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Benchmark International Successfully Facilitated the Transaction Between Shift Left Group Limited and Planit Software Testing Limited

Benchmark International is pleased to announce the acquisition of Yorkshire-headquartered Shift Left by Sydney-headquartered Planit, for an undisclosed sum.

Shift Left provides specialist business and technology consultancy services, improving quality and reducing risk for clients by providing the strategies, solutions and advice needed to move quality earlier and throughout IT lifecycles of change. Working with clients throughout the UK and Europe, the company has a strong reputation in a niche industry with renowned blue-chip clients.

Planit is the leading provider of quality engineering solutions, consultancy, services, and training in the Asia Pacific region. The company enables businesses to deliver better software by providing the skills and solutions needed to improve the quality of their software and the way they deliver it.

Under the acquisition, Shift Left will continue to operate under its brand, with its co-founders David Rigler and Alan Upton leading Shift Left operations.

Ready to explore your exit and growth options?

According to Managing Director, Mr. Rigler, the company’s partnership with Planit will enable Shift Left to continue its focus on providing a quality service to its customers by leveraging the scale and capability that Planit has within its existing operations.

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Benchmark International Successfully Facilitated the Transaction Between Notus Heavy Lift Solutions Limited and British Engineering Services Limited

Benchmark International is delighted to announce the acquisition of Liverpool-based Notus by Warrington-based British Engineering Services.

Notus is an engineering consultancy specialising in the delivery of heavy lift and transport consultancy services, lifting assurance, and the planning and execution of lifting operations. Services are delivered across the energy, rail, defence, and construction sectors throughout the UK and Europe.

Do you have an exit or growth strategy in place?

For over 160 years British Engineering Services has been engaged in the testing, inspection, and certification of industrial machinery via its highly skilled engineer surveyors and engineering consultants. The British Engineering Services Group team has grown considerably due to ongoing recruitment activity and acquisitions and now consists of almost 1,000 people.

The acquisition is British Engineering Services' seventh since 2019 and the second conducted via Benchmark International in the last two months.

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Benchmark International Successfully Facilitated the Transaction Between Compcare Compressed Air Ltd and Rubix Group

Benchmark International is pleased to announce the transaction between Shropshire-based CompCare and London-based Rubix.

Established in 2007, CompCare specialises in outsourced air, as well as oil free and large compressed air systems. The company is a market leader in variable speed drive conversions or retrofits, heat recovery packages, and multi station control systems. Its focus is on extending the life and improving the efficiency of compressed air systems so that customers generate full value from their assets.

Rubix is Europe’s largest supplier of industrial maintenance, repair and overhaul products and services. The company has over 750 locations across 22 countries and had a turnover of €2.4 billion in 2020.

Ready to explore your exit and growth options?

The acquisition enables Rubix to provide greater and enhanced access to technical services related to compressed air in the UK. It also supports the group’s ongoing drive to remain the leading multi-specialist supplier of industrial products and services.

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Benchmark International Successfully Facilitated the Transaction Between Aprenda Ltd and BRUSH Group

Benchmark International is pleased to announce the transaction between Cambridgeshire-based Aprenda and Leicestershire-based BRUSH.

Aprenda is a high voltage electrical apparatus engineer, specialising in the installation and refurbishment of substations for blue-chip clients throughout the UK. Projects include turnkey design & build projects, preventative maintenance, equipment upgrades and new substation installations.

Founded in 1889, BRUSH is the leading independent provider of equipment, services and solutions for electrical power generation and distribution and is the world's largest independent manufacturer of generators above 20MVA. BRUSH's products are used across a wide range of end markets, including utilities, industrial, maritime, rail, data centres and renewable applications.

Do you have an exit or growth strategy in place?

The acquisition of Aprenda will provide BRUSH with a leading design engineering platform focused on UK power distribution network projects.

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Benchmark International Successfully Facilitated the Transaction Between Safety Services (UK) Limited and Phenna Group

Benchmark International is pleased to announce that Oxfordshire-based Safety Services has been acquired by Nottingham-based Phenna Group.

Safety Services is a professional consultancy offering a comprehensive range of health & safety solutions including site inspections, incident investigations, training courses, documentation & policies support, safety equipment, and general consultancy services to the construction, retail, and manufacturing sectors. The company has developed a trademarked cloud-based system which produces electronic reports to streamline administrative processes and increase accessibility to key information.

Established in 2018, Phenna provides investment and strategic leadership to companies in the testing, inspection, certification, and compliance (TICC) sector. Its aim is to build a global portfolio of independent TICC businesses.

Safety Services is the group’s seventh acquisition in 2021 and the first in the UK focused on HSE services. The Safety Services transaction comes just after Phenna Group’s acquisition of Ecology Solutions, a transaction also conducted via Benchmark International. Phenna has also previously worked with Benchmark International on the acquisitions of GMES and Facit Testing.

Ready to explore your exit and growth options?

Mike Fitchett, Founder of Safety Services commented: “I am very pleased to partner with Phenna Group. As I plan to step back from my managerial responsibilities, it was important for me to secure an experienced and ambitious partner to work with Jon Austin, who will lead the team as Managing Director. From my first engagement with Paul and his team, they have been professional and trustworthy. That has given me great confidence that the business is in capable hands and I look forward to the next phase of our expansion, working in close collaboration with the Phenna Group team.”

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Benchmark International Successfully Facilitated the Transaction Between Blow Abbott and A P Robinson & Co

Benchmark International is pleased to announce the merger between North East Lincolnshire chartered accountants Blow Abbott and A P Robinson & Co.

Established in 1967, Blow Abbott is a ICAEW chartered accountancy practice and payroll service provider for SMEs, providing a turnkey service including final and management accounts, and cloud accounting software management.

A P Robinson & Co is a well-established firm of chartered accountants and business advisers providing accountancy, taxation and business advisory services to a wide range of business and private clients across Lincolnshire and Yorkshire.

Ready to explore your exit and growth options?

The new firm is expected to be at the forefront of technological progress and offer clients an ever-broader portfolio of services to support, guide and grow their business and profit.

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Benchmark International Successfully Facilitated the Transaction Between Moorland Fuels Limited and Craggs Energy Group Limited

Benchmark International has successfully facilitated the transaction between Moorland Fuels Limited (“Moorland Fuels”) and Craggs Energy Group Limited (“Craggs Energy”).

Devon-based Moorland Fuels is a distributor of fuels including kerosene and diesel. The company serves domestic, commercial, and agricultural customers within a 30-mile radius of its strategically located rural depot.

Craggs Energy supplies kerosene, gas oil, DERV and a wide range of industrial fuels and lubricants to homes, farms, businesses, and public sector customers throughout the UK via its delivery depots spread across the North West and Yorkshire, as well as its national partner network.

The acquisition allows Moorland Fuels to benefit from a shared vision, growth and further investment, whilst enabling Craggs Energy to grow in the South West.

Ready to explore your exit and growth options?

Abby Turner, sales and marketing manager at Moorland Fuels, commented: “Being part of the Craggs Energy Group enables Moorland Fuels to expand our operations. We are already benefiting from significant investment from the Craggs team and are looking forward to the new opportunities ahead while continuing to provide the excellent service that Moorland Fuels is known for.”

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How To Announce An Acquisition

When a company is sold, it can have major effects on employees, customers, clients, and suppliers. Uncertainty stokes fear in most people, as they wonder about their security and their futures. Even top management can feel as though they failed at their jobs when the company is being bought out. For these reasons, it is important that the messaging and transition planning is handled very carefully and thoughtfully leading up to an acquisition—especially considering that the majority of acquisitions fall through. Announcing the news too early can cause widespread unrest over a deal that never happens

Communication is everything in this situation, but it needs to be planned. Before announcing a single word about the sale of the company, you should have a solid plan in place. A consistent message is critical and the distribution of the information should be carefully coordinated both internally and externally to avoid misinformation and confusion. Your plan should clearly outline intentions, steps, timelines and how the process will affect all parties. Predetermine what will be conveyed by whom and when. Figure out how to address questions that you are unable to answer and consider all potential scenarios for all parties involved. And always remember how critical confidentiality is during this time. You do not want details leaking to the press before you are ready to go public.  

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Benchmark International Successfully Facilitated the Transaction Between Watterson Financial Planning and Connectus Wealth Advisers

Benchmark International is pleased to announce the sale of Knutsford-based financial planning firm, Watterson Financial Planning, by Focus Financial Planning (Focus) subsidiary, Connectus Wealth Advisers (Connectus).

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Benchmark International Successfully Facilitated the Transaction Between Woodall Group and BGF

Benchmark International is pleased to announce that Derbyshire-based Woodall Group has secured a £4.25m investment from BGF.

Woodall Group, the owner of Woodall Homes, is an independent housebuilder, specialising in mid-market homes and providing a turnkey service from identifying brownfield sites, securing purchase options, and applying for planning permission, through to construction and fit-out.

BGF is the most active growth investor in the world, providing growth capital for small and medium-sized enterprises in the United Kingdom and Ireland, making initial investments between £1m and £15m. It has 16 offices across the UK and Ireland including London, Edinburgh, Belfast, and Dublin.

Ready to explore your exit and growth options?

Known for its strong emphasis on premium finishes, build quality and a housing design that complements local surroundings, with sustainability embedded in the construction process, the funding will support Woodall Group deliver more high-quality properties and create further job opportunities.

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Benchmark International Successfully Facilitated the Transaction Between Ace Security & Electrical Ltd and Churches Fire Security Ltd

Benchmark International is pleased to announce the sale of Essex-based Ace Security & Electrical to Churches Fire & Security.

