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Strategic Exit Advisors Welcomes Alaina Mediratta as Investment Banking Analyst

Tue, 17 Mar 2026 16:15:20 GMT

Strategic Exit Advisors (SEA), a premier lower middle market investment bank headquartered in Ambler, PA, is pleased to announce that Alaina Mediratta has joined the firm as an Investment Banking Analyst . In this role, Alaina will support transaction execution and contribute to SEA's mission of helping entrepreneurs achieve successful exits.

Alaina brings valuable experience from Goldman Sachs, where she served as a Financial Analyst supporting the Alternative Capital Markets team. During her time there, she developed expertise in financial modeling, forecasting, and executive-level reporting—skills that translate directly to the rigorous analysis required in lower middle market M&A transactions.

Alaina earned her degree in Finance, with a minor in Accounting, from Drexel University. She is known for her focus, organization, and commitment to delivering thoughtful work. Her disciplined approach and attention to detail allow her to thrive in collaborative environments where complex problems are addressed with clarity and precision.

"I'm excited to join Strategic Exit Advisors and contribute to a team that truly prioritizes the goals of entrepreneurial business owners," said Alaina. "I look forward to applying my background in financial analysis to help clients navigate the M&A process and achieve meaningful outcomes."

Beyond her technical capabilities, Alaina brings a steady and dependable approach that aligns with SEA's commitment to supporting clients through one of the most significant transactions of their lives. Her preparation, consistency, and high standard of execution make her a strong addition to the deal team.

"We're thrilled to welcome Alaina to the SEA team," said SEA Managing Director Curt Cyliax . "Her experience at Goldman Sachs, combined with her analytical rigor and collaborative mindset, make her an excellent fit for our firm. We're confident she will make meaningful contributions to our clients and our team from day one."

Alaina is also committed to giving back to her community. She has served for three years on the board of a junior council for a charitable organization dedicated to expanding access to education in developing countries, where she has helped guide initiatives, coordinate events, and support fundraising efforts.

Outside of work, Alaina enjoys running, Pilates, and staying active. She currently resides in Moorestown with her Maltese, Buddy.

Join us in welcoming Alaina Mediratta to Strategic Exit Advisors.

About Strategic Exit Advisors

Strategic Exit Advisors (SEA) is an investment bank that helps people close the biggest deals of their lives. The firm specializes in helping entrepreneurs sell their businesses. SEA enables its clients to achieve their financial and other personal goals by creating a competitive process with strategic buyers.

You Have an Offer? We'll Help You Close It – Better.

Wed, 11 Feb 2026 15:13:35 GMT

Turning an Unexpected Opportunity Into Your Best Deal

You've just received it. That email, that phone call, or that letter of intent that changes everything. An unsolicited offer – someone wants to buy your business .

Your first instinct might be relief mixed with excitement. After years of building, grinding, and growing, here's validation that your work matters. Here's a potential exit. Here's... well, it's complicated .

Here's what happens next for most sellers: confusion. The offer looks good on the surface, but the terms are dense. The valuation seems fair, but is it really? The timeline feels rushed. The buyer seems qualified, but you're not entirely sure. And suddenly, what felt like an opportunity starts to feel like a maze.

You're not alone. Entrepreneurs who've built successful businesses often excel at what they do — running their companies. But M&A negotiations? That's a different game entirely. One with its own rules, tactics, and potential pitfalls that can cost you hundreds of thousands of dollars if navigated wrong.

The Gap Between "An Offer" and "The Right Offer"

At SEA , we understand that selling your business isn't just a financial transaction—it's an emotional journey that impacts your people, culture, and legacy. Our approach goes beyond maximizing price; we focus on finding buyers who align with your values and will honor what you've built. Through our Pay It Forward program and international buyer network, we ensure your exit creates positive ripple effects for all stakeholders.

Here's the reality: the offer on your table isn't necessarily the best offer you could get . It's just the offer you have right now.

Many buyers count on sellers accepting their initial terms without professional pushback. They structure deals to protect their interests, often at the seller's expense. They include contingencies you might not fully understand. They propose payment terms that shift risk onto you. They bundle in post-close obligations that could tie you up for years.

Without expert guidance, sellers often miss opportunities to:

Negotiate better valuation by understanding what their business is truly worth in the market
Restructure payment terms to get more cash at closing instead of deferred payments or earn-outs
Tighten representations and warranties to limit personal liability post-close
Accelerate timelines so the deal closes in 60 days and and not 6 months
Identify hidden risks in the buyer's structure, financing, or intentions

The cost? On a $10 million deal, negotiating just a few percentage points better means hundreds of thousands of dollars in your pocket. Yet most sellers negotiate these deals alone—or worse, without any real strategy.

The data proves this out: A 20-year University study found that sellers using investment bankers achieve 25% higher valuations, while Northern Trust's analysis of 4,316 deals showed advisor-represented sellers getting 1.5x higher EBITDA multiples.

Perhaps most telling? 99% of sophisticated buyers—private equity firms and strategic acquirers—use investment bankers when they sell. If the pros won't go without representation, why should you?

Introducing "Better Deal": Your Strategic Partner From Offer to Close

Strategic Exit Advisors created "Better Deal" because we recognized a specific pain point: entrepreneurs with offers in hand need fast, expert guidance to optimize their deals — without a lengthy advisory process.

You're not looking for someone to help you build a sales process from scratch. You have a buyer. You have an offer. You need someone to help you make that offer better and close it right.

That's where we come in.

Better Deal is our specialized advisor support designed for sellers exactly in your position. It's built on four core pillars:

1. Negotiate Better Terms

Our advisors have negotiated hundreds of deals. We know what's market-standard, what's aggressive, and what's unreasonable. We evaluate every component of your offer—valuation, payment structure, contingencies, earnouts, escrows, representations—and identify opportunities to improve them in your favor.

We don't just accept the buyer's first draft. We counter intelligently, prioritize what matters most, and create leverage through market insights and tactical positioning. The result? Better cash at close, more favorable terms, and structures that protect your interests.

2. Provide Expert Guidance

M&A deals are filled with jargon, complexity, and decision points that can feel overwhelming. Our team translates that complexity into clear, actionable guidance. We help you understand what you're agreeing to, where the risks lie, and what questions to ask.

We also help you avoid the common pitfalls that sellers make: moving too fast, focusing only on price, making emotional decisions, or missing deal points that matter. Think of us as your experienced guide through unfamiliar territory.

3. Close Efficiently

Time is money, and uncertainty is costly. Within 60 days, we transform your deal through a proven process: organizing and presenting your financials to maximize impact, creating competitive tension even with a single buyer, negotiating improved terms and structure, and expediting the closing process. We work directly with your legal counsel, coordinate with the buyer's team, anticipate obstacles, and keep deals moving forward. No lengthy processes. No unnecessary delays. Just focused, strategic action toward closing.

We also prepare you for what's ahead—due diligence, negotiations, final documentation—so there are no surprises.

4. Ensure Fair Treatment

Throughout the process, we make sure you're treated fairly. We educate you on your rights, identify potential risks, and ensure you make informed decisions. We ask the hard questions the buyer might not want answered. We protect your interests because our job is to represent you, not to make the buyer comfortable.

The Better Deal Difference

Here's what you get:

Market-informed valuation and negotiation strategy
Clear explanations of every deal term and its implications
Tactical guidance on what to push back on and what to concede
Experienced coordination of the closing process
Peace of mind knowing you've optimized your deal

Why does this matter? Because the difference between a good deal and a great deal often comes down to strategy and expertise. You wouldn't negotiate a major contract without legal counsel. Why negotiate the sale of your company — potentially the biggest financial transaction of your life — without expert guidance?

Your Next Step

You have an offer. You have leverage. You might just be leaving money on the table because you don't have a strategy to use it.

Let's change that. Better Deal is designed to help sellers like you turn an offer into a great deal — quickly and efficiently.

Ready to close it better?

Contact SEA today for a confidential conversation about your offer .

Call us at (215) 489-8881, or schedule a time that works for you. Let's make your deal better.

Strategic Exit Advisors Enters 20th Year of Guiding Entrepreneurs Through Life-Changing Exits

Fri, 16 Jan 2026 18:12:42 GMT

SEA Enter Two Decades of Maximizing Value, Protecting Legacies, and Championing the People Behind Every Deal

Ambler, PA – Strategic Exit Advisors (SEA) enters its 20th year of service to lower middle market entrepreneurs. Since 2007, the firm has guided business owners through one of the most significant decisions of their lives—selling the company they built—while ensuring their employees are taken care of and their legacy endures.

Founded by Curt Cyliax , a former CPA with over 40 years of experience working with entrepreneurial companies, SEA has grown from a vision to serve business owners differently into a nine-person team covering the lower middle market. The firm specializes in sell-side and buy-side M&A advisory services for companies with EBITDA ranging from $2 to $8 million, helping entrepreneurs achieve their personal and financial goals through strategic partnerships.

"When we started SEA nearly two decades ago, I understood that selling a business is about far more than a financial transaction," said Curt Cyliax, Managing Director, Strategic Exit Advisors. "It's the culmination of an entrepreneur's life's work. We've built our firm around that understanding, focusing on what matters most to our clients: taking care of their people, maintaining company culture, and preserving their legacy. Entering our 20th year, that mission hasn't changed."

To commemorate entering its 20th year, SEA has introduced a refreshed logo and brand identity — a visual representation of the firm's growth and continued commitment to the entrepreneurs it serves.

The firm enters its milestone year on the heels of significant momentum. In 2024, SEA was named among Philadelphia's 30 Fastest-Growing Companies by The Philadelphia100® Forum — the third such recognition in recent years, following a #9 ranking in 2021 and #28 in 2020. This sustained growth reflects the firm's expanding client base and deepening expertise in lower middle market M&A.

Recent transactions demonstrate the breadth of SEA's capabilities across diverse industries. In September 2025, SEA successfully represented ONExia , a Pennsylvania-based robotics system integrator and automation engineering firm, in its strategic acquisition by Doosan Robotics, a global leader in collaborative robotics solutions. The deal team also guided Raeyco Lab Equipment Systems through its acquisition by global calibration leader Trescal, advised The MNM Group Inc. in its acquisition by Lynx Equity Limited, and represented Open Systems Integrators in its partnership with Sciens Building Solutions, a Carlyle portfolio company.

SEA has significantly expanded its team to meet growing demand. In September 2024, Michael O'Donnell, CFA , joined as Managing Director, bringing over two decades of corporate finance, treasury, and investor relations experience across automotive, chemical, mining, telecom, hospitality, and education sectors. The firm also promoted Peter Hissey to Director in September 2025, recognizing his contributions since joining as a Summer Analyst and then returning as an Associate. A Wharton graduate and former Boston Red Sox organization player, Hissey has become instrumental in leading transaction execution while mentoring junior team members.

"Peter's promotion reflects not just his technical capabilities but his embodiment of SEA's belief that the right buyer matters as much as the right price," said Rob Waring , Managing Director. "His growth from Summer Analyst to Director exemplifies our commitment to developing talent from within."

Jamie Lavarnway was also promoted to Vice President, bringing her entrepreneurial background and deal execution skills to the team after contributing to key transactions including the ONExia acquisition.

SEA continues to invest in the next generation of M&A professionals through its cooperative education partnership with Drexel University and Summer Analyst program with students from institutions including University of Pittsburgh and Lehigh University. Managing Director Rob Waring was appointed to the Exit Planning Institute's Greater Philadelphia Chapter leadership team, further extending the firm's industry influence.

In July 2025, SEA announced a partnership with Women in Manufacturing (WIM ), the nation's leading trade association supporting over 32,000 women in manufacturing careers. The sponsorship underscores SEA's commitment to championing leadership development that drives business value. Founder Curt Cyliax was also appointed to the Board of Directors of the Philadelphia100® Forum in June 2024, reflecting his leadership in the regional entrepreneurial community.

SEA's Pay It Forward program , launched in 2020, continues to make an impact by supporting charitable causes important to clients following successful transactions. Recent beneficiaries include the Susan G. Komen Foundation, JPMA Cares, Philabundance and numerous community organizations across the Greater Philadelphia region.

"Our growth over the past two decades is a direct result of staying true to our mission," said Tony Parisi, Managing Director . "We understand what entrepreneurs have been through to build their companies. Our job is to make sure they get paid for it — while ensuring their employees are taken care of and their legacy endures. That focus won't change as we enter our third decade."

With an expanded team of Managing Directors, Directors, Vice Presidents, and Analysts, SEA is positioned to continue serving lower middle market entrepreneurs who are seeking strategic partners to maximize value and protect their life's work.

About SEA

Strategic Exit Advisors (SEA) is an investment bank that helps entrepreneurs with the biggest deals of their lives. The firm specializes in helping entrepreneurs achieve their goals by creating a process to identify strategic partners to help grow and scale their businesses. With deep expertise across multiple industries and transaction types, SEA guides entrepreneurs through the complex M&A process from initial offer evaluation to successful exit completion. The firm's comprehensive approach emphasizes strategic preparation, expert guidance, and emotional intelligence to maximize transaction value and achieve optimal outcomes.

