Most corporate owners view their goals as being in one of two phases: a growth phase or an exit phase. What most owners don’t realize is that both growth planning and exit planning are directly related.
BTSI is a Mergers & Acquisition firm specializing in the creation and execution of our client’s strategic growth plans and exit strategies. We have a proven process that consistently delivers superlative results, yet is tailored to the unique needs of any given client’s personal and professional aspirations.
When done properly, executing on a strategic growth plan can take your company to a new level, eliminate your financial risk, give you passive income equal to or in excess of your current income, and set the stage for a much larger liquidity event when you do decide to exit.
BTSI has the experience and professional expertise to make sure you optimize the end results - for you, your family, your family’s future generations, and your employees.
A few details on what we Don't Ever Do
Although we maintain excellent relationships with buyers, generally they focus on acquiring companies at or below market price. We represent sellers only - so our attention is not diluted. Our resources remain focused on selling your business above market price. Our track record is proof that we excel at helping owners of middle market, privately-held businesses maximize value and acquire the resources needed to meet their goals — whether growing their business or exiting.
Calculations don't determine business value — perception does — and we understand the motivating power of perception. Does a strong 12-36 month performance before selling help get higher bids? Of course. But before we market your company, our analyst team casts a critical eye on your firm and provides guidance on issues that will affect valuation. Some of those issues we'll address - others we’ll position as opportunities. The future, rather than the past, becomes the key to stimulating buyer interest and determining your company's value, and we are masters at that process of shaping fact-based perception. We'll also advise you on optimal timing for marketing your business.
That's easy, because we don't have junior staff. Unlike the new college graduates who handle much of M&A transactions in larger firms, BTSI's advisors all have extensive business backgrounds. Before joining BTSI, they worked in a variety of roles: as accountants, investment and commercial bankers, business owners and senior executives of regional and national companies. They understand the challenges an entrepreneur faces.
The largest cost in an M&A transaction is usually the taxes you'll pay. To ensure you receive the greatest possible return, you must plan BEFORE executing the transaction. That’s why we serve as a liaison to expert tax mitigation and wealth preservation professionals. You might ask, ‘Why not offer these services in-house?’. Because earning a commission on these products and services could create a conflict of interest. We'd rather introduce you to our strategic partners who are experts in the tax planning and wealth preservation disciplines, while we maintain our focus on forging a deal that achieves your goals.
When a business owner markets his or her own business, prospects are often limited to competitors or select groups who have made overtures. Our marketing strategy is significantly broader, giving you access to tens of thousands of buyers on a national and international level. The majority of our transactions take place with a buyer the owner was unaware of previously. We’ll market your business to more than 4,500 private equity groups and to well over 100,000 strategic buyers, using our proprietary database and professional resources. Then we’ll distill the pool down to those who believe in your company's strategic plan and possess the resources to implement it. Ultimately you want several highly qualified buyers to compete, simultaneously, to offer you the best deal, the best fit.
We coordinate due diligence and closing in-house. Most firms send you to an outside accounting firm to handle due diligence. But we know the more quickly this process moves, the more likely your deal will close. Our in-house CPA works diligently with your accounting staff/advisors to identify the information both parties need, help your staff assemble necessary materials, and ensure the legal agreement reflects the principals' intent. This effort promotes a smooth, seamless, expedited process that moves steadily toward closing. By overseeing the due diligence and closing process in-house, we can also save our clients significant amounts of money that they would otherwise pay in legal and accounting fees.
Perfection is not attainable, but if we chase perfection, we can catch excellence.
A few details on what we Always Do... and Excel At
The last thing you need is to have the sale of your business undermined by distraction, a loss of morale, or by valuable members of your team defecting upon hearing rumors. BTSI understands the importance of confidentiality for the seamless operation of a business while a merger or acquisition is being arranged. If appropriate, we can market a company without employees, customers, or competitors knowing that it is for sale. We can also provide valuable counsel with regard to managing the information conveyed to employees and customers to ensure that they have a positive reaction to a change in ownership.
Whether before, during or after our engagement, BTSI will not disclose information about your identity, markets, products, financial history or current financial status without your consent. Each marketing document receives full client approval before dissemination. The client pre-approves all prospective acquirers before we contact them. All necessary precautions are taken to protect confidentiality. We work together to develop strategies on how to handle inquires and minimize rumors.
Internally, our M&A approach actually helps you proactively manage confidentiality. We position your firm as a strong, viable entity with an exciting future of growth ahead. That helps alleviate any concerns your key employees, customers or suppliers may have, and minimizes opportunities for your competitors.
