Prioritizing client education to empower decision makers throughout their transaction

Watch time: 7 minutes

A letter of intent (LOI) is often among the first documents negotiated in an M&A deal, and for good reason. The LOI declares a commitment between the buyer and the seller to enter a transaction, and it outlines the key terms of the transaction agreement. By defining binding and nonbinding terms of the agreement, the LOI provides protection to all parties involved.

Watch time: 8 minutes

When you decide to sell your business, you and the buyer will need to agree on a way to structure the sale — either as an asset sale or a stock sale. But because you’ll have competing interests, what’s good for the buyer may not necessarily work for you. Understanding the differences in how asset and stock sales are structured is key to ensuring you benefit optimally from the transaction.

As a business owner, you know debt can provide an effective, low-cost solution to financing business operations. The tax deductions allowed on interest expense are an added benefit, lowering the capital cost even further. Adding debt to your capital structure also boosts your return on equity. There are different types of debt, and each has its pros and cons. Additionally, each type of debt has different rights in the business’s capital structure and serves diverse purposes. Here, we’ll look at two common types of debt financing.

Strategic buyers are often willing to pay more than what financial buyers will pay due to the synergies generated in the transaction. Synergies are often a contributing factor driving strategic buyers to make acquisitions. As a business owner, it is important to understand how strategic buyers analyze synergies and how that impacts what they are willing to pay.

One of the most important steps in a sell-side transaction process is for potential buyers to meet the sellers and visit the business in person. It is hard to imagine someone buying a new home without seeing it in person; similarly, any serious buyer will need to meet the management team and see the facilities before acquiring the business.

Once you have identified a buyer and determined the purchase price for your company, it is time to negotiate the terms and conditions of the sale. These items are outlined in the purchase agreement, the primary legal document in any sale process.

A minority transaction offers you as a business owner a solution for reducing debt while maintaining control. This helps if your company is facing cash flow issues and drowning in debt. Principal and interest payments that used to be easily covered by annual cash flows are becoming more difficult to service. You can cut costs in other areas of the business, but your debt obligations are unavoidable. A minority equity sale can solve the cash flow problem without having to sell the entire business.

The decision to sell your business is an emotional one — after all, you built it; this is your “baby.” Add in crucial factors such as the state of the economy, your health, and your financial well-being, and you face a challenging decision. You weathered the Great Recession, and now you’re in the midst of coping with the COVID-19 pandemic; is this the right time to sell? The good news is that the right advisors can make this decision much easier.

The COVID-19 pandemic has caused chaos throughout the US economy and has threatened the future of many businesses. Owners, CEOs, and executive teams are scrambling to navigate this unprecedented period of uncertainty. As businesses begin to reopen, companies must implement survival strategies to weather a potentially lengthy recovery and potential effects from recurrences of the pandemic.

You’ve probably heard the term 'EBITDA' but might not know exactly what it means.  What is it? What is it used for? And How do you calculate it? You’ll be able to answer these questions by the end of this video.

Watch time: Less than 8 minutes