Established in 1981 and specialising in all aspects of fire and security, Ace Security & Electrical designs, installs, and maintains a vast range of security and fire safety systems, specialising in technologically complex and intricate solutions. It supplies to commercial and domestic clients such as educational establishments and local authorities, as well as several well-known celebrities.

Churches Fire & Security has provided fire safety and security services to over 40,000 sites in the UK for over 20 years, offering fully integrated services including sprinklers, fire alarms, fire door inspections, emergency lighting, fire extinguishers, dry risers, suppression systems, intruder alarms, CCTV systems and access control.

The acquisition of Ace Security & Electrical allows Churches Fire & Security to enhance its South East offering, supporting the business strategy of becoming the most comprehensive fire safety and security provider in the UK.

Ready to explore your exit and growth options?

Jim Lander & Neil Armstong, Directors at Ace Security & Electrical, said: “We are extremely pleased to announce the sale of Ace Security & Electrical to Churches Fire & Security. We are convinced that Churches will honour the almost 30 years of hard work that has gone into making Ace one of the UK’s leading supplier and service organisations in the fire and security sector. Looking after our staff and customers was the number one priority throughout this process, and we are confident that Churches shares this outlook.”

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What The Heck is M&A?

Mergers and acquisitions (M&A) involve the consolidation of ownership of companies through financial transactions. They serve as vital components of business strategies, allowing companies to innovate, evolve, and sometimes even survive. You may hear the terms "mergers" and "acquisitions" used interchangeably, but they are two fundamentally different types of transactions. Both processes are comprised of several phases, and both can take several months to years to complete. Some of the world’s largest and most successful companies grew to become what they are today through M&A activity.   

The motivations behind M&A deals can be:

  • Creation of synergy for lower cost of capital
  • Improved performance and accelerated growth
  • Achievement of economies of scale
  • Increased market share
  • Diversification of products
  • Expansion of geographic markets
  • Strategic realignment and technological advancement
  • Diversification of risk
  • The opportunity of an undervalued target
  • Tax advantages

Mergers

A merger occurs when two companies join forces to do business as a single new entity, combining ownership and operations. In these situations, the stock of both companies is surrendered and new company stock is issued in its place. Stockholders of both companies must approve the transaction and consolidation of the businesses creates a new entity. Mergers can be structured in various ways:

  • Horizontal Merger - The union of two companies in direct competition that share similar products or services and markets.
  • Vertical Merger - Occurs between either a customer and a company, or a supplier and company, with complementary offerings.
  • Congeneric or Concentric Merger - When two companies that serve the same consumer in different ways join forces as one company.
  • Market-Extension Merger - Joining of two companies that sell the same products but do so in different markets.
  • Product-Extension Merger - Takes place between two companies that sell different but related products in the same market.
  • Conglomerate Merger - The merger of two non-competing companies that have no shared or common business areas.

 

Ready to explore your exit and growth options?

 

Acquisitions

An acquisition occurs when one business purchases and takes over another one using cash, stock, or both, and establishes itself as the new owner. Once the buyer absorbs the business, the purchased company ceases to exist and their stock ceases to be traded. A simple acquisition often means that the acquirer obtains the majority stake in the purchased business and does not change its name or alter its legal structure. And sometimes a target company does not wish to be purchased. This is known as a hostile acquisition or takeover. In this situation, the acquiring company approaches the shareholders of the target company, bypassing the board of directors or executives. The target company may be acquired without the consent of upper management as long as the shareholders approve the transaction.

Management Acquisitions 

Also referred to as a management-led buyout (MBO), the executives of an organization partner with a financier to buy a controlling stake in another business, making it private. These types of deals are often financed with debt, and must be approved by shareholders.

Tender Offers

A tender offer is when one business goes straight to the other company's shareholders and offers to purchase the outstanding stock of the business at a specific price. It is common for tender offers to result in mergers.

Acquisition of Assets 

This occurs when one company acquires the assets of another company upon approval from its shareholders. This is common during bankruptcy proceedings, allowing for other businesses to bid on assets of the bankrupt firm, which is then liquidated upon the final transfer of assets.

Reverse Merger

There is also another acquisition type known as a reverse merger. This enables a private company with strong prospects to buy a publicly listed shell company with limited assets and without legitimate operations. Together they become a new public company with tradable shares.

Contact Us

M&A deals are some of the oldest and most reliable growth strategies in business. But they do require quite a bit of groundwork and complex valuation processes. In fact, it is not uncommon for M&A transactions to fail. If you are considering a merger or acquisition for your company, please reach out to our M&A advisory team at Benchmark International to get award-winning guidance and plan the next steps for your future and the growth of your company. We are experts at getting the most value for a business in a sale and we can help you decide if a merger or acquisition is right for you.

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Benchmark International has Successfully Advised the Shareholder of Group Management Electrical Surveys Ltd on the Sale to Phenna Group

Benchmark International is pleased to announce the transaction between Yorkshire-based Group Management Electrical Surveys (GMES) and Nottingham-based Phenna Group.

Established in 1990, GMES provides specialist electrical services to international blue-chip clients. It concentrates on delivering independent electrical inspection and testing services in line with BS7671 and IET Guidance Note 3 for all types of new build electrical installations, in addition to thermal imaging surveys and electrical installation condition reports.

Phenna is a group of specialist businesses focused on the testing, inspection, certification, and compliance (TICC) sector. Its aim is to build a global portfolio of independent TICC businesses, with GMES representing Phenna Group’s fifth acquisition since its formation less than 12 months ago.

Ready to explore your exit and growth options?

Steve Cressey, Managing Director of GMES will continue in his current role, alongside the company’s very experienced management team and highly skilled workforce.

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Benchmark International has Successfully Facilitated the Sale Between RG Distributors Limited and Headway Point Ltd

Benchmark International is pleased to announce the transaction between online supplier of catering equipment, RG Distributors (trading as eCatering), and private investor, Headway Point.

eCatering is an online supplier of commercial and domestic catering equipment such as refrigerators and cooking and food preparation equipment to restaurants, cafes and hospitals, as well as to end-users. It is also involved in the secondary supply of UV sterilisers directly to hairdressers, tattoo artists and dog groomers. Operations are conducted from offices in Cumbria with 40,000 sq ft of warehousing facilities in Kendal and Manchester.

Headway Point is led by Duncan Evershed, a private investor.

Ready to explore your exit and growth options?

On behalf of everyone at Benchmark International, we would like to wish both parties every success for the future.

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Benchmark International has Successfully Facilitated the Transaction Between Ecologia Environmental Solutions and RSK Group

Benchmark International has advised on the transaction between remediation specialist, Ecologia, and environmental and engineering services specialist, RSK.

Founded in 2000, Ecologia provides services in the area of contaminated land consultancy, site investigation and remediation, and specialised support for environmental claims. With headquarters in Sittingbourne and further sites in Stafford, Devon and Bologna, Ecologia employs a workforce of 45.

RSK is an integrated environmental, engineering and technical services consultancy, which has 36 international offices, more than 2,700 employees and an annual turnover of £200m. It is currently investing in the development of new businesses, bolt-on complementary businesses, equipment and capabilities to increase its services and expand internationally.

Ready to explore your exit and growth options?

With Ecologia previously supporting RSK on projects, most recently in Africa and the Dominican Republic, joining forces will enable RSK to strengthen its internal site remediation resources and equipment, grow its remediation capability and expand into new markets. As well, with Ecologia’s base in Italy and extensive international experience, the company also strengthens RSK’s international expansion across Europe.

Ecologia will join RSK’s contracting division under the direction of RSK Divisional Director Claire Knighton but will continue to be led by current Managing Director Giacomo Maini.

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Benchmark International Advises on the Transaction Between Maitland Medical Service Limited and The Doctors Clinic Group Limited

Benchmark International is pleased to announce the transaction between Kent-based Maitland Medical and London-based The Doctors Clinic Group (DCG).

Established in 1995, Maitland Medical is an occupational health advisory/consultancy, supporting businesses with recruitment, the promotion of wellbeing at work and absence management. It has a strong team of occupational health specialists delivering tailored, high quality clinical advice and support for corporate clients, SMEs, schools and academies.

DCG provides a comprehensive range of affordable GP services, including consultations, health screens, blood tests, diagnostics and some common secondary care pathways, from 15 locations throughout London. It provides affordable and easy access for individuals, corporates and insurers to private GPs.

Ready to explore your exit and growth options?

The acquisition is part of a strategy to become a national healthcare services platform in the UK, allowing both companies to extend their geographical reach and allow DCG to offer additional services such as absence management and ‘fitness for task’ medicals.

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Benchmark International has Successfully Facilitated the Transaction Between BrightOffice Limited and ClearCourse Partnership

Benchmark International has advised on the transaction between cloud-based CRM developer, BrightOffice, and ClearCourse Partnership, a group of technology companies, for an undisclosed sum.

BrightOffice was founded in 2004 and has developed a customisable, cloud-based software platform through which it delivers specialised CRM products for around 300 clients across a variety of sectors.

ClearCourse is a growing partnership of innovative technology companies providing membership and payments software platforms to groups, organisations and small businesses. A highly acquisitive company, BrightOffice marks ClearCourse’s 14th acquisition since October 2018 and the second CRM purchase after it acquired not-for-profit CRM Protech earlier this month.

Do you have an exit or growth strategy in place?

ClearCourse has the financial backing of Aquiline Capital Partners, a New York and London-based private equity firm with AUM of approximately $3.5bn.

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Benchmark International Has Successfully Facilitated the transaction between OQEMA and Rocara

Benchmark International is delighted to announce the sale of the group of Rocara companies, Rocara Limited and Rocara Ireland, to global chemical manufacturing and distribution company, OQEMA, for an undisclosed sum.   

