eMerge is the only middle market M&A firm that publishes data from our results. Please see: Deal Metrics. Based on our experience and resources, we have a 100% success rate in getting offers for our clients when we tour Buyers on site.
The sale of a Company is typically a once in a lifetime event for a business owner. Most owners cannot afford to experience a learning curve during the sale of their most important and valuable asset.
Statistically, we are able to sell companies for 27% to 54% more than owners who think they can sell it themselves. We have seen it all and our experience has been shown to save, or make, our client's millions of dollars... in ways they never expected.
eMerge provides unique insight capturing the intangible value of the Company while packaging the Company as viewed from the buyer's perspective ... and, we work for you.
95% of corporate buyers would prefer to deal with an investment banking firm such as eMerge, even though they know they will pay more for the Company. GE, for example, looks at 1000 companies to acquire one. Investment banking opportunities receive top priority.
Proper analysis and presentation of financial information is a crucial step. Financial statements are typically prepared for tax purposes, and do not accurately reflect the true profitability of the company. eMerge will work closely with owners to "recast" the Company's financial statements so that institutional buyers accurately realize the true economic value of the Company.
Recast financials combined with documentation of hidden value, intangible assets and a substantiated case for future earnings provide the basis for showing buyers the true potential of the company. Greater potential translates to higher value.
During the eMerge M&A Process, it is imperative to take measures that will guard against competitors, employees, vendors and customers learning of the impending sale. No prospective buyer ever receives any information, including the identity of the Company without execution of a Confidentiality Agreement ("CA").
With our combined experience of over 100 years and with thousands of CA's executed, the instance of institutional buyers violating the CA are virtually unheard of.
Nevertheless, eMerge's role is to protect our client's confidentiality throughout the process.
The M&A Process generally takes from 8 to 12 months to complete depending upon a variety of factors. The process is complex to execute and manage properly. Given the personal, business and market variables, eMerge recommends opening a relationship with us within 5 years prior to a planned sale.
Depending on the nature of the business and owner dependency, transition periods may range from 6 months to 2 years. It is common for the former owner to start the transition period on a full-time basis and then phase into a part-time consulting role. Initial transition periods usually do not include any compensation whereas subsequent consulting will involve compensation. Transition periods, are in all cases, part of the deal negotiation.
Buyers are usually interested in structuring the deal as an asset type transaction. Buyers are primarily concerned about inheriting any contingent liabilities flowing from the past operation of the Company. An asset transaction also enables the buyer to restate the value of the assets to fair market value and receive subsequent tax advantages.
Sellers generally prefer stock type sales of their Companies. Stock sales reduce tax liabilities for sellers while passing contingent liabilities to the buyer.
Historically, almost all sales of privately-held Companies were asset sales. In recent years, we have seen a growing number of stock sales. Buyers will typically require some funds held in escrow and tighter indemnification but this will be part of the deal negotiation.
Consult with eMerge. Is the timing right from a personal, business sector, industry, company performance and overall economic perspective? If the "stars are lined up", we can proceed to market. If not, we will say so and develop a "wait and hold" strategy with you.
Initially, eMerge will analyze all aspects of the Company to develop a professional offering memorandum known as a Confidential Business Review ("CBR"). The CBR will incorporate the tangible and intangible aspects of the business and capture it's upside value. Professionally prepared material sets the tone and first impression with premium buyers.
The eMerge M&A Process is designed to create a confidential limited auction that will maximize sales proceeds and proactively allow a seller to choose the best successor. With multiple potential buyers, the seller is in control.
eMerge actively negotiates with numerous buyers simultaneously. Having multiple options increases negotiating strength through less dependence on any one potential buyer. Experienced buyers are less likely to attempt to take advantage of a situation if they perceive that there are additional interested parties.
Analyzing and preparing a Company to enter The eMerge M&A Process is complex. Yet, a great deal of our expertise is required during the closing phase of the transaction. Once the parties have agreed on terms for a transaction and signed a Letter of Intent ("LOI"), the transaction enters the closing phase. During the closing phases the buyer conducts a due diligence review and the various contracts are written that reflect the terms from the LOI. It is during the closing phase where all details and final negotiations take place.
Although the transaction terms have been agreed upon, this is the most critical phase of the M&A process. eMerge's professionals have the experience and expertise to recognize and begin solving issues before they occur.
eMerge will assist and advise our clients through the entire process to a successful closing of the transaction.
eMerge specializes in the confidential sales of profitable, successful, privately-held companies valued between 5 million and 75 million dollars. We provide our expertise across industry lines including manufacturing, distribution, services and technology. Specialization serving this market segment is more critical than specialization serving any one industry.