RKJ Partners:
Sell-Side M&A Newsletter
Volume 1, Article 2
RKJ Partners, LLC is an Atlanta, Georgia based investment banking firm designed to specifically assist dynamic, lower middle market growth companies in executing transactions less than $100MM.
RKJ Partners, LLC 4514 Chamblee Dunwoody Rd., Suite 170 Atlanta, Georgia 30338 p. 404.424.9580 www.rkjpartners.com
March 2018
Can you see around corners? Of course not! Not a month goes by where we don’t hear:
“Bob wasted months negotiating with a buyer who couldn’t come up with the cash to buy his company. All his employees found out and some quit. Worse, a customer found out and switched providers.”
“John sold his company for a very low price with a bad structure and got hit with a big tax bill and an IRS audit.”
An investment banker can help you predict and prepare for these scenarios as well as what’s around each corner in the business sale process.
The Need for an Investment Banker.
Handling the sale of your business is akin to being your own lawyer. In the same way that a highly skilled advocate fights for your success against another well prepared legal team, an investment banker stacks your odds on achieving your goals.
Most business owners are focused on the day-to-day challenges and activities of running their company but are not experienced in the business sale process which is often a once-in-a-lifetime event. Handling your sale alone can lead to critical mistakes that can be avoided. The time to experience the learning curve is not when selling one of your most valuable assets. Lack of proper preparation and not utilizing a highly skilled investment banker team can lead to a less than desirable outcome.
Achieving the best net financial reward requires a carefully planned and structured process. Each step must be handled correctly the first time. Owners are experts at running their companies, but few are prepared to navigate this complex process; putting them at a distinct disadvantage. An investment banker provides invaluable advice, support and representation – most importantly, the benefit of experience that can make the difference between a successful transaction and a missed opportunity.
Access to Interested & Qualified Buyers.
All too often business owners will focus on prospects they already know – vendors, customers, employees, or competitors. Buyers such as these frequently lack the means and motivation to pay what a company is really worth compared to buyers who have strategic acquisition goals and are willing to pay accordingly. Some of the most qualified buyers are often the most unforeseen. For many, private equity groups are among the most desirable potential buyers. A business owner is not typically intimate with these markets and therefore may miss out on an opportunity to maximize the transaction. In the end, identifying the “right” acquirer strongly influences market value.
What to Expect from Your Investment Banker.
An intermediary will manage the business sale process from inception to completion. Initially, an intermediary provides feedback as to likely valuation range and transaction structure alternatives. This will confirm whether the expectation of value and yield is in line with your goals. You will then be better positioned to determine whether it makes sense to pursue an exit strategy now, or prepare the Company for a sale in a future period.
Once you determine if pursuing a sale or other business transaction is the right move, you will benefit from these additional aspects in which an investment banker’s expertise will play a significant role in achieving your goals:
- Provide total confidentiality
- Negotiate every aspect of your deal on your behalf
- Provide a realistic and likely value of your business
- Identify and locate the best buyer
- Package, present and market your business to optimize value
- Qualify buyers
- Establish the most beneficial transaction structure
- Draft and negotiate Term Sheets / Letters of Intent
- Navigate through due diligence
- Contract negotiations
- Manage and maximize the probability of a successful sale
The Real Question.
If it’s time for you to consider selling your business, maybe your next question shouldn’t be, “Why wouldn’t I sell my company on my own?”, but rather, “How do I assemble the right team to ensure nothing is left on the table?”
RKJ Partners can assist you in the process of selling your company. We look forward to speaking with you.
About RKJ Partners, LLC
RKJ Partners, formed in 2008, is an established advisor to leading lower middle-market growth companies. We provide our clients with experienced-based solutions and unbiased advice. Our comprehensive array of strategic advisory and execution capabilities allows us to meet the needs of our clients and provide an outstanding level of service in connection with a variety of transaction processes, including:
- CAPITAL ADVISORY: RKJ possesses substantial expertise in assisting lower middle-market clients raise capital to fund growth strategies. Whether the capital source is senior debt, mezzanine/subordinated debt, private equity, or venture capital, RKJ has both extensive and relevant relationships within the capital community to enable the deployment of optimal solutions for our clients.
- MERGERS & ACQUISITIONS: RKJ serves as a trusted advisor in executing merger and acquisition transactions for lower middle-market clients. In addition to our significant investment banking transactional experience, RKJ’s bankers have owned businesses and have served in interim CFO roles for clients. As a result of our experiences as business owners and senior level managers, RKJ’s bankers are able to bring a unique perspective to the mergers and acquisitions process. RKJ’s mergers and acquisitions services include:
- Buy-side and Sell-side Advisory
- Divestitures
- Leveraged & Management Buyouts
- STRATEGIC ADVISORY: RKJ provides financial advisory services to owners, management, shareholders and their boards to assist in the evaluation strategic alternatives and options for extending and/or maximizing shareholder value. RKJ’s advisory services include:
- Business Valuations
- Capital Structuring & Planning
- Negotiating Joint Ventures
- Strategic Business Development