Rocara, with operations in Belfast and Dublin, provides a wide range of general and speciality chemicals, solvents and surfactants. Since its foundation in 2006 the group of companies has been a driving force in the chemical distribution and manufacturing market in the Republic of Ireland and Northern Ireland, representing global manufacturers.

With headquarters in Mönchengladbach, Germany, and a base in Oxfordshire, OQEMA is a global chemical manufacturing and distribution company. It is one of the five largest chemical distributors in Germany and one of the top ten in Europe with almost 1,100 employees currently working for OQEMA at 40 locations in 20 countries.

Ready to explore your exit and growth options?

This is a major strategic acquisition for the companies, providing an opportunity for customers across both businesses to benefit from existing supplier relationships and giving OQEMA a significant footprint in Northern Ireland and the Republic of Ireland, completing its portfolio of UK companies to drive growth in Europe.

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What is Private Equity? FAQs About the Industry

What is private equity?

Private equity (PE) is medium to long-term finance provided in return for an equity stake in a company. The objective of the PE company is to enhance the value of a company in order to achieve a successful exit (i.e. sale).

 

Where do PE firms get their money?

PE firms generally invest funds they manage on behalf of groups of individuals, pension funds, and other major organisations.

 

What types of companies do PE firms invest in?

PE firms look for companies that can offer a lucrative exit within three to seven years. Therefore, the company has to be large enough to support investments from the PE firm and have the potential to offer large profits in a relatively short timeframe. This means that PE firms buy companies with strong growth potential, or companies that are currently undervalued because they’re in financial difficulties.

 

How are PE fund managers compensated?

PE fund managers receive their income via two channels – management fees and carried interest.

A management fee is paid by the limited partners (the people who provided money to invest) to the PE firm to pay for their involvement. The fee is calculated as a percentage of the assets to pay for ongoing expenses such as salaries.

Carried interest is a percentage of profits that the fund gains on the investment. This compensation helps to motivate the PE fund managers to improve the company’s performance.

What is a platform company?

A platform company is the initial acquisition made by a PE firm in a specific industry. Typically, a platform company has a strong management team to drive the company forward and a proven track record in a specific industry. This company is the foundation for subsequent companies acquired in the industry.

Ready to explore your exit and growth options?

 

What is a bolt-on company?

A bolt-on company is in a trade which the PE firm has already invested and is added on to one of its platform companies. The fund will look for bolt-ons that provide competitive services, new technology or geographic footprint diversification, as well as companies that can be quickly integrated into the existing management structure. Typically, a bolt-on company is smaller than a platform company and has minimal infrastructure in terms of finance and administration.

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9 Ted Talks Every Business Owner Should Watch

1. Globalization Isn't Declining—It's Transforming
Arindam Bhattacharya

https://www.ted.com/talks/arindam_bhattacharya_globalization_isn_t_declining_it_s_transforming

Mr. Bhattacharya is a Boston Consulting Group Fellow, Senior Partner in their New Delhi office, and worldwide co-leader of the BCG Henderson Institute in Asia. Hear his interesting argument as to why globalization is not going extinct but instead is evolving due to cross-border data flow.

2. How to Build a Company Where the Best Ideas Win
Ray Dalio

https://www.ted.com/talks/ray_dalio_how_to_build_a_company_where_the_best_ideas_win

Mr. Dalio is the founder, chair, and chief investment officer of Bridgewater Associates, the largest hedge fund in the world. Learn how his strategies helped him create such a successful hedge fund and how you can use data-driven group decision making to your advantage.

3. Why the Secret to Success is Setting the Right Goals
John Doerr

https://www.ted.com/talks/john_doerr_why_the_secret_to_success_is_setting_the_right_goals

In this talk, engineer and venture capitalist Mr. John Doerr discusses the established goal-setting system "Objectives and Key Results," or "OKR," which is currently being used by companies such as Google and Intel.

4. The Global Business Next Door
Scott Szwast

https://www.ted.com/talks/scott_szwast_the_global_business_next_door

Mr. Szwast is the marketing director for UPS, and he has spent 25 years supporting the international transportation industry. In this talk, he explains how the image of global business is misunderstood and why businesses should stop hesitating to consider crossing borders.

Do you have an exit or growth strategy in place?


5. How to Break Bad Management Habits Before They Reach the Next Generation of Leaders
Elizabeth Lyle

https://www.ted.com/talks/elizabeth_lyle_how_to_break_bad_management_habits_before_they_reach_the_next_generation_of_leaders

Tune in as esteemed leadership development expert Elizabeth Lyle offers a new approach to cultivating middle management in fresh, creative ways.

6. Business Model Innovation: Beating Yourself at Your Own Game
Stefan Gross-Selbeck

https://www.ted.com/talks/stefan_gross_selbeck_business_model_innovation_beating_yourself_at_your_own_game

Mr. Gross-Selbeck is Partner at BCG Digital Ventures, and he has 20 years of experience as an operator and a consultant in the digital industry. In this talk, he discusses the unique aspects of today's most successful start-ups. Also, he shares strategies for duplicating their philosophies of disruption and innovation that can be applied for any business.

7. How the Blockchain is Changing Money and Business
Don Tapscott

https://www.ted.com/talks/don_tapscott_how_the_blockchain_is_changing_money_and_business

Mr. Tapscott is the executive chairman of the Blockchain Research Institute. In this talk, he explains Blockchain technology and why it is crucial that we understand its potential to redefine business and society completely.

8. What it Takes to Be a Great Leader
Rosalinde Torres

https://www.ted.com/talks/roselinde_torres_what_it_takes_to_be_a_great_leader?referrer=playlist-talks_for_when_you_want_to_sta

In this talk, leadership expert Rosalinde Torres describes simple strategies to becoming a great leader, based on her 25 years of experience closely studying the behavior and habits of proven leaders.

9. How Conscious Investors Can Turn Up the Heat and Make Companies Change
Vinay Shandal

https://www.ted.com/talks/vinay_shandal_how_conscious_investors_can_turn_up_the_heat_and_make_companies_change

Mr. Shandal is a partner in the Boston Consulting Group's Toronto office, leading their principal investors and private equity practice. Hear his chronicles of top activist investors and how you can persuade companies to drive positive change.

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The Value In Hiring An M&A Advisor

When the time has come for you to sell your business, there are plenty of reasons why you do not want to embark on this journey alone. Enlisting the help of a trusted M&A advisor can make a world of difference in the process and, most importantly, the results.

A Better Process.

Selling a business takes time. It can take up to one year to complete a sale. Think about what you need to be doing during that time. You still have a company to run, and this is the most critical time for your company to be running smoothly and performing well. Selling a company requires a great deal of time and attention. For an owner, this time and attention needs to be focused on the day-to-day running of your business. You do not want be so preoccupied with the sale of your company that you end up neglecting the business that ultimately should be generating maximum results during this time. If your company falls short of expectations, it could result in a botched deal. Basically, you need to be operating your business as though you are not going to sell.

When you form a partnership with an experienced M&A advisor such as Benchmark International, you will have an expert dedicating their time to the sale of your business, so you can remain a strong leader for your company. You will still be heavily involved in the process, never missing an update on opportunities and negotiations. The difference is that you will not be bogged down by certain details, time critical deadlines on the deal won’t pull you away from key business situations, and your advisor will be there to resolve any issues that arise along the way.

 

Ready to explore your exit and growth options?

 

Essentially, an M&A advisor is going to do all the heavy lifting for you. They will prepare the necessary marketing materials, find quality prospective buyers, market your business, negotiate terms, manage the due diligence process, arrange the closing, and even help you plan the transition and your exit strategy. Your time is precious and so is your business. Give them both the attentiveness they deserve.  

Better Results.  

Experienced buyers know what to look for in a company. They know how to get the most value from a merger or acquisition. Meanwhile, it is likely that you have never sold a business before, giving the buyer a major advantage in negotiating a sale. You need someone in your corner whose wholehearted motivation is to exceed your goals and get you the most value for your company. This includes the exploration of the full spectrum of your options, and even knowing when to walk away from a deal.  

In a recent study titled The Value of Middle Market Investment Bankers:

  • 100 percent of owners who sold their businesses with the help of an M&A advisor or investment bank said that the advisor added value to the transaction.
  • For 84% of business owners, their final sale price was equal to or higher than the initial sale price estimate provided by their advisor.
  • Business owners viewed “managing the M&A process” as the most valuable service provided by their advisor.

Selling your company is a very complex process. Some business owners think they can simply broker a sale through their accountant or their attorney, but these professionals do not have access to the databases, connections, and methodologies that you will gain with an M&A advisor. Another important quality that an M&A advisor brings to the table is a solid understanding of the market and precisely WHEN to sell to get the most value.

These are some characteristics that you should look for in an advisor:

  • They understand your industry, your business, and its value.
  • They have both global connections and local expertise that allow them to identify prospective buyers that are serious and high quality.
  • They know the fair market value and will work to get you maximum value.
  • They have a disciplined process and a proven track record.
  • They have opportunities that are confidential and exclusive.
  • They structure their compensation to align their interests to yours.
  • They listen to your aspirations and concerns as a true partner.

Are You Ready to Sell?

If you feel that you are ready to sell your company, you will want to partner with an M&A firm such as Benchmark International sooner rather than later. Getting ahead of the game means that your business will be properly prepared for maximized value. However, no matter what stage you are at in the process, it is never too late to ask for our expertise.

 

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Is a Minority Rollover Your Selling Solution?