For more information, visit se-adv.com or call (215) 489-8881.

SEA Welcomes Analyst Julian Ciurlino Through Co-op Partnership with Drexel University

Thu, 09 Oct 2025 06:57:32 GMT

The Strategic Exit Advisors (SEA) team is pleased to announce that Julian Ciurlino , through Drexel University’s co-op program , has joined the firm as an Investment Banking Analyst.

Julian is a rising fourth-year student at Drexel University’s Lebow College of Business majoring in Finance with a minor in Real Estate Management and Development.He is actively involved in student organizations on campus, having refounded a fraternity where he serves as Treasurer and Secretary. Additionally, Julian is an Equity Research Analyst for Drexel’s Dragon Fund , where he helps manage $5.5 million of the university’s endowment.

Prior to joining Strategic Exit Advisors , Julian began his career with the First Tee of Greater Philadelphia, where he supported the Finance and Accounting team while also coaching and mentoring youth on and off the golf course. This unique experience helped him develop both financial acumen and leadership skills. He then completed his first co-op at Hamilton Lane, where he gained valuable insights into private markets and further strengthened his foundation in finance.

Outside of the office, Julian is an avid golfer, dedicated Philadelphia sports fan, and stays active running and hitting the gym.

SEA’s partnership with Drexel University was in part inspired by Curt Cyliax , a Drexel graduate and former co-op student. SEA’s goal as a partner in this program is to provide the co-op with real work experience by integrating participants into live deals and prospect outreach. The Drexel co-op experience empowers students to succeed, allowing them to graduate with up to eighteen months of full-time experience in a professional environment.

At SEA , we recognize that meaningful work can extend well beyond the traditional boardroom or balance sheet and we are committed to helping future business leaders succeed. As partners in Drexel University’s co-op program, SEA ensures a learning environment that fully integrates the co-op analyst as a team member. We’re thankful for our nine excellent co-ops we’ve had to date and look forward to the future of the program!

To learn more about Strategic Exit Advisors or this program, call us anytime (215) 489-8881 or schedule a conversation here .

The Client Diversification Strategy: Eliminating Concentration Risk Before Sale

Wed, 08 Oct 2025 06:19:21 GMT

Executive Summary : Customer concentration risk significantly impacts deal structure and cash at close when single clients represent substantial portions of revenue, making diversification essential for maximizing upfront proceeds. A systematic diversification strategy coordinated with experienced M&A advisors transforms concentration risk into competitive advantage by building diverse client portfolios that command better deal terms with more cash at closing and less contingent consideration.

The Concentration Risk Reality

Picture this: You’ve built a thriving business generating $20 million in annual revenue. Your largest client represents 30% of that revenue — a relationship you’ve nurtured for years that’s been incredibly profitable. Then comes the M&A process, and you discover this prized relationship could slash your cash at close by millions, forcing you to accept earnouts and rolled equity instead of the immediate liquidity you expected.For lower middle market entrepreneurs, customer concentration – like founder dependency – represents one of the most significant barriers to maximizing cash at close. What seems like a testament to your business acumen becomes a structural nightmare, transforming straightforward deals into complex transactions heavy with contingencies and deferred payments.

The True Cost of Customer Concentration

When buyers evaluate acquisition targets with customer concentration, they don’t necessarily crush the headline valuation — they restructure the deal to protect themselves. That impressive purchase price suddenly becomes a mirage when only 40-60% arrives as cash at close, with the remainder tied to earnouts contingent on retaining that key client.The structural impact goes even deeper. Customer concentration narrows your buyer pool dramatically, reducing competitive tension that drives better deal terms.

Strategic buyers — typically your best deal prospects — become particularly cautious, while financial buyers demand extensive protections that worsen deal terms.

Deal structures become punitive when concentration risk enters negotiations. Extended earnouts tied to customer retention become standard, reducing upfront cash and increasing transaction uncertainty. Escrow requirements expand, and buyers demand extensive indemnification for customer-related risks. The result? What should be a triumphant exit becomes a complex, risk-laden transaction that may fail to meet your financial objectives.

Derisking Your Business Operations

The 24-Month Diversification Strategy

Smart entrepreneurs begin addressing concentration risk 24+ months before their planned exit, working with experienced M&A advisors to develop systematic diversification strategies that maximize cash at close rather than just headline valuations .

Months 1-6: Foundation and Assessment

Begin with comprehensive client portfolio analysis. Focus on understanding how current concentration levels affect potential deal structures. Your advisor brings crucial intelligence about typical earnout percentages, rolled equity requirements, and escrow terms at various concentration levels.

Map contract renewal timelines and identify potential vulnerabilities that could trigger earnout failures or escrow claims. Assess whether relationships are institutional or personal, as buyer structuring decisions often hinge on this distinction. This analysis provides the strategic foundation for targeted diversification efforts that directly improve cash at close.

Months 6-18: Active Diversification

Launch new client acquisition campaigns specifically targeting accounts that collectively improve your structural negotiating position. The goal isn’t just reducing concentration percentages — it’s building a client portfolio that allows buyers to offer more upfront cash with confidence.

Focus on securing multi-year contracts with new clients that extend beyond typical earnout periods. These commitments provide buyers comfort that reduces their need for contingent structures. Simultaneously expand services to existing smaller clients, growing these relationships to create multiple revenue pillars that support better deal terms.

Months 18-24: Portfolio Optimization and Exit Preparation

As your planned exit approaches, optimize your client portfolio with deal structure in mind. This might involve restructuring major client contracts to include assignment provisions or extended terms that reduce buyer concerns about retention risk.

Prepare documentation that demonstrates customer stability and relationship depth, ammunition for negotiating more favorable payment terms

Diversification Tactics That Maximize Cash at Close

Effective diversification focuses on creating structural advantages in negotiations. The gradual transition approach grows revenue from diverse sources while maintaining large client relationships, but packages these relationships in ways that minimize buyer risk perceptions. Contract Architecture Strategy : Transform handshake relationships into multi-year contracts with assignment clauses. These provisions directly reduce buyer anxiety about customer retention, supporting arguments for higher cash components.

Relationship Institutionalization : Shift customer relationships from individual dependencies to institutional connections. Document multiple touchpoints, integrate systems, and create switching costs that demonstrate stability regardless of personnel changes.

Revenue Predictability Enhancement : Build recurring revenue streams across your client base. Subscription models, maintenance contracts, and retainer arrangements across diverse clients provide the predictable cash flows that support upfront payments over earnouts.

The Strategic Diversification Advantage

When executed properly, diversification dramatically improves deal economics beyond headline valuations. The difference between 50% and 80% cash at close on a $100 million transaction represents $30 million in immediate liquidity — funds available for new ventures, retirement, or investment rather than trapped in earnouts that might never materialize.Diversification also improves negotiating leverage on other structural elements. With reduced concentration risk, sellers can push back on excessive escrow requirements, negotiate shorter earnout periods, and minimize rolled equity obligations. Each improvement compounds, transforming deal economics in ways that valuations alone never capture.

Taking Action with Strategic Exit Advisors

Start by conducting a thorough concentration analysis of your current client portfolio. Engage experienced M&A advisors early in the process to understand buyer perspectives, market sentiment and benchmarks specific to your industry and business size. Develop an integrated timeline that coordinates diversification efforts with your planned exit strategy.Remember: strategic diversification demonstrates management sophistication that buyers reward with more favorable deal terms . The 24-month investment required for effective diversification yields maximum ROI when coordinated with professional exit planning.

Customer concentration might not crush your valuation, but it will devastate your cash at close and saddle you with years of contingent risk.

Ready to assess your client concentration risk and develop a strategic diversification plan? Contact Strategic Exit Advisors at (215) 489-8881 for a confidential consultation about optimizing your client portfolio for optimal deal structure.

Schedule a confidential strategy session.

Essential Resources for Entrepreneurs

Whether you’ve just received an unexpected offer or are planning ahead, our “I Received an Offer, What Do I Do?” series for lower middle market entrepreneurs delivers the guidance you need to optimize your deal structure and achieve your best exit:

SEA Successfully Represents ONExia in Strategic Acquisition by Global Robotics Leader Doosan Robotics

Wed, 24 Sep 2025 09:13:34 GMT

Transaction Strengthens Doosan’s North American Market Position and Accelerates AI-Driven Robotics Solutions Strategy

Ambler, PA – Strategic Exit Advisors (SEA) , a leading lower middle market investment bank, is pleased to announce the successful completion of its representation of ONExia , a Pennsylvania-based robotics system integrator and automation engineering firm, in its strategic acquisition by Doosan Robotics , a global leader in collaborative robotics solutions. The transaction represents Doosan’s strategic expansion into the North American automation market and its evolution from hardware-focused solutions to AI-driven intelligent robotics platforms.

Founded in 1984 and headquartered in Pennsylvania, ONExia has established itself as a premier provider of end-to-end automation services, delivering comprehensive solutions from system design and manufacturing to implementation across manufacturing, logistics, and packaging industries. The company has achieved consistent average annual sales growth of in recent years, driven by strong demand for its collaborative robotic systems tailored to end-of-line processes including palletizing, box assembly, and packaging solutions.

“This is an investment in ONExia’s strengths—our people, the way we innovate, and our commitment to finding solutions that help our customers. Our customers can expect us to continue building quality automated machines, plus the added benefit of deeper innovation and global support as part of the Doosan Robotics family,” said Greg Selke, previous CEO & founder of ONExia.

Reflecting on the transaction process, Selke added, “SEA’s team guided us through every step of the process with remarkable expertise, helping us understand our true value and positioning ONExia to attract the right strategic partner in Doosan Robotics.”

ONExia’s comprehensive service portfolio encompasses advanced engineering capabilities, industry-specific robotics system development, and 25 years of accumulated automation data and project execution expertise. The company’s proven track record in delivering productivity-enhancing solutions that reduce operational costs has positioned it as a trusted partner for clients across North America’s key industrial sectors.

“This acquisition represents a transformational milestone for both organizations,” said Curt Cyliax , Managing Director at Strategic Exit Advisors . “ONExia’s strong market position in North American automation, combined with their exceptional engineering capabilities and deep industry expertise, makes them an ideal strategic fit for Doosan Robotics’ vision of becoming a global leader in Physical AI. The transaction demonstrates the significant value creation possible when strategic buyers recognize and invest in proven automation platforms.”

The acquisition is central to Doosan Robotics’ ambitious transformation strategy, which includes international acquisitions, expert recruitment, and organizational realignment aimed at leading the emerging Physical AI era. For Doosan, the ONExia acquisition provides immediate access to the North American automation market, a sector experiencing significant growth driven by manufacturing reshoring, labor shortages, and increasing demand for intelligent automation solutions.

Kevin (Minpyo) Kim, CEO of Doosan Robotics, remarked, “This acquisition marks an important milestone as we take tangible steps to strengthen our global presence, internalize AI technologies, and develop future-ready solutions. ONExia’s expertise and established position in the U.S. market will create powerful synergies.”

“Our team at SEA was able to identify and leverage the unique value drivers that made ONExia an exceptional acquisition target,” added Peter Hissey , Director at Strategic Exit Advisors. “From their four decades of automation expertise to their proprietary collaborative robotics systems and extensive project data, we positioned ONExia to attract strategic buyers seeking to expand their North American capabilities and accelerate their AI-driven solutions development.”

The transaction also enhances Doosan Robotics’ technical capabilities by integrating ONExia’s decades of accumulated automation data and project execution know-how, assets expected to directly enhance Doosan’s AI capabilities and solution development in areas where data-driven intelligence is critical. This strategic combination positions the combined organization to capitalize on the growing convergence of robotics, AI, and industrial automation.

The transaction demonstrates the continued consolidation and internationalization of the robotics and automation industry, as global players seek to expand their geographic reach and technical capabilities to serve multinational clients with increasingly sophisticated automation requirements. The deal also reflects the strategic value being placed on companies with proven AI and data assets that can accelerate the development of next-generation intelligent robotics solutions.

Strategic Exit Advisors’ deal team was led by Curt Cyliax, Tony Parisi , Peter Hissey and Jamie Lavarnway . The firm’s expertise in lower middle market M&A transactions and deep understanding of technology and automation industries proved instrumental in achieving a successful outcome for ONExia’s ownership.

About ONExia Founded in 1984, ONExia is a leading Pennsylvania-based robotics system integrator and automation engineering firm specializing in end-to-end automation services. The company delivers comprehensive solutions from system design and manufacturing to implementation across manufacturing, logistics, and packaging industries. ONExia has established a strong presence in developing collaborative robotic systems tailored to end-of-line processes and has achieved consistent growth through its focus on productivity-enhancing automation solutions. For more information, visit www.onexia.com.

About Doosan Robotics Doosan Robotics is a global leader in collaborative robotics solutions, committed to transforming into an intelligent robot solutions provider focused on AI and software-based robotics platforms. The company is advancing a multifaceted growth strategy that includes international acquisitions, expert recruitment, and organizational realignment to lead the emerging Physical AI era. Doosan Robotics develops and manufactures collaborative robots and intelligent automation solutions for diverse industrial applications worldwide. For more information, visit www.doosanrobotics.com.

