The PE firm offers you $20M for your business. But the structure is not $20M in cash. It is $15M cash at close and $5M in “rollover equity,” which means you retain a 25% ownership stake in the business after the acquisition. The PE firm’s pitch: hold that 25% stake for 3-5 years while they…
If you are a lower middle market business owner who has started receiving acquisition interest, there is a good chance that at least one of those calls came from someone who is not a traditional PE firm, not a strategic buyer, and not an individual with SBA financing. They described themselves as an “independent sponsor”…
You signed the LOI. The price looks good. The buyer seems serious. The attorneys are drafting the purchase agreement. And then the buyer’s due diligence team sends their document request list. It is 12 pages long. Three years of financial statements. Tax returns. All customer contracts. All vendor agreements. Employee records. IP documentation. Insurance policies….
Construction companies are some of the trickiest businesses to value and sell in the lower middle market. Not because they are bad businesses, many of them are extraordinarily well-run, highly profitable, and deeply embedded in their markets. But because the economics of construction are different from the economics of almost every other industry that M&A…
Nobody calls an M&A advisor when things are going well to say “things are going well.” The call comes when the bank line is tightening, or the major customer did not renew, or the market shifted and the pipeline dried up. The call comes when the owner has been trying to fix it alone for…
When business owners think about who might buy their company, the mental model usually includes two categories: a strategic buyer (a competitor or larger company in the same industry) and a private equity firm. Those are the buyers that most M&A advisors talk about and most business owners research. There is a third category that…
Nobody starts a business thinking about how a divorce might affect it. But when divorce happens to a business owner, the business becomes the most complicated asset on the table, the most contested number in the proceeding, and often the most emotionally charged part of an already difficult process. If you are a Tennessee business…
There is a moment that happens about two weeks after a business owner receives their first serious LOI. The excitement of the number settles. The anxiety of the process takes over. And somewhere in the quiet, usually late at night, a different question surfaces. What do I actually do with this money? It is not…
Of all the conversations in a business sale, this is the one that keeps sellers up at night. Not the negotiation with the buyer. Not the purchase agreement. Not the working capital adjustment or the earnout structure. Those are hard, but they are mechanical. They have numbers and terms and lawyers to manage them. The…
When a buyer offers you $12M for your business, the most important question is not whether $12M is a fair price. The most important question is: where is the $12M coming from? A buyer paying $12M in cash from their balance sheet is a fundamentally different counterpart than a buyer who needs to assemble $12M…
Insurance agencies are one of the most actively acquired business types in the lower middle market, and one of the most uniquely valued. The valuation methodology for an insurance agency is different from almost every other business because the core asset is not a product, a service, or intellectual property. It is a book of…
Tennessee is not just a healthcare state. It is the healthcare state. HCA Healthcare, Community Health Systems, and Envision Healthcare are all headquartered here. The ecosystem of specialty practices, physician groups, behavioral health providers, home health agencies, and ancillary service companies that orbit around those systems represents one of the most active healthcare M&A markets…