If you are considering selling your business, but you are not completely sure you want to sell a 100% stake, “rolling over” (essentially, “retaining”) a minority interest in the business may be a favorable solution for you. Rolling over a minority interest allows you to retain less than 50% stake, along with certain rights that you can negotiate prior to sale. It is common for minority interest ownership to range from 20% to 30%. It is also sometimes referred to as non-controlling interest because you have very little influence over business decisions. This arrangement can be an ideal solution if you are not quite ready to relinquish your company altogether, but you do not want to deal with the burdens of ownership. In the case that you do want to remain involved in business decisions, there is the option to negotiate a seat on the board or certain contractual protections. These protections could apply to items such as the termination of certain employees, deviation from the operating budget, or relocation of the company’s offices, as a few examples.

Ready to explore your exit and growth options?

Minority rollovers are becoming increasingly popular because of the many advantages these types of arrangements provide for both owners and investors. In fact, 2018 was a record-high year for venture capital spending, with $21 billion in minority rollovers. There is optimism that this activity will remain steady through 2019, depending on various macroeconomic issues across the globe.

Advantages of Selling a Majority Stake

A noteworthy benefit of being a minority owner is that you are able to share ownership in a growing business. A private equity investor is absolutely going to be driven to grow the business to boost the value for a future sale. They are going to invest the time and money (that you may not have) to make it thrive as much as possible. You get to sit back and relax while they do all the heavy lifting to grow the company that you started. The amount of money that private equity investors usually put into a business can be quite substantial and make a significant difference in the company’s value. 

Since the majority investor intends to grow the business for a future sale, that second sale is another advantage for you as a minority owner. A larger, well-run business is going to sell with a larger price tag. This can often be the result of reduced competition, improved technologies, new products, and more efficiency. Consequently, even though you have a minority stake, you end up cashing out with a larger return.

Something else to consider when selling a majority stake in your business is the lower tax bill for the time being. Depending on how the deal is structured, you may not have to pay taxes on the equity you put back into the company. Taxes will not be owned until a future sale.

It is also worth keeping in mind that there is the possibility that you could re-purchase the majority stake in your business and re-establish control. However, the value of your company is likely going to be much higher, so there is the potential that it will be expensive. On the other hand, you may also elect to sell your equity back to the majority investor if the business does not perform as expected or should you decide that it is time for you to exit the business completely.

There is also the option of what is known as tag-along rights, which allow you to remain an owner even in the event that majority equity changes hands. Furthermore, it is not uncommon for a majority investor to require a drag-along provision. This means the minority owner would be required to participate in any sale of the company because the majority owner does not want them to be able to prevent a sale. These provisions would need to be established during the negotiation of any deal.

All owners of minority interests should assess different exit strategies and transfer restrictions. You will want sufficient protections in place while retaining the right to divest under beneficial terms and conditions. An experienced broker can help with exit planning and ensure that you orchestrate the best arrangement for you.

 

Are You Ready to Sell?

If you think it is time to sell a majority stake in your business, you are going to want to negotiate the most advantageous deal possible. You are putting a lot on the line and the process is sure to be complicated. In order to ensure that you get the right buyer, the right terms, and the right price, you need the right partner. Benchmark International has a team of specialists that arrange these types of deals every day. Even if you are not sure about selling, we can answer your questions and help you determine what is best for you, your business, and your exit plan. One simple phone call or email to us can start the process and provide you with the level of peace of mind that you deserve.  

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Assumptions Matter! What Assumptions Form the Foundation of An M&A Transaction?

Assumptions form the foundation of every facet of an M&A transaction. They permeate every fiber of a deal. Sellers make assumptions. Buyers make assumptions. Lawyers, accountants, wealth managers, and other advisors make assumptions. Deals are built upon assumptions.  When assumptions are thoughtful, reasonable and defensible, there is a much higher likelihood of success.Buyers may assume they can get three turns of EBITDA in senior debt and another turn of second lien debt when determining both valuation and deal structure. However, what happens to the deal if those assumptions prove faulty?  Assumptions should be tested.  Before proceeding, apply a reasonable test.Determine if the assumptions will survive further scrutiny. Are they defensible? If they are not, challenge them and make the appropriate course correction.  

Ready to explore your exit and growth options?

Buyers often use Discounted Cash Flow (DCF) as at least a data point to derive a valuation. However, as any finance student or professional will tell you, DCF is limited by the inputs; the assumptions you make. One has to make assumptions as to the cash flows derived by the business, a terminal value, a growth rate and their cost of capital. Each of those is a lever that a seasoned professional can pull to move the results.  So, the results are subject to confirmation bias. I can make the model spit out a number that aligns with my preconceived notion as to value. Further, I can make the results provide evidence to a narrative that portrays the business in the most positive (or negative) light. Again, assumptions matter. They need to be reasonable and defensible. 

Sometimes we will see buyers assume that all businesses in a specific industry are perfect substitutes. I’ve seen buyers point to other sellers on the market with more “reasonable” price expectations. But that assumption, on its face, is flawed at best and perhaps intellectually dishonest. No two business are alike. They are living, breathing beings with unique people, processes, supply chains, distribution channels, relationships etc.Two businesses that compete with similar services or products will yield different valuations from buyers. Those differences in valuation may be vast.  Why is that, you ask? The answer is businesses are not fungible. They are not interchangeable. They aren’t gold, silver, frozen orange juice or any other commodity.  They don’t trade purely on price as they have unique aspects to them.  As such, we at Benchmark, as a sell side mergers and acquisitions firm, really thrive when we encounter a buyer with this argument.  We love it when a buyer brings that level of analysis to defend their assumptions.  Our clients do too. 

Assumptions matter on the sell side when contemplating net proceeds. Every seller concerns themselves with the amount they will take home once all fees and taxes are accounted for.  More importantly, they want to know if they can “live on” those proceeds.  When considering this question, make sure all of the inputs into the waterfall are reasonable and defensible.  The waterfall demonstrates the net proceeds to the seller accounting for all expenses and taxes. Are your tax assumptions correct?  Make sure you engage advisors that understand transaction tax. Your CPA may not be qualified to dig in here as the questions and answers aren’t black and white.  Often times, the sell side law firm has an M&A tax specialist on the team and that person may be best suited to assist. 

Let’s address the aforementioned question; how much do you need at closing to maintain my lifestyle? Again, as before, the assumptions here matter.  You may not know the market opportunities available to you post-close as perhaps you’ve never had the power and influence that may come from a sizeable pool of investable capital. We suggest sellers speak to wealth advisors to determine if their risk tolerances and investment goals align with the cash flow they require.  We have worked with wealth managers that specialize in working with small business owners transitioning out of ownership for the first time.  They will work with you to determine the proper asset allocation for your proceeds and provide the basis for sound assumptions as to rates of return. They will also review your entire financial profile and exposure to assist you.

Assumptions matter for your advisors. Attorneys may mistakenly assume a seller is adamant about an issue that may in fact be unimportant to the seller. Other advisors may apply their own biases to a deal and assume both buyer and seller think as they do. I’ve found that making this sort of assumption, that buyers and seller think as I do on all matters, leads to poor guidance and poor decision making. 

So, what is the cure for all of these issues that result form poor assumptions you ask?  Simply ask the other party, whether on other side of the transaction or on the same side, to present and defend their assumptions. Once the assumptions are on the table it is easy to test them to determine if they are credible, reasonable and defensible. 

Author
Dara Shareef
Managing Director
Benchmark International
Ready to explore your exit and growth options?

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

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Benchmark International Successfully Facilitated the Acquisition of Comprehensive Clinical Trials and Advanced Clinical Trials by Vitalink Research

Benchmark International has successfully facilitated the acquisition of Comprehensive Clinical Trials, LLC and Advanced Clinical Trials, LLC (hereinafter referred to as CCT) by Vitalink Research, LLC. (hereinafter referred to as Vitalink).

CCT is an accomplished clinical research site specializing in conducting Phase II - IV clinical trials. It serves over 400 sponsors ranging from small biotech companies to the world's largest pharmaceutical and medical device companies and has completed hundreds of trials.

Vitalink is a US network of fully integrated clinical trial sites, connects world-class physicians and medical professionals with site managers and research coordinators to set the standard for the timely execution of clinical trial protocols with trustworthy results across all sites.

 

Ready to explore your exit and growth options?

 

I am excited to partner with the entire VitaLink Research team to further grow our combined business over the coming years,” said Dr. Ronald Ackerman, Founder and Medical Director of CCT. From my first meeting with VitaLink, it was clear that we shared a common culture rooted in clinical excellence and quality patient care. I look forward to this next chapter for myself and my dedicated staff”

“The partnership with Comprehensive Clinical Trials enables VitaLink to further establish itself as one of the leading wholly- owned clinical research site companies in the Southeast,” said Nick Wright, CEO of VitaLink Research. The addition of CCT partners VLR with the fantastic team that Dr. Ronald Ackerman has built throughout his distinguished career as a physician and Principal Investigator. This partnership expands our therapeutic capabilities into a very important and growing area of drug development research and our geographic footprint.

“I’m very excited for both CCT and VitaLink for consummating this partnership. As with every deal, this transaction faced a small number of issues through the diligence process. Thankfully, both sides had practiced professionals which allowed us to work through the various issues and find a way to make both sides happy. With this acquisition, VitaLink will break into theWomen’s Health sector with a major statement. Through the leadership of Dr. Ackerman, Vitalink will quickly become a widely recognized leader in this highly specialized study area.” said Benchmark International Associate Transaction Director David Steverson.

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Webinar: How to Appeal to the Broadest Range of Buyers when Selling Your Company

When selling your business, dealing with the various types of buyers present in today’s market is both a curse and a blessing. It’s a blessing in that, aspects of your business that may not appeal to a certain buyer type may appeal to, or at least not be an issue with, other types of buyers. But a hundred different curses almost offset this large benefit. What do different buyers prioritize? How do you appeal to two or more different types of buyers at the same time? How do different buyer types run their decision-making processes? Which buyer types should you pursue? How do you even know what type of buyer you are dealing with?