About Strategic Exit Advisors Strategic Exit Advisors (SEA) is an investment bank that helps entrepreneurs with the biggest deals of their lives. The firm specializes in helping entrepreneurs achieve their goals by creating a process to identify strategic partners to help grow and scale their businesses. With deep expertise across multiple industries and transaction types, SEA guides entrepreneurs through the complex M&A process from initial offer evaluation to successful exit completion. The firm’s comprehensive approach emphasizes strategic preparation, expert guidance, and emotional intelligence to maximize transaction value and achieve optimal outcomes.

For more information, visit se-adv.com or call (215) 489-8881.

Tech-Forward Operations: How Modern Infrastructure Increases Exit Valuations

Fri, 12 Sep 2025 05:04:40 GMT

Executive Summary : Strategic technology investments increase exit valuations for lower middle market companies by demonstrating operational scalability, integration readiness, and reduced buyer risk through modern infrastructure. Technology-enabled businesses with robust customer intelligence systems, automated financial reporting, and operational automation attract more qualified buyers and command premium multiples because they amplify human capital rather than replace it. Companies combining technological capability with strong organizational culture create sustainable competitive advantages that justify superior exit valuations in today’s M&A market.

Exit Valuation Increases with Modern Infrastructure

When two nearly identical lower middle market companies go to market, why does one command a higher valuation multiple?

Increasingly, the answer lies in their technology infrastructure. Modern acquirers — whether strategic buyers or private equity firms — aren’t just evaluating your financials. They’re assessing your operational readiness for tomorrow’s challenges.

The outdated narrative suggests business owners must choose between investing in people and culture versus technology systems. This false dichotomy misses a crucial truth: the most valuable companies use technology to amplify their human capital, creating a synergistic effect that buyers recognize with premium valuations.

The Buyer's Technology Lens

Today’s sophisticated acquirers approach due diligence with clear technology integration expectations. Strategic buyers seek companies with scalable systems that can integrate seamlessly with their existing operations. They’re evaluating your data capabilities, looking for evidence that your business can contribute to operational synergies rather than create integration headaches.

During due diligence, technology deficiencies become glaring red flags.

Outdated systems, manual processes, and fragmented data create concerns about operational continuity and integration complexity. Buyers question whether they’re acquiring a growth platform or inheriting expensive modernization projects. Understanding what buyers really look for during due diligence can help you prepare your technology infrastructure for scrutiny.

Private equity firms bring their own technology lens, often requiring portfolio companies to meet specific operational standards. They prioritize businesses that can accelerate deal timelines through existing automation and reporting capabilities. A tech-ready company demonstrates the scalability and efficiency improvements that private equity values in their growth strategies.

Perhaps most importantly, modern infrastructure serves as risk mitigation for buyers. Robust cybersecurity frameworks, compliance systems, and disaster recovery capabilities address concerns about operational resilience that can derail transactions or reduce valuations.

High-Impact Technology Investments

Not all technology investments create equal valuation impact. The most effective upgrades focus on three core areas:

Customer Intelligence Systems

Enable data-driven decisions across all levels through advanced CRM platforms with analytics
Empower sales teams with deeper insights while supporting strategic planning
Provide market intelligence that buyers find invaluable

Financial Reporting Infrastructure

Real-time dashboards offer instant KPI visibility and demonstrate operational sophistication
Automated reporting shows scalability without proportional overhead increases
Financial transparency becomes crucial when positioning your company for maximum valuation

Operational Automation

Eliminates manual tasks while empowering employees with better tools
Strengthens company culture through efficiency gains and employee empowerment
Creates operational excellence that commands premium valuations

Technology-Driven Valuation Success

Real-World Impact : A $2M life science services company operating in the heavily regulated pharmaceutical industry demonstrates how systematic business improvements create buyer-ready operations. Through SEA’s strategic approach, the company consolidated fragmented financial reporting, implemented client and market segmentation, established measurable KPIs and sales pipeline tracking, and transitioned leadership from operational to strategic focus — the organized, data-driven approach that buyers expect during due diligence .

Within 10 months, these systematic improvements enabled a sale for over 3 times their initial valuation. This case demonstrates how organized, data-driven operations create the buyer confidence that translates to premium exit multiples.

The Technology-Culture Synergy Effect

The highest-performing companies recognize that technology excellence and organizational culture create a multiplier effect—quality data empowers decision-making while transparency tools reinforce company values through real-time performance visibility. Technology infrastructure becomes most valuable when it amplifies cultural strengths through employee development platforms, knowledge sharing systems, and quality management tools, creating integrated operational excellence that buyers cannot replicate by acquiring technology or talent separately. This synergy demonstrates to buyers that operational excellence is embedded in scalable processes rather than dependent on individual leaders, justifying premium exit multiples.

Quantifying Technology's Valuation Impact

The valuation premium from strategic technology investments manifests through three key mechanisms that directly influence buyer calculations.

Revenue enhancement comes through improved customer insights driving growth, enhanced market responsiveness, and increased sales effectiveness. Buyers pay premiums for businesses that demonstrate consistent customer retention improvements and competitive positioning advantages enabled by superior data capabilities.
Operational efficiency improvements translate directly to margin enhancement and scalability demonstration. Automation benefits and resource optimization show buyers that the business can grow without proportional cost increases, a key factor in private equity valuations that focus on expansion potential.

Risk reduction through business continuity planning, compliance capabilities, and cybersecurity frameworks addresses buyer concerns that can significantly impact valuations. Companies with robust operational resilience capabilities remove integration risks and regulatory concerns that otherwise create valuation discounts.

The Integrated Excellence Premium

Technology doesn’t replace the human elements that create business value—it amplifies them. The companies that achieve the highest exit valuations combine technological capability with organizational strength, creating integrated excellence that buyers recognize with premium multiples.

Strategic technology investments create compounding benefits that extend far beyond operational efficiency. They enable the data-driven decision making, scalable processes, and competitive advantages that sophisticated buyers seek in their acquisition targets. Understanding common mistakes can help ensure your technology investments translate into measurable valuation improvements.

Transform Your Technology Infrastructure Into Premium Exit Value

Technology-enabled businesses don’t just sell faster — they command the premium valuations that reward years of strategic investment and operational excellence.

Strategic technology investments require careful planning, proper implementation, and alignment with your exit timeline. The businesses that successfully combine technological capability with strong organizational culture position themselves not just for better valuations, but for competitive transaction processes with multiple qualified buyers.

Why Lower Middle Market Entrepreneurs Trust Strategic Exit Advisors

Even when owners receive direct offers for their businesses , Strategic Exit Advisors consistently enhances transaction outcomes through our proven process of identifying and maximizing technology-driven value propositions. Our market knowledge helps entrepreneurs understand which technology investments create the highest ROI for exit valuations, while our negotiation expertise ensures that operational excellence translates into superior deal terms — especially important when avoiding common valuation mistakes.

For entrepreneurs building tech-forward operations, SEA provides strategic guidance on timing technology upgrades with exit planning horizons. We help you demonstrate your operational sophistication to buyers while navigating the complex interplay between technology investments, cultural strength, and valuation maximization. Understanding what buyers really look for during due diligence ensures your technology infrastructure becomes a competitive advantage rather than a concern.

Whether you’re on the buy-side or the sell-side , our comprehensive advisory team is ready to navigate challenges, optimize strategies, and contribute to a seamless and successful exit.

Reach out to us anytime at (215) 489-8881 or schedule a confidential conversation .

Strategic Exit Advisors Promotes Peter Hissey to Director

Tue, 02 Sep 2025 09:25:00 GMT

Ambler, PA, September 2, 2025 – Strategic Exit Advisors Promotes Peter Hissey to Director

Strategic Exit Advisors (SEA), a premier lower middle market investment bank headquartered in Ambler, PA, is pleased to announce Peter Hissey has been promoted to Director at SEA. As Director, Peter will continue to lead transaction execution while taking on expanded responsibilities in business development and mentoring junior team members. His promotion underscores SEA’s commitment to promoting from within and recognizing exceptional talent.

Peter Hissey continues to distinguish himself as an exceptional lower middle market M&A advisor who exemplifies SEA’s mission. While many investment bankers focus solely on multiples and deal mechanics, Peter understands that selling a business represents the culmination of an entrepreneur’s life work — their people, their culture, and the legacy they’ve spent years building.

In practice, Peter has consistently demonstrated SEA’s core values, taking the time to understand what truly matters to entrepreneurial business owners – whether that’s ensuring their employees are cared for, finding buyers who will preserve company culture, or structuring deals that honor the founder’s vision for their business’s future. This commitment to understanding each client’s unique story and goals has made Peter instrumental in SEA’s reputation for delivering outcomes that protect what entrepreneurs value most.

“I’m honored to take on this expanded role at SEA,” said Peter Hissey. “Working with entrepreneurs during their M&A process is both challenging and rewarding, and I look forward to continuing to help our clients achieve their goals while contributing to the firm’s continued growth.”

Peter’s promotion to Director reflects not just his technical capabilities, but his embodiment of SEA’s belief that the right buyer matters as much as the right price.

“Peter has grown tremendously since his early days as a Summer Analyst,” said SEA Managing Director Curt Cyliax. “His promotion to Director reflects not only his technical capabilities but also an unwavering commitment to helping entrepreneurs achieve their exit goals. This promotion is well-deserved and represents the next logical step in what has been an impressive career trajectory.”

Senior deal team member Rob Waring , who has worked closely with Peter on numerous transactions, commented, “Peter’s ability to navigate complex negotiations while maintaining the trust and confidence of our clients is truly remarkable. His promotion to Director recognizes his growing leadership role and the significant impact he continues to make on our team and our clients’ success.”

Mike O’Donnell, another senior deal team member , added, “What sets Peter apart is his unique combination of analytical rigor and emotional intelligence. He understands that selling a business is more than just a financial transaction – it’s often the culmination of an entrepreneur’s life’s work. His ability to guide clients through this process with both expertise and empathy makes him an exceptional advisor.”

Join us in congratulating Peter Hissey on his well-deserved promotion to Director at Strategic Exit Advisors.

About Strategic Exit Advisors

Strategic Exit Advisors (SEA) is an investment bank that helps people close the biggest deals of their lives. The firm specializes in helping entrepreneurs sell their businesses. SEA enables its clients to achieve their financial and other personal goals by creating a competitive process with strategic buyers.

The Hidden Value of Proprietary Systems: Building Processes Buyers Will Pay For

Wed, 20 Aug 2025 07:12:35 GMT

The $20 Million Success Story: How Systems Create Premium Deal Structures

Consider this Case Study : When a specialty building products manufacturer recently sold for a premium structure including both cash and future equity worth potentially 3x additional value, multiple factors contributed to the exceptional outcome.

The $20+ million revenue company had invested years in implementing the EOS (Entrepreneurial Operating System) platform, creating operations that were streamlined with a competent management team, not reliant on the owner, and sales and marketing that proved repeatable, scalable, and systematic.

This systematic approach attracted 238 prospective buyers and generated 44 NDAs during the process, ultimately leading to multiple competitive offers and a premium deal structure. The buyer—a strategic acquirer backed by private equity—specifically valued the documented systems that would enable growth acceleration through new distribution channels.

Most business owners focus on revenue growth and profitability when preparing for sale, overlooking the strategic value in their operational systems. While multiple factors influence valuations, documented and repeatable processes increasingly differentiate businesses in competitive M&A processes, often determining which companies attract premium buyers and superior deal structures.

Process Categories That Command Premium Valuations

Strategic buyers pay premiums for strong systems across key operational areas, as demonstrated by the building products company’s systematic approach across multiple business functions.

Operations: Lean manufacturing, quality assurance, and inventory management systems that reduce costs and optimize cash flow. The case study company had streamlined operations that functioned independently of the owner.

Sales & Marketing: Lead generation methodologies, CRM processes, and brand frameworks that drive predictable growth. The company’s “repeatable, scalable, systematic” sales and marketing approach attracted buyer interest specifically because of its transferability.

Technology: Proprietary software, data analysis systems, and automation workflows that streamline operations and inform strategic decisions.

Human Resources: Onboarding programs, performance protocols, and knowledge transfer systems that accelerate productivity and preserve institutional memory.

Strategic Planning: Frameworks like EOS that create organizational discipline, accountability, and systematic execution. The building products owner’s “commitment to EOS platform of strategic planning and execution” was specifically cited as evidence the company was ready for sale.

Most critically, owner transition planning systems demonstrate business independence from founder involvement, directly addressing buyers’ primary concern about key person dependency.

Building Systems That Eliminate Founder Dependency

The most common valuation obstacle isn’t poor financials — it’s founder dependency. The building products case study perfectly illustrates the alternative: operations “not reliant on Owner” with “a competent management team” capable of independent execution.

Buyers heavily discount businesses where critical operations revolve around the owner’s personal involvement, viewing them as risky investments that could deteriorate post-acquisition. The building products company avoided this trap through systematic business building over a decade.

