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April 2024
There are reasons for optimism in the 2024 M&A market.
Net working capital (“NWC”) is one of the most complex, but critical components of an M&A transaction.
When it comes to the M&A process, pre-sale preparation can significantly enhance valuation and the chances of success. Ideally, pre-sale preparation begins years before the owner intends to sell the business.
Owners of a company are exploring a sale. They have hired an investment bank to market the company and are at the point in the process where offers are due.
Most business owners have either heard of or are familiar with EBITDA. EBITDA is commonly used as a proxy for free cash flow and therefore most often serves as the valuation basis in a transaction.
Our firm has decades of experience advising middle market M&A transactions, and while the basic process of executing a deal has remained the same, there have been changes in the market that have dramatically changed how we execute.
M&A volume and valuations have moved closer to reality in recent months, but the capital available to execute M&A transactions remains elevated.
When it comes to M&A, company valuations are commonly derived by a buyer assigning a multiple of EBITDA that they are willing to pay for that company.
Buyers and sellers can deploy a myriad of creative methods in a deal structure to help finalize negotiations and get a deal across the finish line.
Numerous complexities arise throughout the M&A process.
We have heard for several months now about how inflation has caused a general uneasy feeling and required businesses to pass higher prices on to consumers, ultimately impacting consumer spending.
An M&A transaction is typically structured one of two ways: the sale and purchase of the company’s assets, or the sale and purchase of the company’s stock.
A vast, motivated and diverse buyer universe is what helps set the stage for a highly competitive M&A process.
Among the first questions that a business owner asks when beginning to contemplate a sale transaction is around the appropriate EV/EBITDA multiple that can be expected in order to estimate valuation.
Have you been approached by a buyer with an unsolicited offer to acquire your business?
Choosing to go down the path of mergers and acquisitions is a big decision for any business owner.
One of the biggest decisions a business owner will make during their ownership is executing on strategic alternatives such as selling, raising institutional capital or acquiring another business.