Register for Webinar

In a world with only one type of buyer, the company sale process is greatly simplified. They might all like to hear the company’s story the same way. They might look at the financial statements the same way. They might all operate on the same timeline with the same seasonal variations. And, they might even be susceptible to being found in the same place from time to time. But, what is currently driving the robustness of today’s M&A markets are in fact the imbalance between the number of buyers and the number of sellers in the arena. And this, in turn, is largely driven by the increasing diversity of buyer types now competing with one another for that limited supply of opportunities.

In today’s market, one of the worst moves a seller can make is to market to only one type of buyer or, even worse, run a process expressly excluding one or more types of buyers. The success of any current sale process relies on a much more sophisticated approach to marketing, than was the case a decade ago - one that catches the interest of all buyer groups simultaneously and excites them for the opportunity to investigate further. The first step in exploiting this development is to identify the strengths, weaknesses, and priorities of the various buyer types. This webinar will start with this analysis and then move quickly onto strategies for playing to various buyer characteristics.

Host:
Clinton Johnston
Managing Director
Benchmark International

Register for Webinar

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A Seller’s Guide to a Successful Mergers and Acquisitions Process

The Mergers and Acquisitions (M&A) process is exhausting. For most sellers, it’s a one-time experience like no other and a marathon business event. When done well, the process begins far in advance of the daunting “due diligence” phase and ends well beyond deal completion. This Seller’s guide summarizes key, and often overlooked, steps in a successful M&A process.

Phase I: Preparation – Tidy Up and Create Your Dream Team.

Of course, our own kids are the best and brightest, and bring us great pride and joy. Business owners tend to be just as proud of the company they’ve built, the success of their creation, and the uniqueness of their offering. Sometimes this can cloud an objective view of opportunities for improvement that will drive incremental value in a M&A transaction.

For starters, sellers must ensure that company financial statements are in order. Few things scare off buyers or devalue a business more than sloppy financials. A buyer’s Quality of Earnings review during due diligence is the wrong time to identify common issues such as inconsistent application of the matching principle, classifying costs as capital vs. expense, improper accrual accounting, or unsubstantiated entries. In addition, the ability to quickly produce detailed reports – income statement; balance sheet; supplier, customer, product, and service line details; aging reports; certificates and licenses; and cost details – will not only drive up buyer confidence and valuations, but also streamline the overall process.

Key in accomplishing the items above as well as a successful transaction is having the right team in place. Customarily, this doesn’t involve a seller’s internal team as much as his or her outside trusted advisors and subject matter experts. These include a great CFO or accountant, a sell-side M&A broker, a M&A attorney, and a tax and wealth manager. There are countless stories of disappointed sellers who regretted consummating a less-than-favorable transaction after “doing it on their own.” The fees paid to these outside subject matter experts is generally a small part of the overall transaction value and pays for itself in transaction efficiency and improved deal economics.

 

Ready to explore your exit and growth options?

 

Phase II: On Market – Sell It!

At this stage, sellers that have enlisted the help of a good M&A broker have few concerns. The best M&A advisors are very hands on and will manage a robust process that includes the creation of world class marketing materials, outreach breadth and depth, access to effective buyers, client preparation, and ongoing education and updates. The seller’s focus is, well, selling! With their advisor’s guidance, a ready seller has prepared in advance for calls and site visits. This includes thinking through the tough questions from buyers, rehearsing their pitch, articulating simple and clear messages regarding the company’s unique value propositions, tailoring growth ideas to suit different types of buyers, and readying the property to be “shown.”

Most importantly, sellers need to ensure their business delivers excellent financial performance during this time, another certain make-or-break criterion for a strong valuation and deal completion. In fact, many purchase price values are tied directly to the company’s trailing 12-month (TTM) performance at or near the time of close. For a seller, it can feel like having two full time jobs, simultaneously managing record company results and the M&A process, which is precisely why sellers should have a quality M&A broker by their side. During the sale process, which usually takes at least several months, valuations are directly impacted, up or down, based on the company’s TTM performance. And, given that valuations are typically based on a multiple of earnings, each dollar change in company earnings can have a 5 or 10 dollar change in valuation. At a minimum, sellers should run their business in the “normal course”, as if they weren’t contemplating a sale. The best outcomes are achieved when company performance is strong and sellers sprint through the finish line.

Phase III: Due Diligence – Time Kills Deals!

Once an offer is received, successfully negotiated with the help of an advisor, and accepted, due diligence begins. While the bulk of the cost for this phase is borne by the buyer, the effort is equally shared by both sides. It’s best to think of this phase as a series of sprints and remember the all-important M&A adage, “time kills deals!” Time kills deals because it introduces risk: business performance risk, buyer financing, budget, or portfolio risk, market risk, customer demand and supplier performance risks, litigation risk, employee retention risk, and so on. Once an offer is received and both sides wish to consummate a transaction, it especially behooves the seller to speed through this process as quickly as possible and avoid becoming a statistic in failed M&A deals.

The first sprint involves populating a virtual data room with the requested data, reports, and files that a buyer needs in order to conduct due diligence. The data request can seem daunting and may include over 100 items. Preparation in the first phase will come in handy here, as will assistance from the seller’s support team. The M&A broker is especially key in supporting, managing, and prioritizing items for the data room – based on the buyer’s due diligence sequence – and keeping all parties aligned and on track.

The second sprint requires excellent responsiveness by the seller. As the buyer reviews data and conducts analysis, questions will arise. Immediately addressing these questions keeps the process on track and avoids raising concerns. This phase likely also includes site visits by the buyer and third parties for on-site financial and environmental reviews, and property appraisals. They should be scheduled and completed without delay.

The third and final due diligence sprint involves negotiating the final purchase contract and supporting schedules, exhibits, and agreements; also known as “turning documents.” The seller’s M&A attorney is key in this phase. This is not the time for a generalist attorney or one that specializes in litigation, patent law, family law, or corporate law, or happens to be a friend of the family. Skilled M&A attorneys, like medical specialists, specialize in successfully completing M&A transactions on behalf of their clients. Their familiarity with M&A contracts and supporting documents, market norms, and skill in selecting and negotiating the right deal points, is the best insurance for a seller seeking a clean transaction with lasting success.

 

Do you have an exit or growth strategy in place?

 

Phase IV: Post Sale – You’ve Got One Shot.

Whether a seller’s passion post-sale is continuing to grow the business, retire, travel, support charity, or a combination of these, once again, preparation is key. Unfortunately, many sellers don’t think about wealth management soon enough. A wealth advisor can and should provide input throughout the M&A process. Up front, they can assist in determining valuations needed to achieve the seller’s long-term goals. When negotiating offers and during due diligence, they encourage deal structures that optimize the seller’s cash flow and tax position. And post-close, sellers will greatly benefit from wealth management strategies, cash flow optimization, wealth transfer, investment strategies, and strategic philanthropy. Proper planning for post-sale success must start early and it takes time; and, it’s critical to have the right team of experienced professionals in place.

The M&A process is complex, it usually has huge implications for a seller and his or her company and family, and most sellers will only experience it once in a lifetime. Preparing in advance, building and leveraging the expertise of a dream team, and acting with a sense of urgency throughout the process will minimize risk, maximize the probability of a successful M&A transaction, and contribute to the seller’s success and satisfaction long after the
deal closes.

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Preparing for Due Diligence: Sell-Side

Due diligence is a buyer’s detailed investigation into the matters of your company in preparation for a possible sale transaction. For many business owners, this is one of the most dreaded parts of selling their business. After a letter of intent (LOI) is signed and a price range is agreed to, buyers have the right to dig into the business to ensure that they know what they are buying, and to identify any potential risks of owning the business. While buyers and sellers have different objectives and motives, both parties benefit from a thorough and efficient processes. Whether your company is pursuing a capital infusion or positioning itself for an acquisition by a strategic or financial buyer, due diligence is a critical component of every investment.  It’s an intrusive process and, like everything else about the sale of your business, you need to be prepared.

Ready to explore your exit and growth options?

When a potential buyer assesses your company, they will want to fully understand the essentials of the business such as organizational information, financial records, regulatory matters and litigation, employment and labor matters, and many others. When your company is well-prepared for the exit process, long before it is anticipated, not only will it make the company look more attractive to potential buyers but it will also maximize the value and expedite the transaction timeline. If not properly prepared, this can result in an incredible demand on a company and its resources, give a buyer the perception that the company is disorganized, and create operational difficulties within the company.

Below are four ways to prepare for due diligence and secure the deal you want:

Start with a Due Diligence Checklist

Most buyers will provide the target company with a due diligence checklist but, before receiving that list, sellers should ensure that common checklist items are available, up-to-date, accurate, and organized. The data needed for the due diligence process should be in order and ready to be uploaded to a virtual data room within a couple of days of initiating due diligence. This is not only necessary in the event of an acquisition, but it is also a valuable discipline to maintain as the company grows.

Invest in Professional Accounting Practices

The due diligence process is dependent upon the strength of the seller’s accounting system. It is essential that the company’s financial reports present potential buyers with a clear story, allowing them to fully evaluate the company’s earning potential. Buyers will be concerned with all of the target company’s historical financial statements and related financial metrics, as well as the reasonableness of the projections of its future performance. A business’ financial records should be clearly stated and easy to follow. If not, this could create confusion, misunderstanding, and devaluation.

Planned transactions have failed, even though the business itself was healthy and growing, when the financial reporting was outdated, inaccurate, or incomplete, and the buyer could not trust the data. Accurate financial statements are also necessary for the seller to support the business valuation. What assets does the business have? How profitable is the business? What is the working capital? What are the growth trends? All of these are major factors in the valuation of the business, so the data representing them needs to be accurate and precise.

