As business owners consider succession, many consider an outright sale of the business. At The Bonadio Group, our team has managed over $900 million in deals and gained valuable insights from each transaction. We primarily help middle-market companies, with annual EBITDA ranging from $2 million to $10 million, sell their businesses at the best possible price.
M&A Is An Art — Not A Science
Mergers and acquisitions are more of an art than a science. Despite that, following a disciplined sell-side investment banking process is essential to ensure the maximum value for your business and a successful exit. Selling your business is a marathon, not a sprint. For most middle-market business owners, their business is their most significant asset, and selling it is a once-in-a-lifetime event. There’s usually only one chance to get it right. Like most things, proper preparation is critical to achieving a business owner’s desired results in a middle-market M&A transaction.
Where To Start
Start by imagining yourself as a potential buyer in the marketplace. Asking yourself, “What business attributes are important to me if I buy a business?” is a fundamental starting point. A business owner should focus on maintaining consistent, accurate and reliable financial reporting, sound internal controls and processes, and tracking adjusted EBITDA. They should also focus on building a solid management team and employees, diversification of customers and vendors, and growing revenue, profits, and cash flows.
A business owner should also have a good pulse on the current M&A markets. What is the current state of the M&A markets? How active is my industry in the M&A markets? Who are the active potential buyers in my industry? What are current market multiples? These are all questions that a business owner should have a high-level understanding of before deciding to exit their business.
Having the right advisors is crucial when it comes to selling a middle-market business. Attempting to sell your business independently is time-consuming and highly complicated. This is where a skilled investment banker shines, offering many benefits. It is also critical to have an open and candid conversation early on with your trusted M&A advisor about your transaction desires and objectives.
Looking For More Detailed Insights On M&A?
Download our “A Business Owner’s Guide to Middle-Market M&A” guide. It is a practical resource that provides insights on how to maximize your business’s selling price. It is specifically designed to introduce business owners to middle-market mergers and acquisitions (M&A) and help them understand the basics of long-term exit planning. Whether you are in the early stages of considering a sale of your business or have already begun the process, this guide will equip you with the basics.
Topics Covered In The M&A Guide Include:
- Introduction to Middle-Market M&A
- Middle-Market M&A Valuation
- Consideration and Deal Structure
- Preparing for a Sale
- The Marketing Process
- Common Pitfalls to Avoid
At The Bonadio Group, our clients maximize value by doing what they do best: building and running their businesses. Similarly, we maximize value by excelling at what we do best: utilizing disciplined investment banking processes to assist clients in their exits. If you have any questions, please feel free to reach out. We are here to help.
