PREPARING FOR YOUREXITMatt Register George WaldenPrincipal Principal
Legal Notice • This is not an offer to sell or a solicitation of an offer to buy securities. • Securities are offered through Corporate Finance Securities, Inc. • Corporate Finance Securities, Inc. is a member firm of FINRA and SIPC.
What are your options?Not selling Selling 0% sale 100% sale
What are your options? Partial Management Sale BuyoutNot selling Selling 0% sale 100% sale Minority Joint Recap Venture ESOP
What is success?• Full retirement?• Continued consulting?• Continue to run the business?• Transfer to the next generation?
Future Funding Needs Charity Family Future Lifestyle Business Opportunities Wealth
Who would buy your company?Strategic Financial• Usually not looking for partners • Looking for return• Your business solves a problem • Not interested in running a• Different math business • Needs management team in place
Minimize Buyer Risk• Audited financials • Provable • Manage for taxes, but prove earnings• Bench strength • Redundancy • Sustainability• Systems in place • Less reliance on personality • More systems
Pre-transaction Planning• Legal • Trusts • Non-profits • Gifts• Wealth Management • Determining your number• Strategic • Right business • Right clients• HR • Knowledge management • Depth of leadership
The Cost of No Plan• Value of business• Risk to buyer• Stress for family• Uncertainty for customers• Uncertainty for employees• Uncertainty for vendors• Fewer options / Less control
Example 1 Company A Company B• Contract Machining • Contract Machining • OEM Drilling equipment • OEM Drilling equipment• $16MM rev • $5MM rev• Proven earnings • Run on a “yellow legal• Management Team pad”• Synergies with buyer • Customer concentration • No plan • No team • No time
Example 1Company A Company B• 5 X EBITDA • 3 X EBITDA
Example 2• $35MM in revenue• Out of favor industry• Non-standard business model• Very profitable• Limited interest from buyers
Example 3• $35MM rev• Well run / depth / systems• Solved a buyer problem