Insights Into a Business Sale or Merger

 

Investment team advisor manages a sale or merger
What is an Investment Banker and How are Fees Earned?

An investment banker is a firm of professionals who represents a business owner or CEO in the sale or merger of the seller’s business. ABI investment bankers have gained previous work experience in large international, national or regional firms. Our fees are earned when services are completed, unless transactions are complex or other arrangements are contracted.

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Thought of the future
What Signs Tell You It's Time to Sell Your Business?

Here is some food for thought: fifty years ago, the business world included Eastman Kodak, Pan Am, Penn Central and may other giants. Although some components survived, none made it. All because they failed to UPDATE personnel, products, equipment, etc. In short they waited far too long.

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Entrepreneur evaluating decision to sell
Why Should I Sell My Business?

Most business founders spend significant time building their companies inspired by personal and financial motives. The business becomes an extension of their identity with emotional ties. The time to sell is before they become too bored, tired, have ill health, are unable or unwilling to invest more money, overwhelmed or finally have adequate wealth. Never leave the company for family members to sell your company. No one is able to explain or understand the company and its value better than you.

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Time horizon to sell a business
When is the Best Time to Sell My Business?

The Straight Forward Answer: Ideally, an owner decides to sell when the business is performing well, a high value can be obtained by selling now, or there is a desire to pursue other passions or reap the benefits of years of hard work. Sell on the upside of the bell curve and not at the peak or down side, unless you waited too long and have no choice.

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The time frame for closing a deal
How Long Will It Take to Sell My Business?

Typically, completing a business sale may require 6 to 9 months. The actual length of time required depends on the size and complexity of the transaction, seller terms required, the seller’s ability to provide information in a timely manner, and a multitude of other factors.

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Business factors that influence a sale
What Factors Result in a Buyer Paying More for a Company?

Two primary factors are: (1.) Size or the company selling, history, profit, management, growth rate and industry. (2.) Critically dependent upon the bankers’ history, experience, sale process, ability to identify all components of the sellers’ value, the banker’s buyer prospects database and persistence. Value drivers presented by the banker significantly influence the value a buyer will pay for a business, whether they are real, perceived or projected by the banker.

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Understanding if acquisition increases your financial value.
Should I Grow Through Acquisition to Increase the Value of My Business?

Growth by acquiring another company is viable, however very difficult and complex. If the current management and personnel team completing the acquisition are not up to the task and very well financed, problems could arise early in the process. Consider utilizing a banker such as ABI to conduct a review of the potential for your success.

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Analyzing opportunity to sell
Opportunities for an Owner to Personally Sell or Recapitalize Their Business

History states that business owners do not receive good value for the sale of their business and are actually successful at selling less than 5% of the time. Recapitalizing from a known bank is most likely easiest and offers highest potential for success. An owner selling or recapitalizing their company typically fails due to limited access with the universe of business buyers and investors. Strongly consider utilizing a Senior M&A firm to conduct a valuation or review your potential for success.

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