Scaling Businesses for Positive Impact
Growth Consulting and Strategic M&A
Good to know
Frequently Asked Questions.
I am considering selling my company; how can you support me?
As management consultants focusing on M&A, we can support and manage the process through the following services:
- A typical M&A transaction may take between 6 and 12 months. During that time, it is quintessential that operations run smoothly and the transaction does not negatively interfere with this process. Accordingly, we ensure that you can focus exclusively on your daily business operations while we effect a successful closing of the transaction.
- Find and approach the ideal potential buyers for your company.
- Effect the best possible transaction structure and benefit realization for you and your company thanks to many years of experience negotiating and managing transactions.
- Coordinate the team of professionals, including tax advisors, accountants and lawyers to ensure that the transaction is done in your best interest.
What is the value of my company?
In any sale, the value of a business is highly dependent on the acquirer and the strategic needs as well as the perception of future, free cash flows. While we communicate with you on what we believe is the likely valuation, we rarely take the first step in giving out a price indication to acquirers. Depending on the company, the strategic value of the business can be far more than the cash flow may indicate.
Moreover, the valuation of illiquid assets is highly subjective. We help you to quantify the future operational synergies for a potential acquirer as well as making assumptions for the future of your business. Getting the right acquirer to the table and finding out what a business is worth to them and getting them to pay a premium can be particularly challenging aspects during an M&A mandate.
On top of variability in key valuation factors, sale terms such as the type of sale, the payment schedule, consulting clauses, earn-outs, and warranties can easily cause a 20-40% swing in what the seller gets to take home. With our long years of experience we will make sure the valuation, as well as the payment conditions, will be in your best interest.
As an executive or owner, does it make sense to sell the business without an advisor?
An experienced acquisition team can easily outmanoeuvre a business owner. The main focus of a business owner during the sales process should be on running the daily business as it is substantial to the projections made in the information memorandum and therefore for the valuation of the company.
Another key factor that most sellers tend to underestimate is the gruelling nature and length of the sales process, even allowing for the fact that the price and key terms have been established. Most deals take months to close even if the right buyer is identified and an LOI is agreed upon. Without capable M&A advisory, the deal-making process can be arduous and distract your attention from the business.
Great M&A experts provide the safety for you to be fully informed about the sales process on an on-going basis while giving you the freedom to concentrate purely on the day-to-day operations. They will ensure the success of the transactions and ascertain that the process advances at an appropriate pace.
What are key factors that improve the value of a business?
- Strategic fit for the acquirer
- Recurring revenues.
The reality of business sales is that the value of a business is mainly determined by the acquirer and the strategic fit of the two businesses. The same business could be viewed entirely differently by two potential acquirers depending on strategic needs and perception of future cash flows.
How long will it take to sell my business?
As mentioned above, a typical time frame is between 6 and 12 months. However, it depends on various factors, including your expectation of the value of your business, the type of business, your preferences regarding the monetary compensation and market conditions. In most instances, the business sale process for a small business can be completed in less than 6 to 9 months. The sale process for a mid-market company can be a year-long process, or more.
Depending on the business owner’s goals, geographic location, market conditions and the negotiating process, we have closed deals within as little as three to six months. As soon as we find out more about your business we provide you with a description of the process and an indicative time table for selling your company.
What can Board Advisors do to improve the valuation?
Managing the sales process and improving the valuation are the two key areas in which a competent M&A advisor can make a significant difference. For example, owners often make substantial efforts to reduce their tax liabilities. The unforeseen side effect of this is that, to a potential acquirer, the profitability of the business may appear much smaller than it really is.
Experienced advisors help you to include non-core businesses, non-cash expenses and “recast” the financial statements to get a better picture of the finances and hence fuel a more realistic valuation.
Moreover, we will help you to outline the full potential of your business. As IT and software market experts, we will quantify the synergies for potential buyers and adjust the valuation accordingly. We will put your company in the perfect spot both on an operative level as well as on an accounting basis for you to get your business the valuation it deserves.
When is it a good time to sell my business?