We know that receiving the highest price possible in a sale is almost always top priority goal for an owner, but it’s rarely the only goal in a transition. Structuring a transaction to effectively address your unique issues is crucial. This is the time you need expert advice. We work toward your other goals as well, perhaps to generate capital for new opportunities, find an equity partner or acquirer with similar corporate culture, retain a substantial equity interest in your company while eliminating your personal guaranty of the company’s debt, develop roles for you and your employees in a new firm, cultivate stewardship among your family members, or establish a legacy that will endure for generations. Whatever your goals and future plans are, developing a viable plan and properly structuring your transaction are the keys to achieving them.
Theoretical valuation methods can provide an estimate of your company's value for specific purposes. In a sale on the open market, however, buyers ultimately determine its worth. Our three-step process for determining your firm’s market value begins with detailed transaction price research, identifying the valuations currently being paid for comparable companies. Then a business analysis helps to refine that estimate. As part of the business analysis a strategic plan for the company is developed and articulated. This focuses the buying community on what the future value of the company will be when the strategic plan is executed, instead of focusing on historical cash flow or asset value.
Finally, BTSI develops and executes a marketing document and plan tailored for your firm. This process lets us consistently achieve a price 30 percent or higher than calculated in theoretical valuation exercises.
During the business analysis, we take an in-depth look at your company in much the same way a potential buyer would. This includes an assessment of organizational structure, operating trends, and business processes, strategies, and plans. Our business analysts facilitate development of a strategic plan that will highlight your company's potential and provide a blueprint for building value. In addition, the findings help pinpoint the optimal time for marketing to begin.
The strategic plan highlights the future opportunities for buyers. They may pour effort into evaluating your history, but acquirers buy the future, not the past. They want to see a sound financial plan and a key employee group committed to executing it.
When selling all or part of your company, it’s not how much you get that matters most - it’s how much you get to keep. The largest cost in selling a business is generally paying the taxes after the sale. Unfortunately that's far too late to begin thinking about structuring the transaction to your best advantage. The IRS will often disallow many tax mitigation strategies if they are put into effect after a Letter of Intent has been signed. As part of our “All-Star” team of best-in-class advisors, we maintain long-standing relationships with experts in tax mitigation and wealth preservation who are intimately familiar with the latest tax laws and can help you significantly increase your return from a sale, both in the present and long-term.
We develop an offering memorandum for your company that describes your business and provides financial information to show your firm's true earning power. Our financial analyst recasts your financial statements by adding back personal and one-time expenses to maximize your firm’s reported EBITDA. That's critical, because many times your company's valuation, at least initially, will be based on a multiple of EBITDA. We also prepare five-year financial forecasts to show your company’s anticipated future performance. Additionally, our analyst prepares regular updates of your financial statements, which saves time during the due diligence phase.
We tailor a one-to-many marketing plan for your company -- one seller, multiple interested buyers -- and then put it into action. We market your company to a very large pool of potential buyers, then distill the pool down to those who believe in your strategic plan and possess the financial and management resources to help implement it. Ultimately we want several highly qualified buyers to compete against each other to acquire your business. This approach brings a much greater value than typical one-on-one negotiations with a single buyer.
We conduct negotiations with the most promising acquirers simultaneously, with discussions focusing on resources, relationships, and the potential synergies between your companies. Price is the last thing discussed. The objective is to provide you with multiple options, so that you can choose the offer that best achieves your goals.
Although negotiations should be dictated by business issues rather than personalities or emotions, discussions may become heated and emotions frayed. BTSI acts as a buffer between you and the buyer, which lets you drive a hard bargain during negotiations but maintain good relationships after closing.
Once your company has accepted an offer, BTSI coordinates the due diligence process. Our offering memorandum will contain most of the items that will be addressed in due diligence. Our strategy is to have the due diligence process be one where the representations made in the offering memorandum are verified by the buyer rather than a process where new information is discovered. This includes preparation of legal documents and interactions among all principals and professionals involved.
Our in-house CPA works with the acquirer's accountants and attorneys to identify the information needed and then assists the sellers' staff assemble the necessary materials. In addition, we work with both parties' attorneys to ensure the business deal agreed to by the principals is accurately reflected in the purchase agreement. Through our handling of the due diligence process, our client avoids the costs that they would incur if it were handled solely by external CPA’s and attorneys.
A surprising number of transactions die during the due diligence phase. BTSI's expert guidance, careful attention to detail, and years of experience overcome obstacles and ensure the deal moves forward.