Acquisitions and Management Buyouts

The Management Buyout alternative provides the business owner with a unique method of divesting with a minimum of disruption to the business. The business does not have to be exposed to the selling process and due diligence activities are minimized as the acquirer generally knows more about the risks and opportunities of the business than the seller. Often a significant portion of the goodwill of the business potentially “belongs” to key sales or technical managers.

Business Acquisitions are often a better business strategy than taking the time/risks to grow a business.

Finding and purchasing a business may include the following steps;

  1. Define objectives and develop acquisition strategy and criteria.
  2. Determine appropriate sources of capital to finance the transaction.
  3. Market research and identifying potential buyer candidates and ranking of candidates.
  4. Initial contact with buyer candidates and obtaining information from Company, confidentiality agreements and obtaining data from other sources.
  5. Initial target company analysis and ranking of targets according to criteria and fit.
  6. Obtaining detailed confidential information and letters of expression of interest.
  7. Determining a value range of the business, necessary deal terms and necessary due diligence checks related to value range analysis.
  8. Preparation of preliminary integration plan, and assessing accounting, tax, tax planning, finance, and corporate personnel issues.
  9. Preparation of letter of intent and negotiations and final selection of buyer candidate ranking, exclusivity agreement.
  10. Determine applicable due diligence and assist with due diligence management.
  11. Obtaining financing capital and development of integration plan.
  12. Converting the letter of intent into a legal document.
  13. Final review of transaction to ensure it meets the original objectives and goals, as negotiated. Does this transaction make sense to do?
  14. Closing the transaction

Acquisition/Management Buyout Assistance

We are often engaged to act as a quarterback organizing the Acquisition plan with the client/business owner and direct the client’s and our own technical staff to complete the various steps.

We can provide specific assistance related to the following steps:

  1. Consulting about developing objectives, an acquisition strategy and criteria.
  2. Assistance in determining appropriate financing and providing information to financers in order to obtain working capital financing, long-term debt financing, mezzanine financing, vendor financing and equity financing. You benefit from our experience.
  3. Perform detailed Industry market research related to suitable candidates, obtaining background information on each potential candidate and ranking the candidates according to criteria. We often discuss the results with management in order to select the most suitable potential acquisition candidates.
  4. We often perform the initial buyer contact, arranging the confidentiality agreement and obtaining initial information including management interviews and plant visits.
  5. Providing advice regarding the value of potential acquisition candidates and ranking these candidates according to fit and other criteria
  6. We provide assistance in designing detailed requests for information, receipt of information and providing advice related to preparing letters of expression of interest. We can draw on our experience with similar circumstances.
  7. We can provide a detailed value range of the business under various scenarios, necessary deal terms and necessary due diligence checks related to value range analysis. We can provide assistance with structuring the transaction, identification of alternate structures and evaluation of income tax and HST ramifications.
  8. We can assist in review of integration plans and co-ordinating consulting assistance with accounting, tax, finance, and corporate personnel issues.
  9. We can assist with preparation of letter of intent and negotiations and liaison with corporate lawyers. We can draw on our experience with similar circumstances. We can assist in explaining the effects of certain terms in the letter of intent.
  10. Assistance with design of due diligence procedures and follow up of results compared to letter of intent terms.
  11. We can assist with designing the capital plan to finance the business, contacting interested banks and specialty lenders. We can assist with preparing information documents to various sources of financing including structuring. We can assist with review and comparison and negotiation of offers to finance and selecting, the best deal in the circumstances, banks, mezzanine financers to use. We can review the final integration plan and offer our comments based on our knowledge of the deal and parent business. We can review the final financial budget with assumptions and sensitivity analysis.
  12. Assistance with converting the letter of intent into a legal document and watching for slight changes in deal terms that can have a significant effect on the value of the business and its anticipated return on investment.
  13. We can provide an objective final review of the acquisition project before closing to help make sure it meets the original objectives and goals.
  14. We can provide assistance with information support for closing documents.

The Deep Research Method™

We created The Deep Research Method™ in order to get better results for our clients.

  • The Deep Research Method™ is a multi-stage process that uses advanced investigation techniques and market research to dig deeply into the facts.
  • For each potential acquisition assignment, we perform a detailed analysis of what makes this business most attractive to you and also to the various competing buyer groups we have identified and assess the best way to present your information to the prospective sellers.
  • For each potential acquisition assignment, we consider stand-alone value, value creation opportunities, investment value to strategic buyers and linking your strategic planning to building value.
  • For each assignment, we perform industry research to determine unique industry factors and whether it is a good time to invest or not. We consider the current economy and expected future economy and how it effects your business and industry.
  • We consider each assignment a unique opportunity to create exceptional value for our client and the buyer.
  • We utilize the Value Builder System™ to properly assess 8 different value drivers of the prospective business investment compared to similar size businesses in your unique industry.
  • For each potential acquisition assignment, we assess the reasonableness and risks of an integration/ transition strategy into your operations, we assess potential negative customer/supplier/employee reactions and how to address these issues, we assess potential first-year negative synergies, we assess adequacy of due diligence and we review what other factors need to be considered

Contact Us Today

Call us today to learn more about how to attract the right potential buyers and present your business in a manner that maximizes the return from its sale. We would be pleased to meet with you to determine how to sell your business successfully.

Phone 905-528-4446 or contact us to arrange a meeting