Value and the sale of your business

When considering the sale of a business, it is very easy for a business owner to be uncertain or even pessimistic about its value.  This is definitely a mistake, particularly because it can cause a potential seller to miss out on possible opportunities.

It may be ironic that I founded an M&A boutique firm to help people sell businesses; however, my own father, when I was young, who owned a small chain of variety stores, decided to close the business rather than sell it.  He sincerely believed that no buyers would be interested.  Mind you, he didn’t test that theory; however, he thought he was right.

A business owner should never assume that his or her business is too small to be of interest to a large company.  It is important to remember that there is a difference between the financial value as portrayed by the financial statements and the market value.  The market value includes more than just how much the company is worth monetarily.  It includes the value of intangible assets for example, the customer base, distribution network, location, having a unique service or product, long term and loyal customers, name recognition, etc. These factors go way beyond the balance sheet and income statement.  These and other factors always contribute to a company’s value but are not always easily quantifiable.

Additionally, just because a company has modest financial results does not mean it will not sell.  Buyers will look at the future of the company and make an assessment of its potential.  This is especially true when the economy is in a down cycle.  It is also important for the seller to accurately analyze the business’s true financial position, marketability, and potential.  A good M&A advisor will know how to do this quickly and accurately.

For a company with modest financial results, it is important not to oversell the company, as buyers may pull out if they feel the current financial results are unsustainable or the revenue and profit projections are unrealistic.  When pursuing the sale of a company, one must strike a balance between underselling the company and overselling it and scaring off or losing potential buyers during the sales process.  Once again, a good M&A advisor can help strike the necessary balance.  The advisor can also provide value-added by finding the “right” buyer who will understand the value and potential of the company for sale.

Founded in 1987, Versailles Group is a boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies in the middle and lower-middle market. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.

Mergers and acquisitions are an effective and efficient substitute for R&D for companies that need help combating shrinking market share or stagnant growth. In some cases, companies are confronted with fierce competition from startups and utilize M&A as a way to “outsource” R&D and leave the risk of innovation to startups that tend to excel at R&D. Many of these companies are skipping R&D almost entirely by acquiring other companies. This trend is true in almost all industries, and many of the transactions are cross-border.

The chart below depicts the top three sectors for cross-border M&A.

In recent months, Samsung has been actively involved in M&A deal making as a way to instantly build up its capabilities in emerging technologies such as mobile payments, cloud-based services, and artificial intelligence.

Samsung’s planned purchase of U.S. autoparts supplier Harman International Industries Inc. for US$8 billion in an all-cash deal instantly makes Samsung a major player in the world of automotive technology. It’s an excellent example of a company that is using M&A to expand. This deal will be the South Korean smartphone maker’s biggest acquisition in history.

M&A in general and cross-border M&A in particular is a well-proven way to enhance shareholder value, either by acquisitions or divestitures. While most of the press is focused on the large transactions, middle-market companies can also utilize this “tool” to make defensive or offensive acquisitions or divest businesses that no longer fit the company’s strategy.

The chart below demonstrates the growth of cross-border M&A deals from Q2 2016 to Q3 2016.

Versailles Group is a Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+1 617-449-3325

November 25, 2016

The importance of M&A as a Tool to Adapt to Changing Business Environments

To succeed in the current business environment, companies will need to develop a keen sense of agility to grapple with the slow and uncertain economy, political risks, the threat from new entrants with more creative and efficient business models, etc.  It is widely recognized by CEOs that to respond to today’s marketplace organic growth is far from enough because most transformational technologies are outside the core competency of the average organization.  According to KPMG, CEOs are pursuing a range of activities in search of growth, which are listed below.  For each activity, the percentage indicates what percentage of CEOs will think about that particular action.

M&A, including minority investments, is expected to play a major role as companies search for new and valuable business solutions. Companies that are able to be proactive in terms of technological and business model disruptions will greatly enhance their chances of success, profitability, and longevity.  With regard to the US presidential election, and as Warren Buffett said, the market will move forward with either candidate who happens to get elected as President.  The country will survive and business will survive.  Succinctly, M&A will go on regardless of political uncertainty.

