In many cases, the sale of a small company is “event” driven. That is, the reason for sale is health, divorce, partnership issues, even decline in business. A challenging reason is one in which the owners want to retire and live happily ever after. Here is the problem:
The owners have a very prosperous distribution business. They, unfortunately, are the embodiment of a value-enhanced business...Read More
Business Appraisers, before beginning an assignment, like to know the purpose of the appraisal. Usually the assignment demands “bullet proof” documentation: comparables, EBITDA multiples, projections, discount rates, etc. Unfortunately, in situations where the purpose of the valuation is to establish a selling price, the business appraiser really doesn’t understand the business elements –...Read More
A buyer was interested in a building products manufacturer that did $70 million a year in sales. Although the business was profitable, it seemed that their margins were lower than they should have been for this industry. The buyer asked the seller how they priced their products. As the seller was explaining his pricing strategies, he happened to mention that a price increase of 1.5 percent...Read More
There once was a family-owned bakery that had sales in the millions. The bakery sold bread to restaurants, supermarkets and some retail outlets. The founder gave each of his 5 children 20 percent ownership of the business. The kids really didn’t want to work in the business, so they turned the operation and management over to 2 members of the third generation. For some years the business...Read More
Much has been written about “fairness opinions” due to the financial manipulations among companies such as Enron, Tyco and others. The conflict in the use of fairness opinions was (and is) that an investment banking firm not only handled the sale of a company, but also got paid for doing a fairness opinion. For example, when the Bank of America decided to buy Boston’s Fleet bank, B of A...Read More