Founder dependency red flags that reduce valuations:

Key relationships maintained exclusively by the owner
Critical decisions requiring founder approval at every level
Institutional knowledge existing only in the founder’s experience
Quality standards dependent on personal oversight rather than documented processes

Breaking the dependency cycle requires systematic approaches:

Transfer customer relationships to designated team members with documented handoff processes
Create management layers with real decision-making authority and accountability systems
Document the “why” behind decisions, not just the “how,” enabling independent strategic thinking
Implement cross-training programs that eliminate single points of failure
Establish performance tracking systems that operate independent of owner involvement

The building products owner exemplified this approach, developing “a competent management team” and proving “consistent, reliable sales and marketing” processes over multiple years. The goal isn’t removing yourself entirely, but proving your company thrives because of its systems rather than despite your absence.

Strategic buyers recognize and pay premiums for businesses that demonstrate resilience through documented processes and empowered teams. As the case study shows, systematic businesses attract broader buyer interest (200+ prospective buyers approached) and command premium deal structures that include both immediate value and future growth participation.

What Makes a System “Proprietary” and Valuable

Proprietary systems encompass the methodologies, workflows, and competitive advantages that differentiate your business. Strategic buyers ask: do they enable management teams to operate without constant oversight?

Buyers seek systems that are:

Documented and repeatable
Create competitive barriers
Scale without founder involvement

High-value examples:

Customer acquisition methodologies that outperform benchmarks
Quality control processes with superior outcomes at lower costs
Supply chain optimization that reduces waste and delivery times

The distinction between informal processes and true intellectual property is crucial. Proprietary systems are formally documented, consistently applied, and create measurable value competitors cannot replicate.

Communicating System Value During M&A

Effective communication of system value begins long before buyer meetings . Create comprehensive process portfolios for due diligence review, quantify the financial impact of each system, and document scalability potential with specific growth scenarios.

Present systems value through compelling before/after case studies that highlight improvement metrics, detailed ROI calculations that connect processes to financial outcomes, and competitive advantage narratives that demonstrate market differentiation.

Address cultural integration compatibility by showing how your systems align with buyer culture and integration plans. Emphasize risk mitigation benefits, particularly how documented systems reduce post-acquisition integration risks related to culture preservation, organizational structure, and management dynamics .

Avoid common mistakes including assuming buyers will automatically recognize system value, over-complicating process descriptions with unnecessary technical detail, and failing to connect processes to measurable business outcomes.

Building Your Competitive Advantage: Close the GAP

Proprietary systems represent hidden enterprise value that strategic buyers actively seek and willingly pay premiums to acquire. Systems that enable management independence and reduce owner dependency command the highest valuations because they address buyers’ primary concerns about integration risk and operational continuity.

Begin today by:

Auditing your current processes for documentation gaps
Identifying existing competitive advantages that need formal systematization
Starting comprehensive documentation efforts

Remember: the best time to start building valuable proprietary systems was five years ago, but the second-best time is right now.

The difference between a good exit and a great exit often lies not in what you sell, but in how systematically you’ve built processes that buyers can’t replicate elsewhere. Start building that premium value today.

Why Lower Middle Market Entrepreneurs Trust Strategic Exit Advisors

Even when owners receive direct offers for their businesses, Strategic Exit Advisors (SEA) consistently enhances transaction outcomes through our proven process. Our market knowledge and negotiation expertise lead to improved terms and better overall deals – even during times of market disruption and volatility .

For entrepreneurs contemplating their next chapter, SEA provides more than just transaction support. We offer a clear, actionable path to maximizing value while managing the complex emotional and practical challenges of business transitions. Our comprehensive approach ensures that years of hard work translate into optimal outcomes for all stakeholders.

Contact us at (215) 489-8881 to schedule a confidential conversation about your business transition goals.

Essential Resources for Entrepreneurs

Founder Dependency: The Hidden Valuation Killer That Could Cost You Millions

Wed, 06 Aug 2025 07:38:43 GMT

Why Founder Dependency Destroys Company Value

The Million-Dollar Question for Business Owners: Could your business run profitably for 90 days if you were completely unreachable?

What is Founder Dependency? When entrepreneurs become the bottleneck for every client conversation, require final approval on every deliverable, and make all strategic, financial, and HR decisions – they don’t own a business, they are the business. This creates a company that cannot function without the founder’s constant involvement.

How Founder Dependency Affects Business Valuation:

Businesses with extreme founder dependency sell for significantly less than systematized companies
Market buyers recognize operational risk when a company relies entirely on one person
Founder-dependent businesses often receive valuations 30-50% below market comparables

While independent businesses in the lower middle market sell for 7-8x EBITDA, founder-dependent companies struggle to achieve 3-4x multiples. This isn’t just about money—it’s about the fundamental paradox of entrepreneurial success: the very dedication that built your business may now prevent you from successfully transitioning ownership while protecting what you’ve built.

At Strategic Exit Advisors, we understand that selling your business means more than just a financial transaction—it culminates years of hard work and dedication. The good news? There’s a systematic approach to remove yourself as the biggest risk factor in your own business, allowing you to maximize value while safeguarding your legacy and taking care of your people.

The True Cost of Being Irreplaceable as an Owner Founder

When strategic buyers evaluate your business, they’re not just assessing current performance — they’re calculating risk. Every critical function that depends on you personally represents a potential point of failure that sophisticated buyers will discount heavily in their valuation.

Valuation Impact

Strategic buyers typically offer premium valuations, but they often walk away entirely from founder-dependent businesses. They’re acquiring companies to integrate into larger operations—not to inherit a single point of failure that contradicts your exit goals.

Buyer Pool Reduction

Financial buyers like private equity firms may still engage, but they’ll apply significant risk discounts for “key person” dependency. This narrowed buyer pool reduces competition for your business, directly impacting your ability to earn top value.

Deal Structure Penalties

Founder dependency worsens deal terms beyond just purchase price:

Extended earnouts requiring 2-3 years of post-closing involvement
Larger escrow amounts and reduced upfront cash payments
Extensive employment agreements that tie you to the business long after your intended exit

These penalties fundamentally complicate the clean transition process most entrepreneurs envision.

The Founder Dependency Audit: Understanding Your Transition Goals

Where does your business stop without you? When it comes to successful M&A transactions, there’s more at stake than just financial strength and strategic planning .

Before building your roadmap to independence , you need an honest assessment of where your business truly depends on you.

This evaluation aligns with our Value Gap Assessment approach, helping you understand if your business is ready to sell while protecting the culture and people you’ve worked so hard to build.

Critical Functions Assessment

A strong and cohesive organizational culture plays a pivotal role in unlocking and maximizing value . When assessing critical functions, most founders discover they’re:

The primary customer relationship manager, handling key sales closes and major client concerns
The exclusive point of contact for critical suppliers and final decision-maker on significant issues
The go-to problem solver when operations face challenges

Relationship Dependency

Examine whether customer loyalty is tied to you personally or to your company:

Do vendors give you preferential treatment because of personal relationships?
Do customers call you directly instead of your team for issues and decisions?
Would key business relationships survive your departure?

These personal connections, while valuable, create dependency that buyers view as transition risk.

Knowledge Transfer Gap

The most dangerous risk to your legacy is institutional knowledge that exists only in your head:

Undocumented processes, procedures, and operational systems
Customer preferences, relationship histories, and market insights
Years of accumulated wisdom and decision-making experience

This knowledge represents tremendous value — but only if it can be transferred to preserve your business culture under new ownership.

Building Management Infrastructure That Honors Your Legacy

Essential Management Roles:

Operations leader who maintains day-to-day excellence
Sales manager who preserves customer relationships and drives growth
Finance professional who ensures fiscal responsibility and reporting accuracy
Service delivery expert who upholds quality standards and client satisfaction

Cultural Transition Strategy:

Shift from founder-centric to team-oriented decision-making
Maintain the standards and values that built your business
Ensure each role understands and embodies your company’s core values

Success Factors:

Create systems that enable team success, not just good hiring
Preserve what makes your business special during the transition
Align management infrastructure with M&A success requirements

Culture matters deeply in M&A success — your management team must carry forward your legacy while operating independently.

Remember, the best entrepreneurs understand that making themselves unnecessary is the ultimate expression of their success—and strategic buyers reward them handsomely for it while ensuring their life’s work continues to thrive under new ownership.

Close The Value Gap

As a founder or business owner, if you have reached the point in your entrepreneurial journey where you are ready to reap the rewards of your efforts, a sale of the business can provide the opportunity for key shareholders to cash out at a significant premium.

At a high level, transferring ownership of your business through a sale represents an opportunity to:

Build generational wealth
Continue the business legacy
Provide continued employment and growth opportunities for employees
Fund your next entrepreneurial pursuit or retirement

The risk and rewards of entrepreneurship are often not only wrought with emotional highs and lows, but part of a much bigger career and financial journey. And, it’s important to understand that selling your business is not an event, it’s a process. A critical and often overlooked first step in this process is to reach out to an investment bank to serve as your dedicated advisory team.

What’s a Readiness & Value Assessment and How Can I Get One?

SEA is pleased to offer a complimentary Readiness & Value Assessment to business owners. This analysis allows you to quantify your value gap, or any discrepancy between the perceived value and the market value of the business. The SEA team will identify the top areas that are reducing the value of your company. This discovery process takes 45 minutes to complete and there is no cost or commitment to take this first step.

Why Lower Middle Market Entrepreneurs Trust Strategic Exit Advisors

Even when owners receive direct offers for their businesses, Strategic Exit Advisors (SEA) consistently enhances transaction outcomes through our proven process. Our market knowledge and negotiation expertise lead to improved terms and better overall deals – even during times of market disruption and volatility .

Why Differentiated Companies Command Premium Offers: How Strategic Positioning Drives Higher Valuations

Fri, 25 Jul 2025 10:12:53 GMT

Executive Summary:

Strategic value delivers results — two similar project-based businesses received unsolicited offers, but Business A accepted their initial offer directly and sold 30-40% below market value, while Business B engaged Strategic Exit Advisors to create competitive bidding and sold for 20% more than their initial offer with better terms. This case demonstrates how strategic differentiation combined with professional M&A guidance creates measurable acquisition premiums, even when starting with comparable initial offers.

How Strategic Positioning Drives Higher Valuations

Two project-based businesses recently received unsolicited offers. Both had similar revenue models and operated in active M&A markets. Business A accepted their initial offer directly, selling for exactly what was offered — which analysis later showed was 30-40% below market value. Business B engaged Strategic Exit Advisors to create a competitive process, highlighting their differentiated capabilities and strategic positioning. The result? Business B sold for 20% more than their initial offer with significantly better terms, while Business A left substantial value on the table by treating their business as a commodity transaction.”

The key correction: Business A didn’t get a bad multiple compared to Business B – they both started with similar offers, but Business B’s strategic approach resulted in a 20% premium above their starting point, while Business A left 30-40% of potential market value unrealized by not optimizing their process.

What Defines True Differentiation (Beyond Just Being Different)

Buyers evaluate differentiation through specific market position indicators: specialized expertise that competitors cannot easily replicate, pricing power that demonstrates value recognition, and defensive moats that protect market position. These companies possess strategic assets that set them apart: blue-chip client relationships built on unique capabilities, supplier partnerships that provide competitive advantages, and operational excellence that drives superior results.

The critical distinction lies in being strategically positioned versus simply being different. True differentiation means customers choose you for reasons beyond price—they value your specialized capabilities, trust your expertise, or depend on your unique solutions. This strategic positioning drives buyer interest because it represents sustainable competitive advantage, not just temporary market conditions.

Companies with authentic differentiation demonstrate consistent pricing power, maintain higher margins than competitors, and show strong customer retention rates. These metrics signal to buyers that the competitive advantage is real and sustainable, justifying premium valuations.

Why Strategic Buyers Pay Premiums for Differentiated Companies

Strategic buyers pursue differentiated companies for specific acquisition strategy drivers. These companies provide immediate access to specialized capabilities that would take years to develop internally, established customer relationships in valuable niches, and proven methodologies that can be scaled across the buyer’s broader platform.

The risk mitigation benefits are substantial. Differentiated companies typically demonstrate more predictable revenue streams because their customers have fewer alternatives. Their specialized positioning reduces price pressure and competitive threats, while their proven track records indicate capable management teams that can navigate challenges effectively.

Perhaps most importantly, differentiated companies offer clear synergy realization potential. Buyers can leverage specialized capabilities across their existing customer base, integrate proprietary processes to improve overall operations, and use the acquired expertise to enhance their competitive positioning in the market.

The Strategic Advantages That Create Differentiation

Operational excellence forms the foundation of sustainable differentiation. Companies that consistently outperform competitors through superior execution capabilities, quality leadership, and efficiency advantages create value that buyers recognize and pay premiums to acquire. This excellence often includes technology integration that provides competitive advantages and proprietary methodologies that are difficult to replicate.

Customer relationship mastery represents another critical differentiator. Companies that develop deep relationships characterized by high switching costs, demonstrate superior customer acquisition and retention capabilities, and create genuine partnership dynamics with clients build defensible market positions that command premium valuations.