To avoid issues, it is recommended that, before going to market, a seller contacts an independent accounting firm to review or audit the company’s financial statements. This will help to ensure that the company financial data is accurate and complete, will instill a sense of confidence from the buyer, and will more likely result in an efficient and successful due diligence process.

Engage Qualified Representation

A team of good professional advisors is crucial to a successful sale of a company. These advisors will steer sellers in terms of what they need to do to get their company ready for sale. Tap into these resources because they will have dealt with enough transactions to know what you should be focusing on to ensure a successful sale. Some recommended professional advisors include, but are not limited to, a M&A broker, an accountant, a tax advisor, a M&A lawyer, a wealth advisor, an investment banker, and a trusts and estate lawyer, if needed. With advance planning and the help of good advisors, a seller can ensure that his or her best interests are fully represented, common pitfalls are avoided, and the transaction will run smoothly and efficiently.

Responsiveness to Requests

During the due diligence process, potential buyers will seek to comprehensively understand the business practices behind a company’s earnings. It is the sellers job to guide the buyer through the learning curve. Respond to the buyer’s due diligence requests in an organized, detailed, and complete manner. If there are requests for missing data, respond punctually. This responsiveness allows the seller to gain credibility with a buyer, and provides buyers additional comfort with the quality of the business they are buying.

Conclusion

Due diligence is a vital and complex part of M&A transactions. Preparing beforehand can help a company position itself for higher valuations, stronger negotiations, and better outcomes. Understanding the importance of due diligence to both parties in a transaction, planning in advance, enlisting the support of specialists, and investing the time to run a thorough due diligence review early in a transaction will help prevent unwelcome surprises and potential liabilities for both parties.

Ready to explore your exit and growth options?

Author
Kayla Sullivan 
Associate
Benchmark International

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

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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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Benchmark International completes Sale of MC2, INC to Stark Holdings America, INC.

Benchmark International has successfully negotiated the sale of its client, MC2, Inc. ("MC2 ") to Stark Holdings America, Inc. ("Stark"), formerly known as Stark Technologies Group, Inc., a New York corporation. 

Based in Sanford, Florida, MC2 is recognized as Florida's automated control and security systems leader, with more than 20 years of on-site experience. MC2 has successfully evolved into a premier provider of engineered, state-of-the-art direct digital control, energy management systems, security access control, and closed circuit television systems, and lighting control for customers in both public and private sectors. 

Under President Roy G. Hoffman Jr.'s leadership, the company has successfully expanded and continues to increase its service footprint throughout the state of Florida. With a team of more than 50 knowledgeable engineers and technicians trained in a variety of automation and security systems, the company is prepared to deploy professionally designed systems to meet customers' specific needs. MC2' s flexibility allows the company to offer proprietary and non-proprietary systems, including integration services to third party systems, offering complete low voltage building solutions. 

Mr Hoffman stated, "While Benchmark was involved throughout the process, their assistance on getting extra value built into the deal after the acquirer's initial valuation was received really demonstrated their unique expertise and command of the process." 

 

Ready to explore your exit and growth options?

 

With more than 29 years in business, Stark is a North American provider of comprehensive intelligent building and energy management solutions. The company boasts over 250 employees and has been involved in projects across all 50 states, as well as 1 0 Canadian Provinces. While Stark continues to experience year-over-year revenue growth, the acquisition of MC2 provides Stark with an expanded geographic presence in the Florida market. 

"MC2 is a compelling addition to Stark's platform, and we are truly honored to have worked alongside the MC2 team toward this successful outcome", said Trevor Talkie, Senior Associate at Benchmark International. 

Leo VanderSchuur, Director at Benchmark International added, "Allowing both the seller and acquirer to prosper and benefit is always an ideal end result. On behalf of Benchmark International, I'd like to wish both parties the best of luck moving forward." 

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What if you’re a business owner in the process of transitioning your business or considering a transition? How do you handle it?

Picture this for a moment: you’re up to bat with two outs, two runners on base and the Florida Championship on the line.  Base hit up the middle scores one, possibly two, but if you pop up, ground out or strike out, it’s game over.

Is transformation important to your business?

If you could visualize yourself in that situation, chances are you’re feeling a little nervous.  Especially if you’ve never been there before.  What if you’re a business owner in the process of transitioning your business or considering a transition?  You’re up to bat with two outs and two runners on base – how do you handle it?  Ideally, we’d all like to confidently drill the first pitch deep into the outfield to win the game, but what happens when the thoughts and concerns about the transition and life after the transition get in the way?  Things might not work out as planned. 

In the decades of serving high net worth and ultra-high net worth individuals and families, our team has worked with many who have made their wealth through the sale of the family business. Many of them were faced with a number of overwhelming thoughts and feelings: stress, anxiety, frustration, confusion and worry.  Here are some of the questions we’ve often heard:

  • Will this wealth be enough to sustain me and my family? How do I know?
  • What about taxes? What’s the impact to me?
  • How in the world am I going to invest this money to serve me and my family?
  • What about my legacy and charity – how does all this fit in?

Finding the answers to these questions requires preparation.  Unfortunately, many business owners are unprepared to address the complex financial decisions that need to be made for both themselves and their families both before and after the sale.  Many would rather wait and leave the planning to another day.  But a lack of planning and preparation has killed deals that should have closed, broken up families, and, in rare occasions, landed business owners in the hospital due to stress.

At BNY Mellon Wealth Management, we follow a collaborative, holistic, team-based approach to each business owner and family that we serve.  Leveraging the strength and expertise of our global firm, we help provide clarity by working with business owners to implement:
Wealth transfer and tax mitigation strategies

  • Pre- and post-sale cash flow optimization
  • Pro forma net worth statements and estate flow projections
  • Custom post-transaction investment strategies
  • Family governance and next generation education plans
  • Strategic philanthropy

Proper planning takes time, and having the right team of experienced professionals is critical to success.  Armed with an experienced team who can assist with planning and preparation, you too can confidentially step up to the plate and win the game. 

Author:
Christopher Swink
Senior Wealth Director
BNY Mellon Wealth Management
T: +1 (813) 405 1223
E: christopher.swink@bnymellon.com
Visit the BNY Mellon Website

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Benchmark International, has facilitated the sale of Integrated Legacy Solutions, LLC (“ILS”) to NXTsoft, LLC (“NXTsoft”).

Benchmark International M&A specialist, Benchmark International, has facilitated the sale of Integrated Legacy Solutions, LLC (“ILS”) to NXTsoft, LLC (“NXTsoft”).

Based in Trussville, Alabama, ILS offers image and data conversion migration technology for the financial services industry. The company specializes in data management through one of three methods: full data conversion into a new system, data migration into its flagship OmniView Browser™ or a blended approach that combines the two.

NXTsoft, located in Birmingham, AL, is concentrated in risk management, including solutions in cybersecurity, compliance, and data analytics. Like ILS, several of NXTsoft’s portfolio companies also provide high quality software solutions serving financial institutions. NXTsoft is backed by a team with a 25-year track record of successful technology start-ups.

 

Ready to explore your exit and growth options?

 

ILS founder, Kris Bishop commented, “I would like to thank the Benchmark International team for their dedication and persistence. Their team and hands on approach provided excellent marketing documents, broad coverage across various types of prospective buyers, and resulted in multiple offers over the term of our engagement”

Leo VanderSchuur, Director at Benchmark International, stated, “It was a pleasure to represent ILS, Kris Bishop and Jason Alfano in this transaction. On behalf of Benchmark International, we are extremely pleased with the outcome. Allowing both the seller and acquirer to prosper and benefit is always an ideal end result.”

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Will 2019 Be the Year of the Family Office?

For the last decade, private equity players have held the driver’s seat in looking at, winning auctions for, and acquiring lower middle market businesses in the United States. But early results for 2019 indicate this trend may be at an end. The family office has come to the fore and appears poised to become the dominant bidder and buyer in this market.

Ready to explore your exit and growth options?

Family offices are similar to private equity funds in that they take a pool of money and invest it across a range of companies seeking diversification to mitigate risk. But what’s more important are the differences between the two buyer types. These include:

  • Private equity funds have mandatory exit time frames imposed by their organizational documents and their agreements with their investors. A typical private equity fund has a life of about ten years so it must buy, grow, and then resell all of its investments in that time frame. Family offices, on the other hand, typically have no time horizon for re-selling. They are more often “buy and hold” acquirers.

  • Private equity funds primarily invest “other people’s money”. Family offices invest their own money. While a family office will typically have a management team working for the capital provider and that has the appearance of a private equity-style management company, the management team’s relationships, compensation, career path, and rigidity of investment criteria are each vastly divergent from those of private equity funds.

  • Private equity funds operate under some limitations as to the breathe of their investments - a tech fund can’t buy farmland – but they do seek diversification in very broad terms within these limitations. Family offices tend to have a narrower focus. They hew close to the Warren Buffet mantra that investors should only buy stocks within their "circle of competence." A family office that has made money in landscaping is likely only to look at landscaping businesses and if the family made its money in commercial landscaping, to only look at commercial landscaping businesses. As a result, they tend to come across to Benchmark Internationals’ clients as more knowledgeable about their business.

  • Also owing to their tighter range of interest and the fact that they do not have outside investor to whom they owe fiduciary duties, they tend to move faster, perform less diligence, and produce shorter contracts. Over the last ten years, as multiple have increased, private equity funds and trade buyers have ratcheted up their due diligence to levels our clients find very painful. This is understandable as higher multiple mean more risks for these buyers. But family offices seem more comfortable with this heightened risk and rely on their expertise in the narrower industry to alleviate the risk other buyers reduce via diligence.

