Ownership Transition
A once-in-a-lifetime opportunity
The US economy has generated greater than $1 trillion of capital for investment into private companies – and there is pressure to put these investment dollars to work. Even in spite of recent quarters’ increases in the rate environment, good businesses still have unpresented opportunities. This circumstance supercharges the opportunity for private business owners to create wealth, deconcentrate risk or move on to the next phase of life.
It Will Be Painful and Costly To Move Forward Alone
Although there is a significant opportunity for buyers with more money than they can invest, it doesn’t mean they won’t be vigilant and careful. Potential buyers will invest heavily in due diligence, and a successful deal hinges on your ability to quickly tell the story of your company’s financial picture, answer hundreds of questions, and provide volumes of files and documents. More than ever, business owners seeking to “get out” need to be sure they possess the skills and acumen to tell their story during a sale process.
Business Consulting Services
Our business transition advisors drive the best outcomes. Without proper representation from the beginning, you could extinguish a deal otherwise possible. If the deal closes without proper representation, interested investors will reduce their original offer price to account for the doubt and uncertainty uncovered in their diligence. This often represents $ Millions in concessions and is completely avoidable. Our Business Consulting Services team manages the sale process to maximize the value of a life’s work and to permit your graceful exit.
What To Expect: Ownership Transition Phases & Outcomes
Business transitions can be stressful. Our experienced business consulting service advisors focus on opportunities and areas of potential risk in all phases of the process, including how to maximize opportunities with different buyer types, how to survive due diligence, and how to mitigate deal-related pain points and the associated deterioration of value. We run through the buzz-saw for you – or at least with you – so you’re not alone.
Providing You with Certainty and Deal Value
The obvious uncertainty for a business owner embarking on a sale is whether the business is saleable (at all) and whether the proceeds will be enough. Business owners must understand how their personal motivations and emotional attachment to the business will influence business decisions. BPM business consulting service advisors can help you understand the likelihood of a positive outcome and provide you with a range of values for the sale.
Align Your Motivations With Deal Costs
Having seen the conflict of owner motivation and seller opportunity play out in hundreds of transitions, BPM developed a stage-gate process for ownership transitions that empowers the seller to confirm salability and enterprise value before committing to a full process. In doing so, BPM aligns owner motivation – and increased confidence – with a building level of professionalization and business acumen as the process moves forward through each stage.
Enterprise Value & EBITDA Expansion Explained
BPM’s Corporate Finance Consulting team, having supported 500+ ownership transitions in the last six years, has the expertise to guide business owners through the deal process and transfer corporate wealth to the family. We enable sophisticated buyers to engage with sellers by employing a high level of business acumen through heightened credibility and visibility, improved financial reporting and increased information flow.
Evidencing this type of business acumen at the time of sale positively effectuates value – and will influence purchase price multiples. A compounding effect can be achieved if this expansion of purchase multiples is combined with improvements in margins (EBITDA). The chart below highlights how dramatically value increases with this combined improvement. In the illustration below, a niche manufacturing business with revenues of $40M experiences a value increase of $10.2M.