Innovation and intellectual property create perhaps the strongest differentiation. Whether through product development leadership, proprietary processes that deliver superior results, patent portfolios that protect market position, or ongoing R&D investment that maintains competitive edge, intellectual capital translates directly into acquisition premiums.

Building Differentiation for Premium Valuations

Strategic positioning requires identifying and developing sustainable competitive advantages . This means focusing on high-value market segments where your capabilities create the most impact, building strategic partnerships that enhance your market position, and developing proprietary methodologies that competitors cannot easily copy.

Operational excellence development involves implementing systems and processes that consistently deliver superior results. This includes achieving quality benchmarks that exceed industry standards, developing proprietary methodologies that drive better outcomes, and building operational capabilities that create sustainable competitive advantages.

Market presence enhancement amplifies differentiation through thought leadership initiatives, brand development that reinforces specialized positioning, industry recognition that validates expertise, and customer success stories that demonstrate unique value creation.

Communicating Differentiation During M&A

Preparation is critical for capturing differentiation premiums. Companies must compile comprehensive documentation of their competitive advantages, prepare detailed customer portfolios that demonstrate relationship depth and value creation, document operational advantages that drive superior performance, and create compelling narratives that articulate their strategic positioning.

Valuation justification requires presenting market comparables that show differentiation premiums, quantifying strategic value through specific examples and metrics, and documenting synergy potential that buyers can realize through acquisition.

Effective negotiation positioning leverages competitive buyer interest by emphasizing strategic value beyond financial metrics and demonstrating sustainable advantages that justify premium valuations. This approach creates competition among buyers and drives higher offers.

The Differentiation Advantage: Your Path to Premium Valuations

The key takeaways for building premium valuations through differentiation:

Strategic positioning drives premiums : Differentiated companies consistently command higher valuations than commodity competitors
Long-term investment pays off : Building sustainable competitive advantages significantly impacts exit value
Action steps for entrepreneurs : Assess your current position, identify differentiation opportunities, document strategic advantages, and engage experienced M&A advisors
Dual benefits : Differentiation improves daily operations while maximizing exit value when you’re ready to sell

Mergers and Acquisitions Guidance with Strategic Exit Advisors

When entrepreneurs in the lower middle market work with SEA , they are able to collaborate with a team of M&A experts to overcome challenges, navigate the emotional aspects of M&A , and optimize their strategic exit. At SEA, we are committed to understanding your transition goals and tailoring our process to ensure a clearly defined outcome.

Whether you’re on the buy side or the sell side , our comprehensive advisory team is ready to navigate challenges, optimize strategies, and contribute to a seamless and successful exit. Reach out to us anytime at (215) 489-8881 or schedule a conversation here.

Essential Resources for Entrepreneurs

Whether you’ve just received an unexpected offer or are planning ahead, our “I Received an Offer, What Do I Do?” series delivers the guidance you need to protect and grow your company’s value:

SEA Successfully Represents Raeyco Lab Equipment Systems in Strategic Acquisition by Global Leader Trescal

Wed, 09 Jul 2025 09:06:23 GMT

Transaction Expands Trescal’s Life Sciences Presence in Canada with Leading Laboratory Equipment Service Provider

Ambler, PA – Strategic Exit Advisors (SEA), a leading lower middle market M&A advisory firm, is pleased to announce the successful completion of its representation of Raeyco Lab Equipment Systems Management Ltd. in its strategic acquisition by Trescal , the global leader in calibration and metrology services. The transaction marks Trescal’s entry into the Canadian life sciences market and establishes two new laboratory locations in Ontario and British Columbia.

Founded in 2007 and based in Burnaby, British Columbia, Raeyco Lab Equipment Systems Management has established itself as Canada’s premier provider of laboratory and medical equipment repair, maintenance, calibration, and validation services. The company serves diverse industries including healthcare, pharmaceuticals, biopharmaceuticals, research institutions, and mining operations across Canada.

Raeyco’s comprehensive service portfolio includes analytical instrument qualification, systems validation compliant with FDA, Health Canada, and European regulatory agencies, preventative maintenance programs, and specialized equipment sales. The company’s proprietary Raeyco Labforce System enables comprehensive inventory management and maintenance of customer laboratory equipment on a secure, dedicated, and validated database platform.

“This acquisition represents a significant milestone for both organizations,” said Tony Parisi , Managing Director at Strategic Exit Advisors . “Raeyco’s strong market position in Canadian life sciences, combined with their exceptional technical capabilities and regulatory compliance expertise, makes them an ideal strategic fit for Trescal’s global expansion plans. The transaction demonstrates the value of proactive strategic planning and expert guidance in achieving optimal exit outcomes.”

Ron Raey, CEO, “Strategic Exit Advisors took the time to truly understand Raeyco’s values, vision, and long-term goals. SEA found the perfect strategic fit that shares our culture and is committed to our legacy. That alignment wouldn’t have happened without SEA’s deep expertise and tailored approach to the M&A process.”

The acquisition is part of Trescal’s record-breaking 2024 expansion strategy, which included 15 strategic acquisitions representing €65 million in combined revenue and 750 employees across Europe, Asia, Oceania, and the Americas. Trescal’s acquisition strategy focuses on strengthening its global leadership position in calibration services while expanding into complementary markets and geographies.

For Trescal, the Raeyco acquisition provides immediate access to the Canadian life sciences market, a sector experiencing significant growth driven by biopharmaceutical innovation and regulatory compliance requirements. The transaction also enhances Trescal’s North American presence and adds specialized capabilities in laboratory equipment management and validation services.

“Our team at SEA was able to identify and leverage the unique value drivers that made Raeyco an attractive acquisition target,” added Rob Waring , Managing Director at Strategic Exit Advisors. “From their ISO 9001:2015 and ISO 17025:2017 certifications to their proprietary technology platform and strong customer relationships, we positioned Raeyco to attract strategic buyers seeking to expand their life sciences capabilities.”

The transaction demonstrates the continued consolidation and internationalization of the calibration and laboratory services industry, as global players seek to expand their geographic reach and technical capabilities to serve multinational clients with complex regulatory requirements.

Strategic Exit Advisors’ deal team was led by Tony Parisi and Rob Waring, with Jamie Lavarnway providing additional transaction support. The firm’s expertise in lower middle market M&A transactions and deep understanding of technical services industries proved instrumental in achieving a successful outcome for Raeyco’s ownership.

About Raeyco Lab Equipment Systems Management Ltd. Founded in 2007, Raeyco Lab Equipment Systems Management is Canada’s leading provider of laboratory and medical equipment service, repair, calibration, and validation solutions. The company serves healthcare, pharmaceutical, biopharmaceutical, research, and industrial clients across Canada with comprehensive equipment lifecycle management services. Raeyco maintains ISO 9001:2015 and ISO 17025:2017 certifications and operates facilities in Ontario and British Columbia. For more information, visit www.raeyco.com.

About Trescal Trescal is the global leader in calibration services, providing measurement, calibration, repair, qualification, validation, and asset management services across multiple industries worldwide. Founded in 2008 and headquartered in Paris, France, Trescal operates through a network of laboratories and service centers across Europe, Asia, Oceania, and the Americas. The company serves aviation, automotive, defense, energy, food and beverage, life sciences, manufacturing, mining, and telecommunications industries. For more information, visit www.trescal.com.

About Strategic Exit Advisors Strategic Exit Advisors (SEA) is an investment bank that helps entrepreneurs with the biggest deals of their lives. The firm specializes in helping entrepreneurs achieve their goals by creating a process to identify strategic partners to help grow and scale their businesses. With deep expertise across multiple industries and transaction types, SEA guides entrepreneurs through the complex M&A process from initial offer evaluation to successful exit completion. The firm’s comprehensive approach emphasizes strategic preparation, expert guidance, and emotional intelligence to maximize transaction value and achieve optimal outcomes.

For more information, visit www.strategicexitadvisors.com or call (215) 489-8881.

Strategic Exit Advisors Partners with Women in Manufacturing (WIM) to Champion Female Leadership

Tue, 08 Jul 2025 09:34:27 GMT

Ambler, PA – July 2025 – Strategic Exit Advisors (SEA) is proud to announce our sponsorship of Women in Manufacturing (WiM) , the nation’s premier trade association dedicated to supporting, promoting, and inspiring women in manufacturing careers.

This partnership reflects our belief that successful exits start with building exceptional leadership teams. In our experience working with manufacturing entrepreneurs, companies with diverse, well-developed leadership structures consistently command higher valuations and attract more strategic buyers . By supporting WiM’s mission to advance women in manufacturing, we’re investing in the development of leadership talent that drives premium valuations.

Why This Partnership Matters

“We’re honored to support Women in Manufacturing and their mission to elevate women across all levels of the manufacturing sector,” said Curt Cyliax of Strategic Exit Advisors. “As an investment bank specializing in helping entrepreneurs with the biggest deals of their lives, we understand the importance of strong leadership and diverse perspectives in driving business success. WiM ‘s work to develop and inspire women leaders directly aligns with our values and commitment to optimal outcomes for business owners and their legacies.”

The connection between our mission and WiM’s work runs deeper than shared values. Many manufacturing companies we work with are led by entrepreneurs who understand that diverse leadership teams drive innovation, improve decision-making, and ultimately create more valuable businesses. When it comes time for these entrepreneurs to exit their companies, those with strong, diverse leadership teams often command premium valuations.

WiM’s 15th anniversary SUMMIT will take place October 12-14 at McCormick Place in Chicago, celebrating the incredible impact women have had in manufacturing while inspiring attendees to leave their own lasting legacy in the industry.

About Women in Manufacturing

Women in Manufacturing® (WiM ) is a national and global trade association dedicated to supporting, promoting and inspiring women who have chosen a career in the manufacturing industry. Founded in 2011, WiM encompasses manufacturers of all types and welcomes individuals from every job function – from production to the C-Suite. With over 32,000 members representing more than 3,000 manufacturing companies from 50 U.S. states and 65+ countries, WiM provides year-round virtual learning, networking opportunities, professional development programs, and industry resources. For more information, visit www.womeninmanufacturing.org .

About Strategic Exit Advisors

Strategic Exit Advisors (SEA) is an investment bank that helps entrepreneurs with the biggest deals of their lives. The firm specializes in helping entrepreneurs achieve their goals by creating a process to identify strategic partners to help grow and scale their businesses. SEA focuses on the transition , not just the transaction, ensuring optimal outcomes for business owners and their legacies.

SEA Advises MNM Group in Successful Acquisition by Lynx Equity Limited

Thu, 03 Jul 2025 09:44:45 GMT

Ambler, PA – Strategic Exit Advisors (SEA ) is pleased to announce it served as the exclusive financial advisor to The MNM Group Inc. in its acquisition by Lynx Equity Limited (“Lynx”) .

SEA conducted a targeted competitive process that resulted in multiple offers for MNM, a leading provider of communications and electrical network solutions specializing in low-voltage cabling, wireless infrastructure, Distributed Antenna Systems (DAS), and electric vehicle (EV) charging station installations.

Headquartered in Willow Grove, Pennsylvania, MNM operates across 42 U.S. states and Canada, serving an extensive portfolio of Fortune 100 companies and prominent commercial clients through its Design & Build and Manufacturing divisions. Led by Greg Carson and Fran Miller, MNM has earned a distinguished reputation for delivering quality, reliability, and innovative solutions within the telecommunications and IT sectors.

“We enjoyed working with the people at SEA, who helped us find a good home for our business that we were proud to build over the last 30 years. SEA distinguished themselves by really understanding the nature of our business and bringing us to market in a way that was highly constructive and practical,” shared Greg Carson, President of The MNM Group Inc. MNM’s ownership was very interested in the long-term opportunities for key employees at the company and SEA was able to react by locating a relatively rare partner that employs a “buy, hold, and build” strategy that was perfect for MNM and their valued employees. “MNM’s long-standing client relationships and national reach truly set them apart,” commented Mujtaba Abidi, Vice President of Mergers and Acquisitions at Lynx. “We’re excited to welcome Greg, Fran, and their team to Lynx and look forward to achieving even greater success together.”

The transaction was facilitated by Strategic Exit Advisors as the sell-side M&A advisor. “This acquisition exemplifies our commitment to creating competitive processes that deliver optimal outcomes for entrepreneurs seeking to transition their businesses to the right strategic partners” remarked SEA Managing Director Tony Parisi. “MNM’s national reach across 42 states and strong reputation in telecommunications infrastructure makes them an ideal addition to Lynx Equity’s diverse portfolio of successful mid-market businesses.”

About The MNM Group Inc.

MNM is a national provider of communications and electrical network solutions specializing in low-voltage cabling, wireless infrastructure, DAS, and EV charging station installations. Its Design & Build division delivers professional IT consulting, cell tower installations, and project management services, while its Manufacturing division produces custom cable assemblies for distributors and OEMs nationwide. With over 30 years of experience, MNM has grown to become one of the most diversified national service providers in the telecommunications industry.

To learn more about MNM Group Inc., please visit themnmgroup.com.

