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Q&A with the Experts: Adams Price

Adams Price recently joined The Forbes M+A Group as a Managing Director. With over 20 years of experience in strategic planning and execution of mergers and acquisitions, Mr. Price adds yet another layer of industry expertise to Forbes M+A’s existing team of senior level advisors. We had a chance to sit down with Price and ask his advice for anyone considering selling a company.

Q: I’d like to start by asking how you got into the M&A business?

A: Well, you’ll probably be surprised to learn that I started my career designing and developing software. With a Bachelor of Science in Computer Science and Business, I spent my early days designing and writing software for several industries, such as manufacturing and distribution, financial services, mining and engineering. From there, I moved into consulting where I managed a broad range of operational activities for global, multi-million dollar companies. Working with these companies provided first-hand experience on growing company value as well as identifying and executing strategic mergers and acquisitions.  I found it was an area I enjoyed and have been working in M&A for the past 10 years.

Q: Do you think your non-traditional route to M&A provides any unique benefits for Forbes M+As’ clients?

A: Yes, definitely. I’ve been on both side of the negotiating table so I understand the drivers and desires of each side.  Plus, I have deep experience within the technology arena. This is important for clients because I can help uncover the strategic value of a business, beyond just the financial aspects.

Q: Now, tell me what you are seeing in the market today.

A:  There are a lot of companies on the market right now.  But relatively few transactions are being completed.  One can point to many reasons for the low success rate, availability of financing (or lack thereof), availability of alternative investment vehicles, etc.  But in truth, transactions for good companies – strong performing companies with good management and a strong growth trajectory – are happening every day.  And they are going at a premium.  Demand for solidly performing, growing companies is very high and the EBITDA multiples are reflecting that fact.

Q: That makes sense. Thanks. Let’s talk about business owners thinking about selling. What advice would you give them based on your experiences? 

A: Well, the absolute first step is to learn about the merger and acquisition process. Too many owners think they can complete a transaction in a few months. In reality, it can be long process, especially if you want get the best price. Sellers need to know what buyers are looking for and when the best windows of opportunity are.   When best to go to market with a company changes over time, depending certainly on the performance of the company itself but also on the market in general:  Are their acquisitive players who are active in the market?  Are there macroeconomic conditions that favor marketing a company?  Are there regulatory constraints that are hindering transactions or negatively affecting the enterprise values in an industry?  These questions and more need to be taken into consideration when thinking about marketing a company.

Which leads me to my second piece of advice – it is very important to work with a knowledgeable transaction advisor.  Talk to several firms.  Get referrals from your CPA or legal counsel on which firms to approach and why. In any case, look for processes, styles and knowledge base within an organization. You also need to make sure senior level advisors are handling your account from start to finish.

Q: Why is it so important to work with senior level advisors? 

A: Certainly senior level expertise is important in attracting the right type of buyer. But, once you get to negotiations it is absolutely critical to have advisors who can carefully prepare and review company information to ensure the highest value is honestly perceived by the buyer. Also, sellers need advisors who can carefully control the process and generate the best outcome for them. This can only be done by advisors who have completed many, many transactions.

Q: Can you tell us about how to determine value? 

A:  Yes. There are the standard factors to be considered such as the amount of cash flow and type of assets. But it is also important to put together a risk profile which looks at items such as the strength of a management team and the quality of revenues. Some questions to ask are: Is the revenue stream reoccurring or project based? Is it from 3 customers or 300 customers? How persistent will the cash flow be over time? Also, it is important to understand how the type of industry affects the value at a given time. Right now, for example, software-as-a-service has a high value, while social media is waning a little.

Q: That’s a lot of factors to consider. 

A: Yes, that’s why I say anyone thinking of selling should seek expert advice. Securing the highest premium comes down to understanding all the value drivers and how to exploit them. You need to know who the best buyers are, tailor a message for each one and then go after them.

Q: You’ve provided some great advice and given potential sellers a lot to consider. Thank you so much for your time and good luck at The Forbes M+A Group. 

 

The Forbes M+A Group Adds Transaction Veteran Advisor 
Gary Grange to Team

The Forbes M+A Group, a leading financial and transaction advisor, today announced the addition of Gary A. Grange to its team of experienced, trusted advisors. With over 32 years of experience in mid-market transactions, Mr. Grange brings a long record of success to The Forbes M+A Group. His experience in selling privately-owned companies in a wide variety of industries with valuations up to $200 million will further strengthen the firm’s ability to help buyers and sellers meet their transaction objectives.

“Throughout his career, Gary has demonstrated exceptional business acumen and understanding of how important it is for buyers and sellers to have strong, trusted relationship with their transaction advisor,” said Bob Forbes, president and chief executive officer of The Forbes M+A Group. “Forbes M+A has earned a reputation for providing every single client with cross-functional industry knowledge, an extensive network of contacts and diverse operational experience. Adding Gary to our team gives business owners another extremely compelling reason to partner with us for front line assistance on what is often a very personal endeavor.”

Prior to joining The Forbes M+A Group, Mr. Grange was executive vice president and managing director at IBG (International Business Group, Ltd.), Denver, Colorado, where for over 20 years he played a significant role in developing IBG’s stature as a national leader for private, mid-market transactions. His previous career included 11 years as management consultant with Ernst & Young in Germany and in Denver, and national VP of operations for Corporate Finance Associates. He has owned several successful private business enterprises.

“The Forbes M+A Group is built on the philosophy that buyers and sellers can benefit from relationships with highly experienced senior advisors,” said Gary Grange, advisor at The Forbes M+A Group. “This approach closely matches my own belief that the integrity of the relationship advisors have with their clients is a key factor in delivering transaction success. I’m very pleased to be joining this team of outstanding leaders and am looking forward to helping business owners achieve their goals.”

Mr. Grange graduated with a B.S. degree from Iowa State University. He is a licensed Real Estate Broker in Colorado and a member of the Association for Corporate Growth (ACG) and has been a Colorado resident for almost 30 years.

About The Forbes M+A Group

The Forbes M+A Group is a leading transaction advisor to private companies.  The firm represents and assists owners during the process of selling their businesses, merging or partnering with other companies, or growing through acquisition.  The firm also provides valuation and strategic planning services, and can facilitate the raising of debt or equity capital.  For more information, call 303-256-6768 or go to www.ForbesMA.com.

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Upcoming Event: Two Bites at the Apple

Private equity is an exit alternative that has become increasingly popular over the past five years.  An enormous amount of excess capital is available, and these financial partners have been aggressively and creatively pursuing transactions in which to deploy it.

Private equity firms make investments in operating companies for three to seven years with capital they raise through institutions, businesses, and wealthy individuals.   In many cases, private equity firms buy a partial interest in a business in order to align interests and give the existing owners partial liquidity along with a piece of potential upside.   This can be an attractive option for an owner who is not yet  ready to sell a business, but may be ready to exit in the next three to seven years.

This breakfast program will provide a view of two stage transactions from the perspective of owners who have lived through it.  Topics covered will include:

  • What is like to give up control in a partial sale?
  • What value can a private equity group bring besides partial liquidity for an owner?
  • What can go wrong and how can an owner avoid these pitfalls?

Space is limited.  Please contact Sharleen at sharleen@ForbesMA.com to reserve a spot.