  • Family offices also tend to use less debt in their deals than do private equity funds. Perhaps as a result of this fact, or maybe not, they tend to use their existing debt facilities to provide the extra leverage needed to put in competitive bids. As a result, the lenders due diligence is either greatly reduced or eliminated from the acquisition process. This also increases the speed to close and reduced the stress for sellers. When a private equity fund, or even a typical trade buyer, sets up a new transaction, they also set up a new lending arrangement and the bank providing the debt sends in its own diligence team to investigate the deal and the company being acquired. Double the diligence, double the fun!

  • Because a family office’s money is coming from one source as opposed to many, they tend to seek out smaller opportunities than do private equity funds. There are some very small private equity funds these days and there are also some rather large family offices now. But in general, the managers at a family office are more accustomed to dealing with smaller business, more owner-operated businesses, and businesses with less data to share during the due diligence process. As a result, our clients often find them easier to work with and have more interest in working with them on an ongoing basis following the closing.

  • Private equity funds often have a mechanism in place to have their “deal costs” covered by third parties. Deal costs primarily consist of due diligence costs, legal fees, and travel. It is not uncommon to see a private equity funds deal costs amount to over 5% of the transaction value. Family offices, on the other hand, have no one to turn to for their deal costs. This has two favorable results for sellers. First, they spend less on the process, making it shorter and easier. Second, their certainty of close is higher. While private equity funds can somewhat mitigate the costs of a “blown deal,” family offices only have one pocket to pull from – their own (or, in other words, their boss’s personal pocket).

  • The characteristic that is probably self-evident by this point is the higher certainty of close. Family offices know the market batter, they have less bandwidth to use time inefficiently, they have more discretion, they are less reliant on banks, and they don’t want to waste their own money on blown deals. They are thus more cautious, put in fewer bids, and call things off much sooner than other buyer types. In short, if they are proceeding, they are more serious than they average buyer.

  • They are harder to find. They do not have to register with the SEC. There is no secret club they belong to.  They are too short-handed to attend many conferences. Many even enjoy anonymity and don’t even have websites.

Do you have an exit or growth strategy in place?

This last characteristic is what makes selling to family offices tricky. Any broker can produce a Rolodex of private equity funds. In fact, an impressive one could be produced from scratch in a matter of hours. Furthermore, because their focuses tend to be so narrow, the first 100 family offices in the Rolodex would probably not be a good fit for any given business but a similar list of private equity funds would probably produce a few interested buyers in most any growing business. A broker is either into the family office world or they are not. There is no break through moment in this regard. It requires years of dedicated effort to identify and establish relationships with these hidden gems. It requires dozens of researchers and outreach efforts.  It also requires having an inventory of businesses for sale that keeps these buyers interested. Brokers focused on larger deals and boutique brokers lacking global reach simply can’t devote the time and energy necessary to gain access to this strengthening pool of buyers. Only brokerages such as Benchmark International have the capability to do so and many of those with the capability have simply not made the effort.

Our family office relationships are continually growing and in 2019 these efforts have rewarded our clients handsomely.  Keep your eyes open. I bet you’ll soon start to see the Wall Street Journal talking about family offices and the rise of the family office.  When you do, remember that you heard it here first and Benchmark International is your gateway to those buyers.  

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Benchmark International has successfully facilitated the sale of Adapt Laser Systems, LLC and Teka North America, LLC to Boyne Capital Partners, LLC

Benchmark International has successfully facilitated the sale of Adapt Laser Systems, LLC and Teka North America, LLC to Boyne Capital Partners, LLC.

Headquartered in Kansas City, Missouri, Adapt Laser has supported North America since 2003, providing pioneering laser cleaning solutions to many bonding, corrosion, and surface treatment issues facing complex industrial processes. Adapt Laser, in partnership with CleanLASER, is the only supplier of fiber-coupled, compact, mobile or stationary laser cleaning units, with 20 to 1000 watts of laser power for a wide-range of handheld or automated applications. Illustrative uses include composite part tool cleaning, defense and military applications, oxide removal, paint & varnish removal, weld & joining pre-treatment, and mold cleaning. End-markets served include aerospace, automotive, defense, nuclear utilities, semiconductors, and food production

President of Adapt Laser Systems, Georg Heidelmann, stated, “Benchmark International was paramount to the success of our deal. Not only did Tyrus and the team at Benchmark demonstrate their expertise in all areas of M&A but they also took time to really understand my specific business and industry. Through Benchmark’s process a number of potential partners were identified which allowed me to select the group who truly aligned with Adapt’s people, culture, and vision for the future. I would like to thank the Benchmark transaction team for the extraordinary effort in making this deal a reality.”

 

Ready to explore your exit and growth options?

Boyne Capital is a Florida-based private equity firm focused on investments in lower middle market companies. Founded in 2006, Boyne has successfully invested in a broad range of industries, including healthcare services, consumer products, niche manufacturing, and business and financial services among others. Beyond financial resources, Boyne provides industry and operational expertise to its portfolio companies and partners with management to drive both company performance and growth. Boyne specializes in providing the capital necessary to fund corporate growth and facilitate owners and shareholders' partial or full exit.

Tyrus O’Neill, Managing Partner at Benchmark International, stated, “It was a pleasure to represent Georg and Adapt in this deal, and on behalf of Benchmark International, we are very pleased with the outcome. Both sides of the transaction were extremely professional throughout the process and it was a pleasure to work alongside Georg and the group at Boyne. The parties have numerous strategic synergies which has led to a great process and overall result. This has been a thoroughly satisfying experience and we wish both parties the best of luck moving forward.

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Strong M&A Activity Continues In Nashville For The Healthcare Industry

Since the early 70’s, Nashville has been considered a hub when it comes to the health care industry.  Nashville has developed and changed the landscape of the industry in the past 50 years.  The development of the community began with Hospital Corporation of America (HCA). Largely through hundreds of mergers, acquisitions and well as new companies, we’ve seen industry trends set in Nashville, as well as startups and spinoffs bringing different sectors of the industry to Nashville. 

Do you have an exit or growth strategy in place?

Before the Hospital Corporation of America, most hospitals were non-profit or affiliated to a religion.  In 1969, one year after inception, HCA became a publicly traded company.  This changed the landscape of the industry for good.  Through an abundance of M&A transactions, HCA now owns and operates more than 170 hospitals in 20 states across the country. In 1995, the Nashville Health Care Council was established, understanding the Nashville health care industry was responsible for $3.7bn in revenue at the time, while providing 53,000 jobs.  Today, the council reports $92bn in annual revenue generated, all while providing more than 570,000 people employed around the globe by healthcare companies based in Nashville.  There are over 900 companies that directly provide health care services, or are in some way involved in the industry.  These numbers are massive, and spurred a ripple effect around the country causing more private equity spending to focus into the industry.  This effect has led to eighteen publicly traded healthcare companies calling Nashville their home, while enticing more than $1bn in venture capital investments over the past decade.  The leaps and bounds made during the past 50 years are obvious, as the entire landscape of the industry has complete changed.  During 2006, Bain Capital, Kohlberg Kravis Roberts & Co. and Merrill Lynch completed a $33bn leveraged buy-out of HCA.  This was the largest leveraged buy-out to date and spurred an unprecedented amount of investment in the industry.  In 2011, HCA returned to the public market in the largest US private equity-backed IPO to date ($3.79bn raised).  HCA’s chain system business model was emulated by hundreds of not-for-profit hospitals throughout the country, and they are considered to be the trailblazer of the industry. 

The M&A landscape continues to change the healthcare industry to this day.  Through the first half of 2018, the healthcare sector saw deal value increase to $315bn, up from $154bn in the same period the previous year. The healthcare sector ranks third in terms of total deal value.  From a valuation perspective, healthcare M&A transactions were at an all time high in 2017.  A large driver within the space was within the senior housing and care marketplace. The number of announced transactions is on pace to set a new record, but the dollar amount of these deals will not exceed the record.  While this shows the hyperactive nature of the marketplace, these deals are occurring as smaller transactions rather than the mega-deals we’ve seen in the past.  This is a very attractive marketplace for sellers all things considered.  Private equity groups accounted for a large uptick in spending during Q4 of 2018. Financial buyers are notably optimistic about the healthcare market, with 120 total deals announced in the final quarter of 2018.  This bodes well for 2019 with 2018 in the rearview, healthcare continues to expand due to high valuations, a very large number of transactions, and an increasingly attractive marketplace. 

For the third year in a row, the number of small business transactions reached record numbers, as reported by BizBuySell.  Financial performances of the small businesses are increased year over year, as well. 49% of sellers said their businesses performed better in 2018 compared to 2017, and another 36% had similar figures comparably.  With financial performance increasing, the value of the transactions inevitably grew.  The medium asking price for small businesses in the US grew 10% from 2017, a clear indication that buyers are willing to pay more for businesses with a proven financial track record and promising futures. 

Author
Sean Ryan 
Analyst
Benchmark International
Ready to explore your exit and growth options?

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

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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.

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Benchmark International Successfully Facilitated the merger between Amtis, Inc. and Blackfish Federal, LLC.

Benchmark International has successfully facilitated the acquisition of AMTIS, Inc. by Blackfish Federal, LLC.

AMTIS, Inc. (AMTIS) is a diversified government service company providing leadership development, executive coaching, strategic planning facilitation, training development, business processing and professional services for multiple Federal government agencies.

BlackFish Federal, LLC (BlackFish), is an IT and healthcare solutions provider dedicated to helping solve its customers’ biggest business problems. Whether through applying innovative IT solutions or providing healthcare management support services, BlackFish consultants use their problem-solving skills to turn challenges into opportunities.

 

Ready to explore your exit and growth options?