Founded in 1987, Versailles Group is a boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies in the middle and lower-middle market. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.

M&A - The Letter of Intent

When a business is being sold, a buyer typically makes an offer for the business.  Next, the seller responds with a counteroffer, which is followed by the negotiation of terms and then the execution of a Letter of Intent (“LOI”) by both parties.  Sometimes, the LOI is called a Memorandum of Understanding (“MOU”).  To summarize, the LOI or MOU documents the buyer’s proposed price and terms.  Once the LOI is signed, due diligence begins, during which the buyer confirms the condition of the business and the seller confirms the buyer’s ability to complete the deal.

Even though an LOI, or MOU, contains terms that are still negotiable, buyers often get nervous once the document has been executed.  During the diligence process, they start double and triple-checking all of the details.  Part of the M&A advisor’s job is to facilitate the buyer’s diligence, reassure the buyer, and keep the process moving towards a closing.  

Generally, LOIs and MOUs are not binding, but many buyers and sellers view them as binding contracts.  Therefore, these documents often include contingencies; more specifically, conditions to be met before the offer becomes legally binding.  However, certain other clauses of the LOI or MOU will be binding, e.g., exclusivity, confidentiality, timing of the transaction, etc.

Signing the LOI or MOU usually takes the company off of the market during the exclusivity period; thus, the seller should be sure to do some diligence on the buyer’s financial ability before signing.  The deal will not close if the buyer cannot pay the purchase price.  Thus, it can sometimes be advantageous to accept a lower price from a financially capable buyer as opposed to a higher price from a potentially financially unstable buyer.

Finally, it is critical to thoroughly review the LOI or MOU with an attorney.  The seller should also seek advice from their M&A advisor and CPA, if necessary.  Sellers should be careful not to focus only on the proposed sales price as there are many factors that affect how good or bad the deal is for the seller.

Founded in 1987, Versailles Group is a boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies in the middle and lower-middle market. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.

M&A - Financial Versus Strategic Buyers

M&A buyers are usually classified as either strategic or financial buyers.  Strategic buyers are companies actively pursuing opportunities to grow or diversify their revenue sources in the seller’s market.  Strategic buyers represent about 70 percent of the total M&A market.  Usually, a strategic buyer will have something in common with the selling company; they can be competitors, suppliers, customers, or even an unrelated company with a complimentary product looking to gain access to the seller’s industry, market, or business. Ultimately, they are looking for a company with attributes that can be integrated into their established business strategy to create synergy - the concept that the value of two companies combined is greater than the sum of the separate individual parts.  (Sometimes, strategics make acquisitions to diversify.)

Financial buyers look for good businesses they can build up over a few years and then sell to make a profit.  Private equity, venture capital, family offices, and some hedge funds are good examples of financial buyers.  Their acquisitions comprise the remaining 30 percent of the M&A market.  They look for growth prospects, good management, and future exit opportunities.  Rather than integrate the company into their own, they work with the seller’s management team to understand what resources they need and help obtain them, in an effort to foster growth.

During the Transaction 

Understanding the end goals of both financial and strategic buyers is essential to understanding how and why their approaches differ.  After the transaction, a strategic buyer will consolidate the target business with their business systems, controls, and management to recognize synergies from the integration of the two organizations.  If it’s a total integration, this may present a challenge for a seller that is looking to remain active in the company.  In this case, the best alternative is a financial buyer, who typically allows the company to run as a stand-alone entity.  In contrast, the financial buyer’s goal is to improve the business operations in order to make the company a more attractive investment to a future acquirer. 