The right time to sell your company is when the company can demonstrate several years of consistent growth and profitability. Profitable companies attract many more potential buyers and are therefore much more likely to receive high valuations.
From our experience, we recommend that business owners think about their exit strategy as early as possible. Professionally preparing your business for a sale process is a worthwhile investment. Putting your company in the perfect spotlight for potential acquirers sometimes takes years. If time is not a critical factor, this can positively impact on the chances of a higher sales price as well as overall transaction success.
Consulting us 20 to 24 months before the planned date of sale gives you the freedom to choose the best potential acquirer for your business as well as receiving above average compensation.
What is your engagement model?
At Board Advisors we typically practice three different engagement models.
For M&A processes we offer:
- a combination of a monthly payment on an hourly basis combined with a success fee,
- fixed monthly retainers combined with a success fee.
Both expenses will be deducted from a staggered success fee dependent on the transaction value at the close of the deal.
For all the other services:
- we let you choose between an hourly charged model or the monthly invoiced retainer model, where the actual workload is cross-charged with the amount of the quarterly paid retainers.
Do you have experience outside Europe? How do you find a potential buyer in the US?
At Board Advisors, about half of all transactions closed had a cross-national element.
Typically, our clients are based in the DACH region and buyers are located in Europe (outside) DACH and the United States. We do have a network of partners globally that can help to identify and cover the entire spectrum of potential acquirers.
We are a start-up and need financing to fund our growth strategy, how can you help?
Although we are familiar with this, we do not provide consultancy services to start-ups. Focus is key and, typically, we provide services to IT and IT related companies that have a proven product and customers.
However, as we love entrepreneurs, we are always happy to provide some practical advice and, on an individual level, our partners also invest into start-ups from time to time.
Mergers & acquisitions
Stet clita kasd gubergren, no sea takimata sanctus est?
Maecenas eu placerat ante. Fusce ut neque justo, et aliquet enim. In hac habitasse platea dictumst. Nullam commodo neque erat, vitae facilisis erat. Cras at mauris ut tortor vestibulum fringilla vel sed metus. Donec interdum purus a justo feugiat rutrum. Sed ac neque ut neque dictum accumsan. Cras lacinia rutrum risus, id viverra metus dictum sit amet.
Fusce venenatis, urna eget cursus placerat, dui nisl fringilla purus, nec tincidunt sapien justo ut nisl. Curabitur lobortis semper neque et varius. Etiam eget lectus risus, a varius orci. Nam placerat mauris at dolor imperdiet at aliquet lectus ultricies.
Duis tincidunt mi at quam condimentum lobortis.
Ralf Steinemann. CEO of iTernity GmbH
„For many years, Board Advisors has guided us as a trusted advisor in various business challenges. The unique combination of a deep understanding of our market, paired with a hands-on attitude, has proven to be an ideal fit with our company.”
Götz Herzog. CEO of European Online Distribution GmbH
„By leveraging and providing access to an extensive network of relevant investor and business contacts, we were not only able to successfully raise funds for our company but also develop new business opportunities. Our executive team members highly appreciate the strategic advice from Board Advisors.”
Ralf Brinkis. Owner of acriba Service GmbH
„Brought in at a relatively late stage in our sales process, Christoph Löslein from Board Advisors ensured that my company was valued at the appropriate price. It was the best decision I could have made.”
Otto Troxler. CEO of BrainConnect AG
„When the time was right to find a new parent owner for our company, we chose Board Advisors as M&A advisor. Urs Niederberger guided us through the entire sales process with dedication, prudence and a high degree of professionalism. While the executive management team was focusing on running the business, Board Advisors drove the process to completion. We are happy to say that Board Advisors’ contribution was crucial to success.”
Peter Schildknecht. Owner of Schildknecht Agro-Trade AG
„Urs Niederberger significantly facilitated the sales process of my company. His extensive experience in M&A, both on the buy and sell side, helped to expedite the transaction and successfully close it. The distraction of the management team from running the business could be kept to a minimum.”