About Lynx Equity Limited

With sales in excess of CAD $900M, Lynx Equity Limited is a diversified Toronto and San Diego based private equity firm focused on acquiring small and medium-sized businesses from owners looking to retire or seeking strategic opportunities. Lynx targets acquisitions of companies with EBITDA between $2M–$6M USD and utilizes a buy-and-hold strategy.

About Strategic Exit Advisors

Strategic Exit Advisors (SEA) is an investment bank that helps entrepreneurs with the biggest deals of their lives. The firm specializes in helping owners achieve their financial and personal goals by creating a competitive process to identify the best strategic partners to help grow and scale their businesses.

Building Transferable Value: What Strategic Buyers Look For: Part 2

Mon, 23 Jun 2025 06:50:22 GMT

Listen to this article

Building Transferable Value

In Part 1 of this 2-part series, “ Building Transferable Value: What Strategic Buyers Look For ,” we explored the fundamental concept of building transferable value — the worth of your business that exists independently of your personal involvement.

We examined how strategic buyers evaluate acquisition targets and identified four critical pillars: management depth, systematized operations, diversified revenue streams , and robust financial infrastructure. These core elements transform founder-dependent companies into self-sustaining enterprises that command premium valuations.

In Part 2, we’ll dive deeper into advanced strategies that create strategic value beyond the basics . You’ll learn how to build sales infrastructure that operates without founder relationships, and position your company within high-growth markets. We’ll also explore how maintaining strong culture directly impacts your acquisition price. These sophisticated approaches attract strategic buyers willing to pay above-market premiums.

Part 2: Creating Strategic Value That Attracts Premium Offers

The most successful business exits don’t happen by accident. They result from deliberate strategies implemented years before sale, specifically designed to create the transferable value that commands premium pricing from strategic buyers. This second installment explores advanced approaches to building acquisition-ready businesses that strategic buyers willingly pay above-market prices to acquire.

Scalable Sales Infrastructure

Businesses commanding premium valuations have sales systems that function independently of founder relationships. Strategic buyers seek evidence that revenue generation will continue—and ideally accelerate—under new ownership.

Create formalized sales processes documented in comprehensive playbooks
Implement customer relationship management systems that institutionalize prospect and client information
Develop marketing automation that generates consistent lead flow without reliance on the owner’s personal network

Most importantly, establish metrics and key performance indicators that provide predictive insights into future revenue. Strategic buyers value businesses where sales forecasting demonstrates statistical reliability rather than founder intuition. This predictability significantly reduces perceived acquisition risk.

Strategic Positioning Within Growth Markets

Market positioning dramatically impacts transferable value. Businesses operating in growing sectors with favorable long-term trends command substantially higher multiples than those in declining or stagnant industries, regardless of current profitability.

Analyze your current market positioning and consider strategic pivots that align with emerging trends within your industry. Develop service offerings or product lines addressing high-growth market segments, even if they initially represent a small portion of revenue. Document these strategic initiatives and their growth trajectories in business plans and forecasts that demonstrate future potential.

Strategic buyers often acquire companies specifically to gain footholds in emerging markets. By positioning your business at the intersection of established stability and emerging opportunity, you create compelling strategic value that justifies premium acquisition pricing.

Culture and Talent Retention

While less tangible than financial metrics, company culture significantly impacts transferable value through its effect on talent retention. Strategic buyers recognize that acquisitions often fail due to post-transaction talent exodus, particularly in knowledge-based businesses.

Create formal programs building cultural continuity and employee engagement independent of founder personality
Implement retention strategies targeting key employees whose institutional knowledge is crucial for success
Document these initiatives and their effectiveness in maintaining low turnover rates

Strategic buyers pay premium valuations for companies that demonstrate talent retention through ownership transitions and cultural stability that reduces integration risks.

Building transferable value requires shifting from founder-dependency to creating an acquisition-ready enterprise by developing scalable sales infrastructure, strategic market positioning, and cultural continuity. The most successful exits result from years of deliberate planning that transforms businesses into strategic assets commanding above-market prices—not from last-minute preparation when offers arrive.

Mergers and Acquisitions Guidance with Strategic Exit Advisors

When entrepreneurs in the lower middle market work with SEA , they are able to collaborate with a team of M&A experts to overcome challenges, navigate the emotional aspects of M&A , and optimize their strategic exit. At SEA, we are committed to understanding your transition goals and tailoring our process to ensure a clearly defined outcome.

Essential Resources for Entrepreneurs

1. I Received an Offer, What Do I Do?
2. The Offer: When to Seek a Trusted Advisor
3. Demystifying Deal Points: Understanding the Essentials
4. Strategic Information Release: Timing is Everything
5. Sub-Negotiations Unveiled: Beyond the Bottom Line
6. The Art of Concluding: Expert Insights from SEA
7. Common Pitfalls: Negotiation NoNo’s You Should Avoid
8. Navigating the Psychological Terrain: Ego and Emotional Intelligence

Part 1: Building Transferable Value: What Strategic Buyers Look For

Fri, 16 May 2025 06:57:30 GMT

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When building a business, many entrepreneurs focus solely on growth and profitability. However, truly savvy business owners understand a critical distinction: the difference between creating a successful company and building transferable value that strategic buyers will pay a premium to acquire .

Transferable value represents the worth of your business independent of your personal involvement. It’s the value that remains when you, the owner, step away. Strategic buyers —whether corporate acquirers or private equity firms—assess potential acquisitions primarily through this lens, making it the single most important factor in maximizing your eventual exit.

Understanding Buyer Perspective

Strategic buyers approach acquisitions with specific motivations that shape how they evaluate your business. They typically seek businesses that complement their existing operations, provide access to new markets, offer technological advantages, or eliminate competition. Their valuation calculations factor in potential synergies and strategic advantages beyond simple financial metrics.

Synergy Evaluation:Strategic buyers meticulously calculate how your business capabilities, client relationships, and intellectual property can create multiplicative value when combined with their existing operations—often justifying premium valuations that standalone financial metrics wouldn’t support.

Risk Assessment Protocol:Sophisticated buyers employ comprehensive frameworks to evaluate acquisition risks, prioritizing concerns about customer concentration, management depth, competitive pressures, and regulatory challenges that could impact post-acquisition performance.

Integration Planning:Forward-thinking acquirers begin mapping integration scenarios during early evaluation stages, assessing cultural compatibility, systems alignment, and potential resistance points that could compromise deal value.

Talent Retention Strategy:Strategic buyers pay particular attention to your leadership team’s capabilities, assessing whether key personnel have the skills and motivation to thrive post-acquisition, often structuring retention incentives accordingly.

For these buyers, a business wholly dependent on its owner represents a significant risk. When the founder departs, critical relationships, institutional knowledge, and decision-making capabilities often leave too. This dependency dramatically reduces transferable value and can make otherwise profitable businesses virtually unsellable at premium prices.

Management Depth: The Foundation of Transferable Value

Creating a leadership team that functions effectively without owner involvement forms the cornerstone of transferable value. This requires thoughtful succession planning that reassures potential buyers about post-acquisition continuity.

Start by identifying the key functions you currently perform and systematically delegate these responsibilities to capable team members. Document this transition through formal organizational charts and clearly defined roles. Strategic buyers will scrutinize your management structure, seeking evidence that the business can thrive under new ownership.

Implement leadership development programs that prepare promising employees for greater responsibility. Consider bringing experienced executives onto your management team who have successfully navigated transitions before. Their presence signals to potential buyers that your company has the leadership infrastructure to support continued growth.

Systematizing Operations

Businesses that operate on standardized, well-documented systems command significantly higher valuations than those relying on the owner’s personal touch. Strategic buyers seek evidence that critical processes are formalized and repeatable.

Begin by mapping your key operational workflows—from sales and customer service to production and fulfillment. Document these processes in comprehensive manuals that future owners could follow. Implement technology platforms that capture institutional knowledge and standardize operations across departments.

This systematization serves two purposes: it demonstrates to buyers that the business can function smoothly post-acquisition, and it significantly reduces the perceived risk of the transition. Lower risk translates directly into higher valuations and better deal terms.

Diversified Revenue Streams

Customer concentration represents one of the greatest threats to transferable value. When a significant portion of revenue comes from a handful of clients, buyers see substantial risk. Strategic acquirers typically discount valuations for businesses where any one customer represents more than 10% of total revenue.

Develop strategies to diversify your customer base across multiple industries, geographies, and company sizes. Implement marketing systems that generate consistent lead flow independent of founder relationships. Create service or product offerings that foster recurring revenue models rather than transactional relationships.

Strategic buyers prize predictable, sustainable revenue streams. Recurring revenue models—particularly subscription-based offerings—command valuation premiums because they provide greater certainty about future cash flows. These models demonstrate that customer relationships are institutionalized within the business rather than dependent on founder connections.

Financial Infrastructure for Due Diligence

Strategic Buyer Financial Evaluation

Strategic buyers conduct rigorous financial due diligence before completing acquisitions. Companies with sophisticated financial reporting systems that facilitate this process receive higher valuations than those presenting disorganized or questionable financial records.

Quality of Earnings Analysis : Strategic buyers typically commission comprehensive quality of earnings studies to assess the sustainability and reliability of reported profits, scrutinizing revenue recognition practices, recurring vs. non-recurring income, and the consistency of profit margins across time periods.
EBITDA Normalization: Sophisticated buyers will recalculate your adjusted EBITDA by identifying and removing owner-specific expenses, one-time events, and non-operational items to determine true operational profitability that will continue post-acquisition.
Working Capital Adequacy: Buyers evaluate historical working capital trends to establish normalized levels required to operate the business, often adjusting purchase prices based on working capital surpluses or deficits at closing.
Revenue Quality Assessment: Beyond top-line numbers, buyers analyze customer concentration , contract renewal rates, pricing stability, and sales pipeline predictability to validate the sustainability of revenue streams.

Consider having your financials reviewed or audited by reputable accounting firms for the years preceding your planned exit. Maintain detailed records of all major contracts, leases, and obligations that might affect future operations.

Clean financial records with clear audit trails demonstrate professionalism and reduce perceived transaction risk. This financial infrastructure signals to strategic buyers that your company maintains the operational discipline necessary for continued success.

Building transferable value in the lower middle market requires shifting focus from founder-centric operations to creating an enterprise that functions as a self-sustaining entity. By developing management depth, systematizing operations, diversifying revenue streams, and establishing robust financial infrastructure, you create the foundation for a successful exit at premium valuations when that unexpected offer arrives.

Mergers and Acquisitions Guidance with Strategic Exit Advisors

Essential Resources for Entrepreneurs

Whether you’ve just received an unexpected offer or are planning ahead, our “I Received an Offer, What Do I Do?” series delivers the guidance you need to protect and grow your company’s value:

Maximizing Value Before an Unexpected Buyer Comes Knocking

Thu, 24 Apr 2025 11:03:26 GMT

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While an unexpected offer to purchase your business can be flattering—and even exhilarating—it’s critical to navigate the opportunity strategically. To truly maximize your company’s value and protect the legacy you’ve built, preparation and perspective are everything.

Smaller transactions in the lower middle market are currently fueling much of the M&A activity. But if you don’t run a competitive process, make no mistake: you’re a part of someone else’s .

The Risks of a One-Buyer Deal

When one buyer comes knocking—especially with no competition in sight—it’s easy to get swept up in the excitement. But these deals often benefit the buyer more than the seller. Here’s why:

The Buyer Controls the Process

With no competing offers, you lose all leverage. There’s no bidding war. No comparison. And if you’ve signed exclusivity, you’re locked in—whether the deal goes your way or not.

The Price Can Only Go Down

That generous headline number? It’s often bait. As the buyer digs into your financials, they’ll find “issues” to justify a lower price. This tactic—called re-trading—is common, especially when they know you’re not talking to anyone else.

Your Business Pays the Price

Selling a company is a full-time job. If you’re also managing day-to-day operations, performance can slip. And if your numbers start to decline, the buyer may walk away—or lower the price. Either outcome can hurt current and future opportunities.

Whether This Is Your First Offer or Your Fifth…

With the right guidance from experienced investment bankers , entrepreneurs can unlock substantial value from a sale . Whether you’re on the buy side or the sell side , understanding how to maximize M&A value helps clarify priorities and outcomes.

What’s the Current M&A Environment for Lower Middle Market Deals?

In today’s market, many unsolicited offers stem from proprietary deal flow . These off-market deals are designed to poach high-quality, well-run businesses without triggering the value-enhancing effects of a competitive process.

At SEA, we believe in empowering entrepreneurs to be prepared and protected by:

Engaging trusted M&A advisors early
Understanding true market value
Structuring deals strategically
Maintaining negotiation leverage
Avoiding unnecessary value erosion
Protecting key terms that impact your legacy
Ensuring your best exit—on your terms

The Power of Preparation

Success in M&A begins long before a buyer shows interest. Building value starts with strategic decisions, clean financials, and a healthy company culture . These foundational efforts directly impact your eventual valuation and negotiation strength.

