assets from Dialog

Apple has agreed a deal to acquire the assets of its long-time supplier, Dialog Semiconductor, which include 300 employees and patents in a $600 million deal.

Dialog supplies power management circuits to Apple, which help to extend the battery life of its iPhones and iPads. The move comes after Apple announced in November 2018 that it was planning to phase out the use of Dialog’s products as Apple stated it would be using chips from another supplier.

This was believed to be Apple itself and, with the acquisition of Dialog’s assets, this allows Apple to bring the development of chips in-house.

READ MORE >>

Why Now is the Time to Sell to Private Equity as a Small Enterprise

Recent data from the Centre of Management Buy-Out (CMBOR) at Imperial College Business School, in association with Investec and Equistone Partners Europe, has shown that the number of small buy-out (sub-€10m enterprise value) private equity backed transactions have nearly doubled in the UK from H2 2017 to H1 2018, rising from 24 to 48 deals. Statistics also show that there has been strong growth in Europe, increasing by 26 per cent to 168 deals.

The north of England has also shown promising statistics in terms of deal value, increasing from £25m in H1 2017 to £28m in H1 2018.

READ MORE >>

Keeping Up: Benchmark International Conferences

Staying on top of industry trends and gaining practical knowledge is a top priority for Benchmark International. As such, gaining more industry knowledge requires commitment to professional development and creating more connections with potential clients and buyers. Throughout the mergers and acquisitions industry, there is a myriad of events and conferences specific to this field that Benchmark International has the opportunity to attend.

READ MORE >>
1

Subscribe to Email Updates

Recent Posts

Follow Us on Twitter