Efficiency of the Transaction

Typically, a financial buyer has completed many deals before and has developed a kind of “playbook” to follow making the process flow along more efficiently than an inexperienced strategic buyer.  However, financial buyers tend to be more thorough in their diligence, for a couple reasons.  First, they have to take the time to learn about the industry they will be entering, whereas a strategic buyer generally has strong industry knowledge and has already developed an outlook for the future.  Additionally, things that may make sense to a strategic buyer may become an issue for a financial buyer who doesn’t understand industry norms.  

Secondly, a financial buyer is more likely to keep the current personnel in place than a strategic buyer.  Thus, the diligence process will have a stronger focus on the infrastructure of the target company.  Effectively, strategic buyers will focus on validation and the ability to integrate the target into their business model and financial buyers, in addition, will have to study the business model, the personnel, and much more.  

Consideration

One of the most important issues for sellers is the amount of consideration paid by each type of buyer.  Generally, a strategic buyer will offer greater consideration than a financial buyer.  In essence, financial buyers are purchasing explicitly what the company has to offer.  They buy the expected future earnings, in hopes to expand the cash flow beyond what the company has done previously, but they do not pay for that potential.  Usually, a strategic buyer will pay a premium to recognize the synergies that make the transaction attractive.  Almost immediately after closing, a strategic buyer will recognize synergistic benefits.  These benefits can be attributed to various factors that will depend on the organizations involved but can include greater market share, combined talent, and cost reduction.  Most importantly, the more realizable the synergies are, the more the purchaser will be willing to pay.  

There are also defensive reasons for a strategic buyer to pay a premium.  Suppose there are three companies who sell the same product; two with large distribution networks and significant market share.  The third company lacks the sales capability but they know how to produce the product for much less.  If the third company were to sell itself, it would make sense that the other two would pay a significant premium to prevent the other from acquiring the low cost producing seller.  In this scenario, a financial buyer would be outbid as they would be unwilling to pay a defensive premium. 

While the differences between strategic and financial buyers are evident, there is no clear answer as to what type of buyer is best for a seller.  The best way to discover what is right for the seller is to reach out to both strategic and financial buyers.  Understanding the characteristics and intentions of the target and acquiring entities is essential in making the right decision.  Aside from the obvious benefits of fostering competition, reaching out to both types of buyers present the opportunity for the seller to see more options and ultimately better understand what is in their best interest.  It’s also the best way to drive the highest possible valuation.

Founded in 1987, Versailles Group is a boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies in the middle and lower-middle market. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.

In negotiating a merger, an acquisition, or a divestiture, the ultimate goal is to structure a deal in which separate companies complete a transaction that generates shareholder value for both buyer and seller.

M&A negotiations are one of the more complex aspects of an M&A transaction, and it’s always a good idea to have an experienced M&A advisor perform this task.   While there are some minor negotiations that occur in the earlier stages of the M&A process, the most important negotiations relate to the value and terms of the proposed transaction.  The value usually isn’t a complex concept, but earnouts and other forms of consideration can be tricky, particularly for an entrepreneur who has not completed a large number of transactions.  There are many important items that need to be negotiated, for example, there is the issue of a holdback versus an escrow and what percentage of the transaction consideration this will be.  The holdback or escrow provides the buyer with protection against unforeseen liabilities.  Many sellers worry that they’ll never see this money; however, provided there are no hidden liabilities, the seller always gets their funds.

The selling firm can accept, reject, or attempt to negotiate any offer that is submitted for their company.  Most of the time, the offer price isn’t considered high enough or the other terms don’t coincide with the interests of the selling company’s shareholders.  However, if this can be overcome, more detailed negotiations will ensue if both parties are willing.  Both parties always retain the ability to reject the transaction if it doesn’t meet their financial and other objectives.  Once the major deal terms are agreed, the parties will execute a Letter of Intent, which is a non-binding document but captures the major terms and conditions of a potential transaction.

In order to complete a successful transaction, a large amount of collaboration and negotiation between the buyer and seller is required.  Most importantly, both parties must understand each other’s objectives, and it’s always helpful if both sides believe in win-win negotiating. 

