M & A
Mergers & Acquisitions
At Transworld we have a mergers and acquisition department that has a team of professionals that specialize in larger transactions. Craig Cowden is uniquely positioned to provide you the service and know-how you need to successfully negotiate the M&A waters.
What qualifies a business to be an M&A transaction?
There are several situations that could make your business qualify for our M&A department:
- Your business has earnings greater than $1MM. When business grows to this size they become targets for acquisition by industry players.
- Your business is too large for an individual buyer to purchase or finance through conventional methods. Once your business is worth multi millions, a single individual usually will not purchase it (most multimillionaires do not wish to work).
- Your business is in an industry that is currently being “rolled up”. In some industries, strategic buyers that want to consolidate the marketplace will purchase even small businesses.
- Your business is experiencing incredible growth. If you business is running out of capital because of growth, it may be an M&A target.
- You want to grow your business and perhaps retain some equity. If that is the case, you will need M&A expertise.
The M&A Selling Process
Understanding your goals
We meet with you and perhaps your advisers to understand your future goals. There can be many situations that could be present. Important issues include:
- Your company is growing and you need capital.
- Your company is growing and you need expertise to take it to the next level.,
- You would like to take some chips off the table.
- You need to retire and there are no family successors.
- There are family successors and they will need capital and/or expertise.
- You have been approached by your competition to sell your business.
- There is an industry consolidation happening.
- The marketplace is changing and you cannot or are not willing to invest to keep up.
- You’re tired and want to do something else with your life.
Whatever the issues are, we need to understand them completely. We will take the time to ask the right questions and get the information we need to create an environment focused on getting you the best deal possible.
Review your options
There are many options that you must consider. Craig Cowden and the resources available through Transworld can help you understand them all. Important issues include:
- Is it time to sell?
- Who are the buyers?
- Strategic or financial?
- Can I raise capital?
- Can or should I go public?
- Will I have to stay on and how long?
- What are the fees involved?
- Are their any upfront fees? (Most probably NO!!!)
Valuation
Craig Cowden can help you understand how much your company is worth! Important issues include:
- Should I pay for a valuation? How much? (Not 50k!!!!)
- What multiple applies to my business?
- What methods or rules of thumb are used in my industry?
- Do assets matter?
- Do you apply gross sales
- What are the tax implications?
Create a strategic plan
Those who fail to plan, plan to fail. Craig Cowden and Transworld M&A will set up a plan of action to take your business to market. Important issues include:
- Which buyers do we approach first?
- How do we get the best price?
- How do we create completion for the deal?
- How do we keep it CONFIDENTIAL?
- Preparing the right marketing package (Deal book!)
Network and market the sale
Transworld is one of the largest and most successful business sale organizations in the country! They work M&A differently! Craig Cowden is a hands-on, experienced business expert. Important issues include:
- The multifaceted approach. First strategic buyers, then financial, then open market.
- Create competition for the deal to get you the best price.
- Qualify buyers.
- Review their qualifications.
Meet with prospective buyers
Craig Cowden will attend most meetings with buyers and be present on conference calls. He will prepare beforehand. Craig will also hold post meeting overviews to go over how the meeting progressed. Important issues include:
- Meet with only the best buyers.
- How to handle conference calls.
- How to handle face-to-face meetings.
- Limited but important information.
Solicit and review letters of intent (LOI’s)
Craig Cowden will work with you and your advisers to decide who is the best buyer, and which one will eventually close. Important issues include:
- Who’s the best buyer?
- Cash, notes, earnouts, stock, escrow?
- Senior debt, mezzanine, secondary?
- No shops and non-solicitation agreements?
Negotiate the sale
Transworld has an in house rigorous training program to refine negotiating skills, which Craig Cowden has participated in with great success. Most companies in the M&A process are professional buyers- you need an expert on your side. Important points include:
- Negotiation never ends.
- What should be in the LOI?
- When should the definitive agreements be drawn?
- How long for due diligence?
- Who pays the attorneys, CPA’s?
- Is an audit necessary?
Due Diligence
50% of unmanaged deals die in due diligence. Craig Cowden will quarterback this process and keep everyone in the game. Important issues include:
- What information is necessary?
- Where is due diligence done?
- What to do when the buyer asks you to cut out the intermediary, your attorney, or CPA?
- How not to get a “haircut” as the deal progresses!
Close the deal
Once due diligence is over, then the M&A process must be completed. Craig Cowden and the experts at Transworld will work tirelessly to get the transaction closed! Important issues include:
- Review and negotiate definitive agreements.
- Follow up with financing sources.
- Arrange real estate sales or lease transfers.
- Notify key employees at the appropriate time.
- Help arrange wire transfers.
- Make reservations for the celebratory dinner!!! (Perhaps even pick up the tab!)