Market Timing: A Counterintuitive Advantage

Many entrepreneurs wait for the market to “stabilize” before exploring a sale. But economic uncertainty can actually work in your favor . Here’s why:

Less competition for buyer attention
Resilience under pressure becomes a selling point
Strategic buyers get aggressive to strengthen market share
Private equity firms still need to deploy capital

For quality businesses, volatility highlights strength in ways spreadsheets never could.

Value Drivers That Attract Premium Offers

Buyers look for more than just profits. Key value drivers include:

Consistent financial performance
Clear growth trajectory
Strong competitive positioning

Depending on your industry, premium value may also come from proprietary tech, niche services, or geographic reach .

Creating Competitive Tension

That unsolicited offer? It’s a sign of market demand. Before responding:

Evaluate the seriousness of the offer
Assess the buyer’s motivations and acquisition track record
Understand if they’re strategic or financial
Confirm financial capacity and future intentions

Navigating Earnout Structures

Earnouts can bridge valuation gaps—but only if structured correctly. Protect yourself by:

Negotiating clear, achievable metrics
Retaining operational control during earnout periods

This ensures you can influence the performance tied to your payout.

Working Capital Considerations

A frequently overlooked detail: working capital adjustments . These can significantly impact your net proceeds. Know how closing-date capital levels compare to agreed-upon targets to avoid unpleasant surprises.

Due Diligence Readiness

Control the flow of information by preparing a virtual data room . Organize:

Financial statements
Legal agreements
Operational documentation

Being ready before it’s requested gives you leverage—and shows you’re serious.

Assembling Your Transaction Team

Early engagement with a trusted M&A advisor gives you an edge . But don’t stop there. Include:

M&A attorneys
Accountants with deal experience

This team is essential for evaluating stock vs. asset sale structures and optimizing tax outcomes.

Negotiating from Strength

Before entering discussions:

Define your walkaway terms
Understand the buyer’s endgame

This clarity allows you to balance price with non-financial terms that protect your legacy and priorities.

Planning for Post-Transaction Success

Purchase price is just one piece of the puzzle. Other deal elements matter, too:

Employment agreements
Escrow provisions
Indemnification clauses
Earnout terms
Rolled equity arrangements

Sub-negotiations can significantly impact the final outcome—prepare accordingly.

Next Steps with SEA’s Expert M&A Advisory Team

An unexpected offer is both a compliment and a challenge. With preparation and strategic support, you can turn that surprise into maximum value .

Our expert advisors provide:

Objective valuations
Strategic deal structuring
Negotiation expertise
Diligence management
Legal and tax optimization
Post-merger planning

You only sell your business once. Make sure it’s on your terms—with the right team in your corner.

Curious how your business’s proven results could translate to premium valuation in today’s seller’s market?

Essential Resources for Entrepreneurs

Whether you’ve just received an unexpected offer or are planning ahead, our “I Received an Offer, What Do I Do?” series delivers the guidance you need to protect and grow your company’s value:

SEA Welcomes Analyst Wiktor Szczepura Through Co-op Partnership with Drexel University

Fri, 18 Apr 2025 07:34:26 GMT

The Strategic Exit Advisors (SEA) team is pleased to announce that Wiktor Szczepura , through Drexel University ’s co-op program, has joined the firm as an Investment Banking Analyst.

Wiktor is a sophomore at Drexel University’s Lebow College of Business majoring in Finance and Accounting, with a minor in Japanese. He is actively involved in student organizations on campus by taking on leadership roles of President of the Drexel Finance and Investment Group , Market Research Analyst for the Society of Security Analysts , and External Outreach Coordinator for the Drexel Consulting Group .

Prior to joining Strategic Exit Advisors , Wiktor gained hands-on experience through internships in international markets. At MEIKO Maschinenbau GmbH in Germany, he learned valuable skills in corporate finance and accounting through analyzing sales data and evaluating financial statements. That led him to join the Polish subsidiary of MEIKO, where he specialized in market research and small businesses. Those internships sparked Wiktor’s interest in finance and led him to complete extracurricular projects related to Mergers and Acquisitions and Equity Research.

Wiktor’s hobbies include basketball, geography, and learning foreign languages that have helped him to travel to various parts of the world.

At SEA , we recognize that meaningful work can extend well beyond the traditional boardroom or balance sheet and we are committed to helping future business leaders succeed. As partners in Drexel University’s co-op program, SEA ensures a learning environment that fully integrates the co-op analyst as a team member. We’re thankful for our eight excellent co-ops we’ve had to date and look forward to the future of the program!

To learn more about Strategic Exit Advisors or this program, call us anytime (215) 489-8881 or schedule a conversation here .

Protecting Your Legacy: Key Considerations When Selling to Strategic Buyers

Mon, 31 Mar 2025 10:20:24 GMT

You’ve built more than just a business—your legacy extends beyond financial value to inspire employees and management long after your exit, providing a foundation for the company’s culture, values, and future direction .When strategic buyers come knocking with an unexpected offer , the decisions you make will determine not just your financial outcome, but the future of everything you’ve built. Understanding your options and the current landscape of strategic acquisitions has never been more critical.

The Shifting Strategic Buyer Landscape

Buyers are increasingly focusing on smaller, add-on acquisitions rather than new platform investments. According to recent market data, over 40% of lower-middle market deals in 2023 involved US public companies as buyers , with another 24% coming from non-PE-backed private companies. This shift has created a unique environment for smaller deals in the $10-25 million enterprise value range .

What’s driving this trend? With economic uncertainty lingering, private equity and strategic buyers see lower-risk opportunities in add-on acquisitions that complement existing operations rather than venturing into entirely new platforms.

Beyond the Balance Sheet: Employee and Customer Transitions

A successful transaction with the right buyer hinges on more than just financials. The timing and approach to involving your management team can significantly impact both deal outcomes and post-close success. Management team involvement can affect valuation, deal structure, and even the buyer’s perception of business continuity risks.

Consider this critical question: At what stage should key employees be informed of a potential transaction?

Early involvement risks unsettling your organization, while late involvement may leave insufficient time for thoughtful transition planning. Strategic buyers increasingly value seeing a clear continuity plan for key customer relationships and talent retention beyond financial incentives.

Cultural integration planning has emerged as a make-or-break factor in strategic acquisitions. With approximately 60% of recent lower-middle market deals involving strategic buyers, cultural alignment has become a focal point during due diligence. Successful sellers proactively address this by developing cultural integration roadmaps before they’re requested.

Deal Structures Evolving for 2025

The structure of strategic acquisitions continues to evolve. While all-cash deals are becoming more common again (nearly three-quarters of lower-middle market deals closed in 2024), strategic buyers are increasingly using sophisticated earnout mechanisms. Recent data shows that lower- middle market deals are significantly more likely to include earnouts than larger transactions, with the median earnout potential reaching 39% of closing payment in 2023.

Working capital adjustments appear in over 90% of lower-middle market deals, with approximately 60% including separate escrow provisions averaging 1.3% of transaction value. Furthermore, every lower-middle-market deal that closed in 2023 included some form of post-closing security via escrow or holdback provisions.

Preserving Your Legacy Through Post-Closing Involvement

Your involvement doesn’t need to end at closing. Strategic acquirers increasingly value transition periods where founding owners remain engaged through employment agreements, consulting arrangements, or board positions. These structures can help preserve your legacy while ensuring a smooth handoff of customer and employee relationships.

The key is designing these arrangements with clear expectations and defined timelines. Rather than open-ended commitments, successful transitions typically include specific milestones and knowledge transfer objectives. This approach protects both your legacy and your ability to eventually make a clean break.

Planning Your Next Move

As you contemplate a potential sale, consider these essential questions:

How will your management team respond to acquisition discussions, and when should they be involved?
What mechanisms can protect your employees and customers through the transition?
Which deal structure elements are negotiable versus non-negotiable for preserving your legacy?
What post-closing role would best serve both your personal goals and the business’s future?

Partnering with Strategic Exit Advisors

Our team of M&A experts specializes in helping entrepreneurs like you navigate both the financial complexities and emotional challenges of strategic exits. We take the time to understand your unique transition goals and tailor our approach to achieve clearly defined outcomes that align with your vision.

Whether you’re exploring an unexpected offer or planning a future exit, our advisory team stands ready to optimize your strategy and secure your legacy.

When entrepreneurs work with SEA , they partner with experienced M&A experts who understand both the financial and emotional aspects of selling a business .

Ready to explore how your company’s proven performance can command a premium in today’s market?

Contact us at (215) 489-8881 or schedule a conversation here .

Ready to learn more?

Whether you’ve just received an unexpected offer for your business or you’re preparing for future possibilities, our “I Received an Offer, What Do I Do?” series provides invaluable insights to help you navigate transitioning ownership of your business with confidence.

Explore the series:

Breaking Free from the Reinvestment Cycle: Strategic Options for Lower Middle-Market Business Owners

Thu, 06 Mar 2025 07:02:02 GMT

Strategic Options for Lower Middle-Market Business Owners

As a business owner, you’re intimately familiar with the constant pressure to reinvest in your company.

Every successful quarter seems to demand new equipment, technology upgrades, or market expansion initiatives. While reinvestment is crucial for growth, it shouldn’t feel like an endless treadmill you can’t step off.

In the current M&A landscape , lower middle-market business owners have more strategic options than ever before.

The Reinvestment Treadmill Isn’t Your Only Option

Understanding the Traditional Cycle

The traditional business growth model often feels like a perpetual cycle of reinvestment. You generate profits, only to immediately channel them back into the business through capital expenditures, technological updates, and operational improvements. This constant demand for resources can be exhausting, both financially and personally. While this approach has built your business to where it is today, it’s essential to recognize when this cycle may no longer serve your best interests.

The impact of continuous reinvestment extends beyond financial considerations. Many owners find themselves caught in an operational grind, managing day-to-day demands while trying to stay competitive in rapidly evolving markets. This can lead to burnout and prevent you from exploring strategic alternatives that might better align with your personal and professional goals.

Signs It’s Time to Consider Alternatives

Several indicators might suggest it’s time to explore other options:

Financial Indicators : Your business consistently generates strong cash flow, but the returns on reinvestment are diminishing
Personal Readiness : You’re seeking better work-life balance or considering succession planning
Market Timing : Your industry is experiencing consolidation or heightened M&A activity
Growth Plateaus : Traditional reinvestment isn’t yielding the same growth results it once did

Today’s Market Favors Lower Middle-Market Sellers

The current market environment presents unique opportunities for lower middle-market business owners. Strategic buyers are increasingly focused on smaller deals, with particular interest in companies valued between $10-25 million, where multiples have improved by a full point over 2023. This shift towards add-on acquisitions rather than new platform investments has created favorable conditions for sellers.

Current Market Dynamics

The M&A landscape in moving into 2025 shows several encouraging trends:

– Strategic buyers are actively seeking smaller, well-positioned companies
– Private equity firms are focusing on add-on acquisitions to existing platforms
– Recent interest rate adjustments have positively impacted deal financing
– Due diligence processes, while thorough, are more streamlined for smaller transactions

Key Deal Structure Trends

Modern deal structures offer flexibility and potential upside:

Earnouts are increasingly common, allowing sellers to benefit from future growth Working capital adjustments are standard but manageable with proper preparation Strategic buyers often bring operational expertise and market access Deal terms can be customized to align with your specific objectives

Multiple Paths Forward Exist

For entrepreneurs considering ownership transitions , there are multiple paths forward depending on their goals, timeline, and desired level of ongoing involvement. Each option presents distinct advantages and tradeoffs that warrant careful evaluation to align with both personal objectives and the company’s long-term success.

Full Exit Options

1. Strategic Sale

– Typically offers highest valuations due to synergy potential

– Clean break with immediate liquidity

– Often provides best outcome for employees and customers

2. Private Equity Transaction

– Professional management and growth expertise

– Access to capital for expansion

– Structured transition timeline

3. Management Buyout

– Preserves company culture and legacy

– Creates opportunities for key employees

– Can be combined with other financing sources

4. Family Office Partnership

– Longer investment horizon than traditional private equity

– Often more flexible in structure

– Cultural alignment potential

Partial Exit Strategies

The landscape for partial exits requires careful consideration:

Majority Recapitalization stands out as the most viable partial exit option. This structure allows you to:

– Receive significant liquidity now
– Retain meaningful ownership
– Benefit from a potential “second bite of the apple” that can exceed your initial transaction value
– Partner with experienced operators who can accelerate growth

While minority stake sales might seem attractive, they typically face challenges:

– Investors generally prefer growth capital deployment over owner liquidity
– Limited control over future direction
– Potentially complicated exit path

Key Takeaways

Breaking free from the reinvestment cycle requires careful consideration of your options and market timing. The current environment, with its focus on lower middle-market deals and improved valuations, presents an opportune moment to explore alternatives. Consider these next steps:

Assess your personal and professional goals
Evaluate your company’s market position and growth potential
Consult with M&A advisors who understand the lower middle market
Develop a strategic plan that aligns with your objectives

Remember, continuous reinvestment isn’t your only path forward. Today’s market offers multiple strategic options that could better serve your business and personal goals. The key is finding the right approach that balances immediate liquidity needs with long-term value creation opportunities.