The importance of understanding each other’s objectives can be demonstrated by the following story.  Two sisters were fighting over an orange, and in order to resolve the argument, their father cut the orange in half and gave one half of the orange to each of his daughters.   While this seems like the best solution, both sisters actually ended up with a bad deal.  One sister wanted the rind for cooking, while the other sister wanted to eat the orange.  Hence, both of them actually lost.  Instead, if the two sisters had understood each other’s objectives, the orange could have been divided in a much better way: the rind to one and the contents to the other.  The moral of the story is to try to understand the other side’s needs and objectives with a view towards finding middle ground or a compromise.  An experienced M&A advisor will know how to conduct these M&A negotiations so that they are productive, efficient, and result in a successful transaction.

Founded in 1987, Versailles Group is a boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies in the middle and lower-middle market. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.

While some debate the issue of whether to hire an M&A advisor or try to complete a transaction alone, it’s been well-proven that a good financial advisor can add value to completing a successful transaction.

M&A advisors play an integral role in orchestrating successful mergers, acquisitions, and divestitures.  The best M&A advisors are generalists as they have broad experience to draw on as they work through the process of completing a successful transaction.  Anyone interviewing an M&A advisor who receives the answer that the financial advisor knows exactly who will buy their company should keep looking.  Often, the best buyer isn’t known to the company but is carefully cultivated through the process by the M&A advisor.

The M&A advisor’s role is to orchestrate the transaction.  One of our clients used the analogy of a choreographer.  In some ways, the M&A process is a ballet that needs to be carefully scripted if the best possible results are going to be achieved.  One of the most important objectives is keeping the process confidential.  The M&A advisor also plays an integral role in mobilizing information, organizing the auction, negotiating terms, managing the diligence process, and finding solutions to a multitude of issues during the process.

One of the first steps that a good M&A advisor will take is to identify the client’s objectives.  Next, there’s the discovery period where the advisor researches the client’s company in order to create first-class documentation.  The M&A advisor will also do research to find every possible prospective buyer on the sell-side or identify possible targets on the buy-side.

On the sell-side, the M&A advisor will create an Offering Memorandum or Confidential Information Memorandum so that prospective buyers can obtain information in a logical order about the company.  More specifically, this document lays out information on the company’s operations and products (or services), industry analysis, financial background, forecasts, etc.

On the buy-side, it’s always good to have a well written document to give to potential sellers that outlines information on the acquiring company and their objectives.  This makes the sellers comfortable and accelerates the process.

Whether it’s on the sell-side or the buy-side, a good financial advisor will know how to draft these documents, which are pivotal in attracting potential buyers or sellers.  While some companies think they can do without a financial advisor, most entrepreneurs are ill-equipped to prepare these essential documents.

The M&A advisor is also very useful in the preliminary negotiations leading to an offer, structuring the transaction and negotiating and mediating throughout the process.  The client can benefit from this advice as the financial advisor can help keep their client level-headed by maintaining realistic goals and expectations as well as providing unbiased advice.  In addition, they can negotiate more effectively because they are removed from the inherent emotional complications, not to mention their expertise in the entire process.

Whether a client is looking to acquire or sell a company, they have the option of hiring a full service bank or a boutique bank as a financial advisor, which both inherently have their pros and cons.  While full service banks have a greater variety and depth of resources than boutique firms, their effectiveness is also hindered by possible conflicts of interest that don’t affect boutique firms as severely.  In a study done by Jie Wei, a financial economist working in the Office of the Controller of Currency in Washington, D.C., and Weihong Song, an assistant professor of finance and the University of Cincinnati, boutique banks on average are found to be less expensive overall and when used for financial advisory on the buy-side, the premium paid for an acquired company is less than using a full service bank.

For smaller middle-market companies, i.e., companies with less than US$250 million in revenues, a boutique firm can offer the client better service, specialized expertise, and better results than a larger full service bank.  Most importantly, M&A advisors, because of their experience and expertise, can do a far better job at navigating the M&A waters than an entrepreneur whose expertise is in their product or services.

