Exit Strategy Analysis:
If your company fits into one of the following categories, it may benefit
from an Exit Strategy Analysis.
- The value of the company is less than the price needed
to exit.
- The company structure or operation is highly
complex.
- The books and records are in poor condition.
Selby Associates brings creative solutions to companies challenges.
The solutions start with Selby Associates gaining a clear and thorough
understanding of the company. Selby Associates views a company as a
puzzle with many different pieces to evaluate various possibilities
and opportunities. We are proficient in “taking apart” and
“re-assembling” the puzzle with the result of accomplishing
the desired goal. For example, if you desire to obtain more for your
company, an opportunity may exist to break the company apart and sell
as smaller divisions, as sometimes the sum of the parts has more value
than the whole. Another example of locating value is to uncover, fully
document and support an unrealized strength, to sell the business at
its newly increased value. Also, for a company to present more effectively,
it is necessary to clean up the books and records or untangle the complexities
prior to placing the business on the market.
A summary of the Exit Strategy Analysis includes:
Business Analysis and Review of products, services,
niche, customers, facilities, equipment, market, competition and growth
opportunities
Financial Analysis and Review – recasts, proformas,
appraisals, real estate considerations, incorporate intangibles, debt
considerations
Organization Analysis and Review of company structure,
employees, environmental issues, contracts and legal issues
Explore various Exit Strategies - Acquisition by Public
Company, Synergy Acquisition, Private sale to High Net Worth Individual,
Sale to Private Equity Group, Reverse Merger, MBO/LBO, ESOP, and Liquidation.
Address Exit Strategy Issues – Earn Out, Non-Compete,
and Consulting issues. Make necessary introductions to accountants to
gain knowledge of tax consequences for potential Exits to determine
most beneficial Exit regarding taxes and tax liabilities.
Recommendations and Summary – Determine price
range, Detail most appropriate Exit Strategy(s), Identify and eliminate,
if possible, deal killing issues, threats and risks.
An example of Selby Associates success:
A construction company contacted Selby Associates regarding the sale
of their business. They had met with multiple business brokers who had
determined that the maximum price that could be expected was $7.5m.
Upon our review, Selby Associates discovered several factors that made
this deal a prime candidate for our Exit Strategy Analysis, which resulted
in numerous recommendations. We worked through these recommendations
with the company for a year and the owner realized $11.3m upon the sale.