 

Barbara Stankowski, President and owner of AMTIS said “The sale of my company was an extremely lengthy and taxing process. Throughout the entire sales effort, the Benchmark team was very professional, responsive and kept their eye on the end goal, allowing me to continue running my business. I would highly recommend Benchmark to any small to mid-size business owner that is considering the sale or merger of their firm. I am excited for the AMTIS employees, and all of our customers who will remain in qualified and capable hands with BlackFish leadership team now behind the wheel.”

“We’re very pleased to have recently completed the acquisition of AMTIS. Together, BlackFish and AMTIS create a strong strategic fit that will provide our customers a fully integrated leadership and professional services organization. Our overlap in customer base and services offered, accompanied by AMTIS' experienced management team and operational staff will create a seamless transition for each of AMTIS’ existing clients.” said Donald Jones, CEO of BlackFish.

Benchmark International Associate Director David Steverson stated, “We would like to congratulate AMTIS, Inc. and Barbara Stankowski, as well as the buyer, BlackFish Federal. This acquisition was disrupted by a number of external forces, including a partial government shutdown, but ultimately concluded with a completed transaction. Special thanks goes to the various specialists working on both sides of the transaction beyond Benchmark: Shuffield Lowman, PilieroMazza, Genaesis, and McMahon Welch and Learned.”

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Benchmark International Successfully Facilitated The Acquisition of Jackson Galloway Associates LLC. by FGM Architects, Inc

Benchmark International has successfully facilitated the acquisition of Jackson Galloway Associates, LLC to FGM Architects, Inc. Benchmark International worked effectively with the sellers to ensure that their goals were met from a financials as well as cultural perspective.

Jackson Galloway Associates, LLC is a highly-reputable firm that provides full-service architecture and interior design for the Texas market.  The majority of their clients are churches, public and private schools, athletic facilities and non-profit organizations in the Texas market with a high focus in Austin, one of the fastest growing cities in the country.

FGM Architects is a professional service firm with an emphasis on design and service.  Since 1945, FGM Architects has specialized in the planning and design of environments for PK-12 Education, High Education, Municipal and Federal clients. They offer a unique combination of experience, talent and a collaborative design process.

 

Ready to explore your exit and growth options?

 

Benchmark International was able to procure for Jackson Galloway Associates a buyer that met their goals in regards to financial terms as well as cultural fit and an aligned vision in regards to their design capabilities.  Benchmark International represented the sellers for over two years in a diligent effort to find the ideal buyer.

According to John Jackson, AIA, now Managing Director of the Austin Office of Jackson Galloway FGM Architects “'Our transition was assisted by the personal and professional team at Benchmark, International, who walked us through every step and helped us to stay on task to the very end.”

Benchmark International’s Senior Associate, J.P. Santos, commented “The Benchmark International team is very happy for John Jackson, Bob Galloway and the entire Jackson Galloway Associates team.  From the outset, the shared vision in terms of design and corporate culture between Jackson Galloway Associates and FGM was apparent and was helpful in coming to equitable terms.  Both parties were collaborative in their efforts to bring this deal together and we are excited to see what the combined firms can do going forward.”

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Top Mistakes to Avoid When Selling

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

Only Pursuing the Largest Acquirer

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

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

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

 

Ready to explore your exit and growth options?

 

Not Looking at the Bigger Picture

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

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

Not Creating Competitive Tension

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

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

Using an M&A Sector Specialist

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

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

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

Leaving it Too Long

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

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

Neglecting the Day-to-Day Running of the Business

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

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

Not Negotiating Effectively at Critical Stages

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

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

Author:
Lee Ritchie
Senior Director
Benchmark International

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

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Taking Your Business to the Next Level

The art of starting a small business is a craft to which not every business person is well suited. It involves countless late nights, blood, sweat and tears, to turn an idea into a thriving small business. But, you’ve done that.  You’ve successfully turned a one-bedroom or small machine shop, and spark of inspiration, into a community staple with a name that will outlast your time in business.  But, you’ve also reached a point where your talents have been exhausted. And, you’re not sure what the next step is in taking your business to the next level.  Once again you have an idea, but this time you need outside help to turn that vision into a reality.

Many businesses reach this point at which they feel that they are unable to further increase the scope of their operations.  They find themselves turning away business or not able to expand into new and lucrative markets.  Perhaps, what is holding you back, it is a lack of cash on hand, or a deficit in managerial expertise.   Whatever the reason, bringing on additional investors is a key, and proven strategy through which a business is capable of gaining an infusion of needed capital and knowledgeable partners capable of taking a company to the next level.

Your passion is your business, and your clients have come to cherish your services.  Bringing in new partners with an influx of capital is an excellent way for you to continue doing what you love while growing your company’s client base and expanding the services you offer.  New partners may sound like dirty words you never thought you’d speak.  You might think of new partners as greedy investors who will come in and milk your business dry without care for the name brand and quality you are known for. 

That’s not always the case, and that’s where we at Benchmark International come in.  You can rest assured that Benchmark International will help you find new partners that care about your business as much as you do. Partners who can bring the capital and experience you need in order to keep your business growing and thriving. These new partners could bring in experience in managing larger organizations, or experience in advertising a small business to a new market, they might even have connections to customers who could grow your client base.

In engaging Benchmark International, you can expect our deal preparation and transaction teams to present your business to the market and find the perfect fit to take your business to the next level.  First, our deal preparation team will delicately craft marketing materials which accurately reflect the successes of your business and its potential for growth. After your approval of the marketing materials, the deal transaction team will take over and bring your company to the market.  Whether a trade buyer or a fellow competitor, the team will work tirelessly to find the right partner to help you grow your business.  This will ensure, that you take your business to the next level, without losing the heart of the business you painstakingly grew from an idea into a name synonymous with quality.

The process of staying onboard after a sale of your business or an injection of new capital is typically referred to as an elevator deal.  For more information on how elevator deals function, please see.

Author:
Patrick Seaworth
Senior Associate
Benchmark International

T:   +1 (512) 861 3314
E: Seaworth@benchmarkcorporate.com

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I Want to Sell My Business.  But How Can I Be Sure My Employees Are Taken Care Of?

As an owner of a business, there are often times when the employees of the business can become like an extension of the owner’s family.  Employees are often present during challenging times in the business owners professional and personal life and the owners of the business can often be a stabilizing presence in an employee’s life.  One of the biggest concerns of a business owner is what the welfare of their employees will be upon a successful sale of the business. Often times, the concerns can be placed into four broad buckets,

1.) Will the employees be keeping their jobs?

2.) Will the employees be keeping their same level of compensation?

3.) How will the insurance benefits change, if at all?

4.) How will our company culture change – do we still have team building events planned every    quarter and holiday bonuses we can count on?

The answers to these questions can go a long way in determining whether a buyer is the perfect fit for a business, outside of the fundamental valuation and transaction structure.  Mergers and acquisitions are complicated endeavors, involving an incredible amount of work and attention to detail.  While in the midst of an acquisition, HR Departments are the group tasked with managing perhaps the most valuable part of a company – the human capital.  Granted, some aspects of the transaction are unavoidable, including the letting go of employees in an underperforming division or in a role that will be redundant within the acquirer’s organization.  But, if both buyer and seller can get on the same page and formulate a plan for informing the employees of a change, this will ease the transition and mitigate the fear of the unknown. 

Now, to address the first question that will come to an employee’s mind upon finding out their firm is being acquired – am I going to keep my job?  In the vast majority of transactions, employees will retain their roles and often times an acquisition can be an opportunity for upward mobility within a larger organization.  Timing will be of the utmost importance when it comes to making any type of announcement regarding an employee’s employment status, whether positive or negative. One hurdle to avoid at all costs is raising alarms unnecessarily.  In order to avoid this complication, it’s best to announce a merger or acquisition upon execution of a Definitive Purchase Agreement and the transfer of funds. This ensures that the deal is closed and official and will eliminate the risk of pulling the rug out from under the employees of a recently acquired company.  

When the topic of compensation arises, there are numerous factors at play, including the performance of both the buyer, seller and individual employee as well as the defined compensation structure that already exists within the buyer’s corporate infrastructure.  Having a discussion regarding compensation can also take a different tone – perhaps a buyer can offer employees a more compelling work/life balance, an office space that offers the opportunity to exercise, eat healthy or be in a location that is convenient and offers easy access to post office hours entertainment.  Being able to pitch potential employees on all of the value that a buyer offers aside from the number on their paycheck can help bridge any perceived gaps
in compensation.

Beyond the importance of staying employed and maintaining the current level of earnings, individual employees will also be concerned with their benefits package and whether the buyer offers a more compelling insurance package or one that could be considered a down grade.  In any event, being completely transparent about the pros and cons of the new benefits package will be important in mitigating the fear associated with change.  A buyer who makes themselves available to answer questions that are both qualitative and quantitative in nature will be able to ensure a smoother transition.  This would include providing feedback mechanisms such as one-on-one interviews, focus groups and anonymous surveys.  In most cases, there is not a need to turn everything upside down immediately – buyers should not expect for all the new employees to join their new health insurance plan immediately, buyers should also consider letting the new employees keep their old PTO until the end of the year, if a new employees has already reserved PTO, a buyer can still honor that time and garner a little morale. 

 Ultimately, communication will be key - giving employees an opportunity to feel seen and heard will give them the sense of feeling valued by their new employers.  Additionally, this will bring a level of comfort to the seller that those individuals who helped them achieve success will continue to be taken care of and that the culture of a company that takes years to create will remain intact and continue to permeate throughout the new company.

Author:
JP Santos
Senior Associate
Benchmark International

T:   +1 (512) 861 3309
E: Santos@benchmarkcorporate.com

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