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Adding Success Fees to Starting the Exit Planning Conversation

NACVA/CTI BVFLS Conference Presentation Summary This article is a review of a session involving exit planning that was covered in a highly interactive, standing-room-only session from the NACVA/CTI BVFLS Conference in Fort Lauderdale, FL on December 14, 2023. This article is a review of the topics covered in the highly interactive, standing-room-only session from the NACVA/CTI BVFLS Conference in Fort Laude ...

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Business Owner Exit Planning Engagement Tools

More Than Just a Conversation What tools are available to assess an owner’s readiness to exit a business? What process exists to enable professionals to assist an owner with exit planning? This article is based on three tools presented and discussed at NACVA and the CTI’s July 2023 Business Valuation and Financial Litigation Super Conference. Those three tools are the Business Exit Readiness Index (BERI), t ...

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Is Non-Traditional Debt Financing Right for You?

A Five-Step Process to Secure Debt Refinancing For anyone dealing with a company that has a troubled balance sheet, maintaining cash flow is critical to determining an optimal go-forward approach. In many cases, the go-forward involves a transaction such as a merger or sale. But, to get to that point, a stressed or distressed company must maintain the liquidity it needs to continue running the business whil ...

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Updates in the Exit Planning Market

Third Quarter 2022 2021 was a significant year for business owners who chose to exit via a sale of their privately held businesses. The government’s response to the COVID-19 pandemic pumped billions of dollars into the economy, helping to drive a robust mergers and acquisitions market led by aging baby boomers preparing to retire and concerned about the prospect that the Biden administration was potentially ...

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How Selling a Business is Like Running a Half Marathon

Getting to the Finish Line is Exhausting In this article, the author analogizes the sale of a business to how one prepares and runs a half marathon. Many business owners may treat an exit as a half marathon, but that is a mistake. Business owners need professional consultants to assist them with their exit plan and negotiations. The author shares his views on the negotiation process and stresses that busine ...

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Outrunning Inflation to Achieve a Successful Exit in 2022

Rising Levels of High Mental Readiness for an Exit Business owners often-times see exit planning as a complicated, overwhelming, and emotional process. Accordingly, few owners adequately prepare for this significant event. However, an exit plan is essential to help business owners manage the illiquid wealth in their businesses, particularly in turbulent times such as these marked by strife that is present i ...

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Analyst’s Noncompete Agreement Considerations in Corporate Acquisitions

(Part I of II) This is a two-part article that focuses on the situation where the target company is a private corporation, and the sellers are employee/shareholders. This discussion summarizes the taxation and valuation considerations related to a transaction where employee/shareholders are selling the private C corporation stock to a C corporation acquirer. Some of the taxation and valuation considerations ...

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How to Maximize Sale Value When Selling a Company

Key Actions to Undertake to Increase the Price of a Company This article provides a brief overview covering what the author—a middle market investment banker—believes is the most worthwhile and impactful actions that anyone contemplating the sale of their business can take right now to set themselves up for success in a future transaction process. The author recommends that prospective sellers and their adv ...

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To Exit a Business for Millions, Begin with the End in Mind

Get Acquired for Millions—A Roadmap for Technology Services Providers to Maximize Company Value What should a technology service professional know to sell his or her company for millions. In this book review, Michael Pakter discusses Linda Rose’s Get Acquired for Millions—A Roadmap for Technology Services Providers to Maximize Company Value. Entrepreneurs aspiring to end up selling their businesses for mill ...

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The Ticking Clock

The Future of Main Street Business Succession In 2001, veteran investment banker, Peter Christman, first identified the need for a holistic approach to preparing owners of midmarket businesses for sale and/or exit. He set about writing a book to address this. At the time, the first Baby Boomer was 56 years of age. Those Baby Boomers are now not so young. In this article, the author shares his impression of ...

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Financial Advisory Services

And S Corporation Acquisitions Analysts should be aware that one transaction tax structure that is particularly popular regarding private equity firm acquisitions is an Internal Revenue Code Section 368(a)(1)(F) reorganization of the private S corporation. The article discusses several of the reasons why owners may want to sell—and why private equity firms may want to buy—an S corporation target company. Th ...

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Delaware Chancellor Rejects “Apples-to-Oranges” Damages Analysis

Dieckman v. Regency GP LP et al. This article discusses Dieckman v. Regency GP, LP, a recent Delaware Chancery Court decision. It is a reminder for valuation professionals providing damages testimony to be wary when mixing the use of the market approach and income approach when estimating damages in situations where multiple entities are involved. For example, using the income approach in valuing the allege ...

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Analyst Considerations in the Valuation

of a Tax Loss Target Company Acquisition This article summarizes the factors that acquirers—and their valuation and other financial advisers—should consider when structuring an M&A transaction that involves a target corporation with such income tax attributes. Introduction Valuation analysts and other financial advisers (collectively, analysts) are often retained to advise acquisitive clients with regar ...

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Anatomy of Saving a Business

Put on the Gloves, Speak Bluntly, and Devise a Plan to Emerge from Chaos The author shares the trials and tribulations involving a troubled company that was on the verge of closing and managed to recover. In this engagement, he took the lead, coordinated and assigned roles within the company, negotiated with the IRS Revenue Officer, had difficult conversations with bank (a potential deal breaker), and was c ...

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Representation and Warranty Insurance

Understanding the Claims Process and Anticipating Issues The merger and acquisition (M&A) market has evolved over the last several years and faced turbulence in 2020. One increasingly popular aspect of an M&A transaction is the use of representation and warranty insurance policies. After acquiring a business, a buyer may become aware that representations and warranties in the purchase agreement that ...

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Transition Planning Revisited

Improving the Business and Positioning it for Sale An exit plan must be fluid and flexible. This article provides readers a summary of the standard processes followed by the author and potential pitfalls. You say succession, I say exit; you say leadership change, I say transition—at the end of the day does it really matter? Change is coming and time waits for no one. Perhaps the following Mark Twain quote s ...

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What is the Small Business Reorganization Act?

Highlights of the New Bankruptcy Chapter: Chapter 5 Many small businesses could not afford the processes in place under Chapter 11. The SRBA, signed into law in August 2019, created Chapter 5 and was intended to provide a “fresh start” to small business owners. This article highlights some of the key issues under the new law. On August 23, 2019, a relatively small, 22-page bill known as the Small Business R ...

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Overview of Bankruptcy

Procedures and Bankruptcy Code Changes for CPAs and Consultants A business or individual facing financial distress can utilize three types of federal bankruptcies to attempt to resolve their financial difficulties. This article provides an overview of the differences and when each would be used. Keep in mind that bankruptcy is a legal proceeding and must be handled by an attorney. However, business and fina ...

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Task List

For When a Client Wants to Sell Their Business The authors in this article share a checklist developed and provided to firm clients contemplating a sell of their business. Following are the steps involved when a client wants to sell their business. Buyers can also use this list as a timeline and road map of the steps that are expected to occur and what is expected of them. ❏  Be sure client wants to se ...

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Adding Growth to Exit Planning

Observations of Needs of Boomer Owners as the Exit Tsunami Begins Readers serving as advisors to privately held business owners stand in the position of being the authority when it comes to topics such as growth and exit planning. This QuickRead article is written to share the research on the privately held business owner market and mindset, which points to important considerations for business owners who a ...

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