BMI Insights & News
Insights
Practical perspective for owners of privately held companies on value, buyers, preparation, and what to expect in a sale.
ROWC: An Effective Tool to Measure Financial Strength and Valuation for Electrical/Electronic Distributors
Buyers typically utilize a historical multiple of EBITDA to arrive at a valuation for an electronic distributor. However, a positive operating income on the Income Statement does not guarantee a high business value. A distributor’s business might look profitable (positive operating income) but may not be financially strong if cash is tied up mostly in…
Ten Factors Determining Business Value in a Sale
Business valuations in a sale are based on the interactions of several important factors. We have outlined the ten key factors to consider. Cash flow is the primary determinant of business value, but the other factors noted can make or break a successful transaction. The type and circumstance of different buyers will lead to varying…
Methods of Valuation when Selling a Business
Valuing a privately held business can seem daunting when you consider all of the possible methods of a company valuation. Outlined below we briefly discuss the most common types and which are most appropriate when selling a business in the market. The valuation of a business includes financial calculations, but other factors are also important…
Acquisitions to Continue for Electrical Wholesale Industry
Valuations Exceed the Average for all Sectors Summary: The Electrical Wholesaling industry is highly fragmented and set for increased mergers and acquisitions as companies look for continued growth. Companies of all sizes will be potential targets, especially those with desirable product lines and advantageous locations. Electrical Wholesaling is an industry that serves the electrical equipment…
Mergers & Acquisitions: Who are the Buyers?
Often when business owners decide to sell their business, the first type of buyer they consider are their competitors. This makes sense since competitors already know the business and industry, and they often have the most to gain from the purchase. However, competitors are not your only choice and too often they are not the…
Reducing Environmental Risk
Preparing to Sell Your Business: Tips For Reducing Environmental Risk (Based in part on excerpts from Brownfield Science & Technology, Inc.) Environmental issues can derail a transaction and seriously impact value unless business owners take a proactive approach. Buyers and their lenders will conduct environmental due diligence so it is imperative that sellers plan ahead…