Founded in 1987, Versailles Group is a boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies in the middle and lower-middle market. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.

When selling a business, it is important to know how to appeal to buyers.  A key step, of course, is to make sure that the best parts of the business are displayed.  These items are what we call Unique Selling Points (“USP”).

A good M&A advisor will know how to portray the USPs so that a broad audience will be able to understand and value the business.  This is important as the best way to sell a business is to contact a large number of potential buyers, usually worldwide.  The buyer list should also include a variety of types of businesses, if possible.  There is no way to predict where a buyer will come from, why they will be interested in your company, or why they are looking to buy any company at all.  Because of this, casting a wide net in the search for buyers is the best chance at finding the “right” interested party.  The “right” buyer will always pay more for the company.

In addition to the formal Confidential Information Memorandum that buyers will receive after executing a Non-Disclosure Agreement, the company or its M&A advisor should create a one-page teaser.  The teaser should describe the company in enough detail, without disclosing confidential information, to get potential buyers interested.  In most cases, it will be a “blind” teaser in that the company’s name will not be disclosed.  It should also be written so that potential suitors won’t be able to figure out which company is for sale.

The teaser should include background on the company—the type of company, overview of its products/services, its history, location, etc.  The teaser should then go on to describe the customer base and why the business is a good investment.  The teaser should also have summary financial data, historical, current and projected.  To summarize, the critical part of the teaser is to make bold claims to drive interest.  At the same time, one needs to make sure that those claims can be backed up with facts.

The majority of people who receive the teaser will not end up being interested in purchasing the business.  However, knowledge is power.  It’s just as important to know that other companies are not interested.  It demonstrates to the seller how strong the market is for their company, which is very useful information.  Both the seller and the M&A advisor commence the process with the optimism that there will be many prospective buyers.  But, once buyers are contacted, the seller will have a very good idea of how many interested buyers there really are.  If the demand is modest, it doesn’t’ mean that the company can’t be sold for a good valuation.  But, it does mean that the seller needs to be careful with the buyers that do present themselves.

In conclusion, the key to the teaser is to give potential buyers enough information to pique their curiosity without releasing too many details about the company.  Interested buyers should then execute a Non-Disclosure Agreement and receive the Confidential Information Memorandum on the company.  From there, the M&A advisor should narrow down the interested parties to those that are serious and financially qualified.

Founded in 1987, Versailles Group is a boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies in the middle and lower-middle market. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.

When considering the sale of a company, it is useful for the seller to have a target date for when they would like to sell.  However, there can be disadvantages to having too firm a deadline.  With regard to a lower middle market company, i.e., one with less than US$250 million in revenues, a seller should always be ready to take advantage of market conditions or be opportunistic.  Furthermore, sellers should always try to sell on an uptick, i.e., when the company is doing well.

Many sellers wait too long.  Things change:  market conditions, consumer behaviors, competitors creeping in, etc.  Or, the economy changes as it did in 2007, and the US entered the Great Recession.  In these cases, the seller misses the “window” to sell for a high valuation.  To keep it simple, company owners should think of their companies like fruit - it matures, ripens, and should be sold before the value expires.

The best operators understand that it’s important to always have the company in the best possible shape, with all the paperwork, financials, and other information in order to be able to take advantage of market conditions.  It’s always best to sell before one has to sell.  Many owners wait until they have a medical reason, a family situation or something else that impacts the M&A process and the final value in an extremely negative way.  To summarize, it’s better for the seller to be early than late or possibly not be able to sell at all.  (Over the last 30+ years, we have seen company owners lose most or all of their company’s value by waiting too long.)

Potential sellers should not be hesitant to engage an M&A professional to help them determine the best timing to conclude a successful sale.  And, if the timing is right, the seller should always hire an M&A professional to increase the probability of a successful sale. 

