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When selling your business, price isn’t the only thing that matters—how you get paid is just as important. In the lower middle market, deals are often structured with equity rollovers, earnouts, or a mix of both. Understanding these options can help you maximize value while minimizing risk. What Is an Equity Rollover? In an equity…
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Jane Marlowe, Senior M&A Advisor, BMI Mergers & Acquisitions Good news: the service sector, particularly businesses with inelastic demand profiles like facilities management, field services, and healthcare, is anticipated to see increased M&A activity due to announced U.S. tariffs. With lower tariff exposure compared to manufacturing, these businesses are becoming increasingly attractive targets, potentially commanding…
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An estimated 10,000 business intermediaries operate across the U.S., helping business owners sell their companies under various titles such as Business Broker or Investment Banker. As advisors in the lower middle market, we have been referred to as business brokers, advisors, and investment bankers by our clients and their attorneys and accountants, highlighting how these…
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Often, purchase price allocation is viewed as “something the accountants do” and is one of the last items discussed before closing the sale of a business. However, this is a mistake, as purchase price allocation (PPA) can significantly impact the value received and influence the negotiation strategy, as well as the future relationship between the…
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With over 20 years in M&A, I’ve seen the popularity of seller financing shift in response to economic conditions. Recently, with rising interest rates and cautious lending practices, seller notes have become more common. But what exactly are seller notes, and how should you approach them? Seller financing, or a “seller note,” is where the…
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How much a business owner keeps from the sale of their company is a key question, and taxes are the primary factor. Below is a high-level overview of the major tax considerations applicable to most business sales.
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GF Data® reported on the Distribution business acquisition deal data for YTD December 2023 and while valuations are holding steady, deal volume is down 25-30% vs 2022. The decline in volume is not surprising, given the high cost of debt. However, the fact that valuations appear to be holding steady is, on the surface, surprising.…
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Key Considerations for Improving Value When Preparing to Sell Your Business Deciding to sell your business is one of the most important decisions you’ll ever make as a business owner. It represents the culmination of your hard work and dedication. As you approach this significant milestone, several key factors require careful consideration. The goal is…
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EBITDA multiples are sometimes used to determine approximate business value in a sale transaction. Multiples can vary widely by industry and within industry segments. In recent years, we have also seen more higher end deals with multiples of 7 to 8 times EBITDA. The data tells us only premium quality businesses are achieving extraordinary valuations…
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The backlog of profitable jobs is a critical factor in determining the valuation of a construction business. While a company’s value is derived from various factors, such as financial performance and assets, a contractor with little work on its backlog is not attractive to potential buyers. The absence of a healthy backlog can lead to…
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Despite the economic headwinds of higher interest rates and inflation, the construction sector continues to see steady merger & acquisition activity. Construction companies tend to sell for 3.5x to 7x EBITDA depending on the company’s size and other qualitative factors which can often be improved prior to selling. Here are ten actions an owner can…
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Merger and Acquisition activity in the semiconductor industry is currently mixed due to regulatory and supply issues. While some companies are looking to acquire competitors to increase their market share and technological capabilities, others are holding off due to concerns about regulatory scrutiny and uncertainty around global supply chains.
