In middle-market mergers and acquisitions (M&A), earnouts have become an increasingly popular mechanism for structuring transactions. This contingent payment arrangement, in which a portion of the purchase price is linked to the future performance of the selling company, offers benefits to both buyers and sellers, especially in uncertain economic conditions.
Initially conceived by the Economic Innovation Group (EIG) and formally established by the Tax Cuts and Jobs Act of 2017 (TCJA), Opportunity Zones serve as an economic development initiative enabling investors to channel capital into underserved areas across the United States.
When selling a business, one of the most frequently asked questions is, “What can I do to maximize the sale price of my business?” While every business is unique, certain characteristics consistently drive higher valuations.
Deciding to sell a private business is one of the most significant choices a business owner will ever face. This is particularly true for those in the lower middle market, where businesses typically range in value from $5 million to $100 million. The stakes are high, and the process can often be complex. However, a well-crafted exit plan can help maximize the business’s value, mitigate risks, and ensure a smooth transition to the owner’s next chapter—be it retirement, a new venture, or simply reaping the benefits of their hard work.
For business owners looking to sell their company, there are more factors to consider than simply finding the right buyer at the right price. To accomplish a successful transaction, goals should be set to define what success is.
For business owners looking to sell their company, there are more factors to consider than simply finding the right buyer at the right price. To accomplish a successful transaction, goals should be set to define what success is.
R&W insurance provides private equity firms, strategic and corporate buyers, risk managers, and other stakeholders with a risk mitigation solution for uncertainties in a merger or acquisition. The policy is available to either the buyer or seller and provides protection against financial loss, including defense costs for certain unintentional or unknown seller breaches.
For business owners looking to sell their company, there are more factors to consider than simply finding the right buyer at the right price. To accomplish a successful transaction, goals should be set to define what success is.
In a previous article, we discussed Net Working Capital (NWC) and its significant role in transactions. To recap, NWC is defined as a company’s current assets minus its current liabilities. This post will address one component of NWC that is often misunderstood and mishandled in the sale of a company: deposits.
Net Working Capital (NWC) is one of the most important negotiations in a transaction, often having the greatest economic effect compared to other terms in a deal. NWC is also
one of the levers buyers can use to potentially lower the price they pay for an acquisition. Why then, does NWC so rarely get discussed until the transaction is almost complete? The answer to that question, and the topic of NWC in general, can be complicated. However, a
good advisor should be able to simplify the explanation and act as an advocate to ensure the seller receives fair treatment. In this article, we will take a look at what NWC is, how it
is used, and the benefits an investment banker can provide to sellers by negotiating its value.