With few exceptions, all companies can be sold at any time; however, the best time to sell a company is when it is profitable and growing.  Many sellers believe that their company will continue growing and increasing profits forever, but in most cases, something changes and the company’s perfect track record is shattered.  The risks are high because when this happens, it has a definitive negative impact on the valuation.

It’s not always easy to time it, but the best way to achieve the highest value is to be ready to sell when the company is profitable and growing, when the economy is strong, and when the seller doesn’t have to sell.  Of course, aligning these things may not always be possible.  The next best scenario is if the company is growing and profitable.  Thus, any company owner who has a company that has a positive track record should consider selling, even if the timing is different (even earlier, for example) than their original target date.

When a company’s performance is modest or the economy isn’t doing well, it’s especially important to engage an M&A advisor.  He or she should be able to identify and contact buyers on a worldwide basis, which will mitigate the company’s modest performance.  Frequently, an international buyer will recognize the value, and a successful transaction will be concluded.

As a result of doing M&A for more than 30 years, I have a clear bias for sellers to sell earlier rather than later.  We’ve seen more sellers who have sold “early” make more money than those who held on too long.  The risk of not selling at a high valuation grows over time because markets change, products change, consumer interests change, etc.  The smartest sellers are those who get asked by buyers if they are selling too early.  The alternative, selling too late, puts the seller at considerable risk of selling at a reduced value or missing the opportunity to sell.

Founded in 1987, Versailles Group is a boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies in the middle and lower-middle market. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.

Importance of an M&A Team

One venture that entrepreneurs should avoid is the idea that they are qualified to sell their own business.  Many times, a successful entrepreneur will figure that if they were successful in building a business they can be successful in selling it.  In theory, selling seems like a pretty simple task:  all one needs is a buyer.  But there are many tricks and traps in the process.  To ensure a successful exit with a high valuation and the best terms, it’s necessary to assemble a team, including an M&A advisor.

Too many sellers try to go it alone or with limited help, only to encounter uncontrollable costs related to the process, extensive delays, and unpredictable results.  For most entrepreneurs, the company that they’ve spent five to forty years building represents a majority of their net worth.  It’s difficult to explain why an entrepreneur who has invested so much time and effort into building their company would take a chance on the one opportunity to maximize the value of a sale.

The amount of help that an entrepreneur will need depends on several factors, for example

• • Does the entrepreneur have a buyer or multiple potential buyers in place?

  • Is the entrepreneur too busy managing the company’s daily operations to participate actively in negotiations?

  • Is the entrepreneur effective at marketing the company to outsiders and does he or she have the time and ability to negotiate complex contracts?

  • Is the entrepreneur capable of valuing the business accurately or, at least, capable of understanding the true value of the company?

  • How much M&A experience does the Company’s attorney and CPA have?

There are four types of professionals that every seller should strongly consider retaining to form a winning M&A team:  An accountant if the entrepreneur’s current CPA has limited to no experience with M&A transactions; a separate tax advisor for the M&A transaction, especially if there are complex or unique tax issues; an attorney with significant M&A experience to prepare and negotiate essential documents, e.g., Non-Disclosure Agreements, Purchase & Sale Agreements, Escrow agreements, etc.; an M&A advisor, especially if the entrepreneur does not have prospective buyers.  It should be noted that M&A transactions are very labor intensive and in most cases, entrepreneurs don’t have the time or expertise to handle a company sale.  Therefore, a professional M&A advisor is always recommended. 

It might seem that hiring multiple professionals would cost the entrepreneur more in the long run, but hiring the right team may ultimately reduce the fees one pays overall.  More importantly, the right professionals will make sure that the entrepreneur receives the best possible valuation and terms.  At the end of the day, that’s the objective of an entrepreneur’s exit.

Founded in 1987, Versailles Group is a Boston-based investment banking firm specializing in mergers, acquisitions, divestitures, and cross-border middle-market transactions.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues between US$2 million and US$250 million.  Versailles Group has closed transactions in all economic environments, literally around the world.  Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For more information, please contact

Donald Grava
Founder and President
617-449-3325

April 1, 2016