Beyond Trust: Why Entrepreneurs Trust Strategic Exit Advisors

Even when owners receive direct offers for their businesses, Strategic Exit Advisors (SEA) consistently enhances transaction outcomes through our proven process.

Our market knowledge and negotiation expertise lead to improved terms and better overall deals – even during times of market disruption and volatility .

Our comprehensive approach ensures that years of hard work translate into optimal outcomes for all stakeholders. Contact us at (215) 489-8881 to schedule a confidential conversation about your business transition goals.

Escape the Grind: How Entrepreneurs Leverage SEA to Transition Ownership

Wed, 12 Feb 2025 10:13:35 GMT

The True Cost of Entrepreneurial Burnout

When burnout sets in, many owners make the costly mistake of rushing toward an exit , accepting the first offer that comes their way . Others go to the opposite extreme, clinging to their businesses too long , watching their energy — and their company’s value — slowly decline. Both scenarios leave significant value on the table.

The key to breaking free from this cycle lies in understanding that feeling ready to exit doesn’t mean you have to sacrifice the value you’ve built.

With proper guidance and strategic planning , entrepreneur fatigue can become the catalyst for your most successful business decision yet.

What Headwinds are Entrepreneurs Navigating Right Now?

The entrepreneurial landscape has become increasingly complex in recent years. The pandemic triggered unprecedented disruptions forcing businesses to rapidly adapt their operations and business models.

This adaptation continues as businesses face persistent challenges: interest rates impacting capital costs , fluctuations in customer spending, supply chain disruptions requiring new sourcing strategies, and the pressure to reshore operations for greater control and stability. At the same time, we’ve seen an uptick in cross-border dealmaking .

Meanwhile, the accelerating pace of digital transformation demands significant investments in technology and systems modernization, creating both opportunities and strains on resources. Many entrepreneurs find themselves at a critical juncture: invest to navigate these transitions, or consider strategic alternatives including potential exits .

In this environment, having expert guidance becomes not just valuable, but essential for making informed decisions about the future .

The Value Creation Imperative: What is PE Looking For?

Private equity (PE) firms don’t just look at your current financials – they’re searching for untapped potential that can drive significant value creation post-acquisition.

Understanding what PE buyers seek helps owners prepare years in advance, maximizing both immediate exit value and buyer interest. These key value drivers shape how PE firms evaluate acquisition targets :

Defensible Market Position – Strong competitive advantages, high barriers to entry, and established market share that protect long-term profitability
Scalable Operations – Infrastructure and systems that can support significant growth without proportional cost increases
Diversified Revenue – Balanced customer concentration with recurring revenue streams and high retention rates
Management Depth – Strong leadership team beyond the owner that can execute growth initiatives and manage day-to-day operations
Margin Expansion Potential – Clear opportunities to improve profitability through operational efficiencies, pricing optimization, or cost management
Platform Capabilities – Ability to serve as a foundation for add-on acquisitions in fragmented markets
Documented Processes – Systematized operations and controls that reduce key person risk and support consistent performance
Growth Runway – Multiple avenues for organic growth through market expansion, new products, or enhanced sales capabilities
Working Capital Efficiency – Optimized cash conversion cycle and strong cash flow generation
Technology Foundation – Modern systems and digital capabilities that can scale with growth and provide competitive advantages

While traditionally viewed as financial buyers, PE firms increasingly act like strategic acquirers by leveraging their industry expertise and portfolio companies to unlock synergies and accelerate growth through operational improvements, technological advancement, and market expansion.

Understanding and effectively communicating these value drivers is crucial for maximizing your company’s potential in the eyes of PE buyers. This is where the expertise of an experienced investment banking team becomes crucial – helping you identify, enhance, and articulate these key value drivers throughout the transaction process.

Executing Your Best Exit with an Optimized Deal Structure

When it comes to transaction execution, Strategic Exit Advisors’ experience proves invaluable. SEA excels at identifying and screening potential buyers, ensuring that only serious and qualified candidates move forward. Their deep understanding of deal structures helps optimize terms for both immediate and long-term value, considering tax implications and other financial factors.

SEA’s negotiation expertise often proves crucial during this phase. They act as a buffer between sellers and buyers, maintaining professional detachment while pushing for optimal deal terms. Their management of the due diligence process helps prevent deal fatigue and maintains momentum toward closing.

Why Lower Middle Market Entrepreneurs Trust Strategic Exit Advisors

Escape the Grind: How Entrepreneurs Leverage SEA to Transition Ownership

Wed, 12 Feb 2025 09:45:20 GMT

The True Cost of Entrepreneurial Burnout

The key to breaking free from this cycle lies in understanding that feeling ready to exit doesn’t mean you have to sacrifice the value you’ve built.

With proper guidance and strategic planning , entrepreneur fatigue can become the catalyst for your most successful business decision yet.

What Headwinds are Entrepreneurs Navigating Right Now?

In this environment, having expert guidance becomes not just valuable, but essential for making informed decisions about the future .

The Value Creation Imperative: What is PE Looking For?

Private equity (PE) firms don’t just look at your current financials – they’re searching for untapped potential that can drive significant value creation post-acquisition.

Defensible Market Position – Strong competitive advantages, high barriers to entry, and established market share that protect long-term profitability
Scalable Operations – Infrastructure and systems that can support significant growth without proportional cost increases
Diversified Revenue – Balanced customer concentration with recurring revenue streams and high retention rates
Management Depth – Strong leadership team beyond the owner that can execute growth initiatives and manage day-to-day operations
Margin Expansion Potential – Clear opportunities to improve profitability through operational efficiencies, pricing optimization, or cost management
Platform Capabilities – Ability to serve as a foundation for add-on acquisitions in fragmented markets
Documented Processes – Systematized operations and controls that reduce key person risk and support consistent performance
Growth Runway – Multiple avenues for organic growth through market expansion, new products, or enhanced sales capabilities
Working Capital Efficiency – Optimized cash conversion cycle and strong cash flow generation
Technology Foundation – Modern systems and digital capabilities that can scale with growth and provide competitive advantages

Executing Your Best Exit with an Optimized Deal Structure

Why Lower Middle Market Entrepreneurs Trust Strategic Exit Advisors

From Unexpected Offer to Strategic Exit: Maximizing Value

Fri, 31 Jan 2025 10:06:16 GMT

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The phone call or email arrives unexpectedly – someone, maybe Private Equity, wants to buy your business. For many entrepreneurs, this exciting moment marks the beginning of a complex journey that can either lead to exceptional value creation or alternatively, to leaving significant money on the table.

Receiving an unexpected offer signals a pivotal moment: while validating your company’s value, it requires careful evaluation and strategic planning to maximize the opportunity. The path forward to sell your business requires a balance of objective analysis and expert guidance in what will be closing the biggest deal of your life.

What if I Have Already Received an Offer for My Business?

As we enter 2025, post-election clarity, falling interest rates, and recent data show strong economic indicators for increasing M&A activity . For resilient organizations with strong fundamentals and culture, this environment presents exciting transaction opportunities.

However, the complexity and high stakes of selling a business in the lower middle market requires expert guidance – going it alone puts your transaction at risk.

First Steps: Beyond the Initial Excitement

When that unexpected offer arrives , resist the urge to dive straight into negotiations. Even seasoned entrepreneurs – who’ve mastered routine business negotiations – can find themselves outmatched when it comes to negotiating M&A transactions .

Understanding the Offer Type

Formal offers (LOIs/term sheets) outline specific valuation and structure
Informal inquiries via email/phone are exploratory
Be wary of “fishing expeditions” masked as formal offers

Managing Information Flow

Use staged disclosure based on buyer’s demonstrated commitment
Establish controlled data rooms to monitor information access
Request reciprocal information to evaluate buyer capability
Time the release of performance data strategically
Customize NDAs with protective clauses for employees and customers

The initial response sets the tone for negotiations. Professional guidance helps protect sensitive information while maintaining negotiating leverage.

The Current Market Landscape

Strategic buyers and private equity firms are both focusing on add-on acquisitions in the lower middle market. This trend creates opportunities for smaller businesses that complement existing portfolios, though PE’s slower capital deployment has impacted overall deal velocity.

The investment banking team at Strategic Exit Advisors leverages its expertise to help business owners optimize valuations and navigate transactions with both PE firms and strategic acquirers , ensuring the best fit for each client’s unique situation.

Strategic Considerations for Entrepreneurs in 2025

The current market environment presents unique considerations that should influence your response strategy:

Interest Rate Impact: With the Federal Reserve’s recent rate cuts, deal structures and valuations are evolving. Cash deals are becoming more prevalent, making up nearly three-quarters of lower middle-market transactions.
Buyer Dynamics: Strategic buyers are particularly active, accounting for about 60% of lower middle-market deals. Understanding their motivations – whether strategic synergies or platform building – can significantly impact negotiation strategy.
Deal Structure Trends: Recent data shows increased use of earnouts and escrow provisions in lower middle-market deals, with earnout potentials reaching up to 39% of closing payments in some cases.

Maximizing Value Through SEA’s Professional Guidance

While the temptation to handle negotiations directly can be strong, data consistently shows that professional guidance leads to better outcomes . Recent market analysis reveals that lower middle-market deals often involve complex structures that can significantly impact final value:

90% include working capital adjustments
Nearly all deals include some form of post-closing security
Earnout structures are more common and larger than in bigger deals
Special escrow provisions are increasingly prevalent

Professional advisors bring crucial market knowledge and negotiating leverage that can help optimize these components. They can also create competitive tension – even with a single buyer – through market validation and alternative options exploration.

Building Your Response Strategy: SEA’s Better Deal

While buyers actively pursue “off-market” deals, their goal is clear: acquire quality businesses at favorable valuations.

SEA has responded to this market phenomena by offering a new service: we call it our “Better Deal.” We take the existing offer you have, and we make it better. We put parameters on the timing, we drive deadlines, we push for market terms, and we analyze and present the financial data in a way that buyers can easily digest and not so easily chip away at in diligence. We deal with these buyers everyday. We know where and how to push to make sure you get the best deal for your company. Ask us about our better deal experience .

When entrepreneurs work with SEA , they partner with experienced M&A experts who understand both the financial and emotional aspects of selling a business .

Ready to explore how your company’s proven performance can command a premium in today’s market?

Ready to learn more?

Explore the series:

Riding the M&A Wave: Industry Consolidation Trends to Watch in 2025

Fri, 17 Jan 2025 08:37:44 GMT

Executive Summary

The M&A landscape entering 2025 shows renewed momentum, particularly in the lower middle market where strategic buyers now drive 60% of deal activity. Key trends include improved multiples in the $10-25M enterprise value segment, continued interest in add-on acquisitions by PE firms, and evolving deal structures and working capital adjustments. With stabilizing interest rates and increasing buyer appetite, 2025 presents compelling opportunities for well-prepared business owners to achieve premium valuations.

M&A Trends to Watch in 2025

The M&A landscape in early 2025 shows encouraging momentum, building on the gradual recovery seen throughout 2024. Looking back , the known variables including, geopolitical conflict and the interest rate environment have remained top of mind for businesses in the lower middle market.

What Were the Fed Rate Cuts In 2024?

2024 saw the Federal Reserve shift to an easing cycle with multiple rate cuts throughout the year as inflation pressures moderated.

September 2024: The Fed cut rates by 0.50%
November 2024: The Fed cut rates by 0.25%
December 2024: The Fed cut rates by another 0.25%, setting the target rate at 4.25% to 4.50%

With a new administration entering the White House and monetary easing opening up mergers and acquisitions activity is expected to increase and businesses with strong fundamentals will continue to reap the benefits–selling at premiums.

The Return of Strategic Buyers

One of the most notable trends has been the increasing presence of strategic buyers in the market, particularly in the lower middle market.

Data from recent market reports shows that approximately 60% of lower middle-market deals in 2024 involved strategic buyers, with large public companies driving much of this activity. This trend is expected to continue into 2025, as corporations look to fuel growth through acquisitions rather than organic expansion alone.

Size Matters: The Sweet Spot in Deal Values

The market has shown a clear preference for smaller, strategic acquisitions rather than mega-deals. This shift has been particularly evident in the $10-25 million enterprise value range , where deal multiples have improved by a full point compared to 2023. This trend suggests that 2025 could be an especially opportune time for owners of businesses in this segment to consider their exit options.

Private Equity’s Evolution

Private equity firms have adapted their strategies , focusing more on add-on acquisitions for existing portfolio companies rather than new platform investments. This approach has led to a slower return of capital to investors but has created opportunities for smaller businesses that complement existing PE portfolios. Looking ahead to 2025, PE firms will likely continue this strategy with a gradual return to platform acquisitions as market conditions improve.

Industry Consolidation Opportunities

Several sectors are prime for consolidation in 2025:

Technology Services: With digital transformation continuing across industries, tech service providers are attractive targets for both strategic buyers and PE firms.
Healthcare Services: The ongoing evolution of healthcare delivery models is driving consolidation in this sector.
Manufacturing: Supply chain reorganization and automation needs are creating opportunities for strategic combinations.
Professional Services: Firms are looking to expand capabilities and geographic reach through strategic acquisitions.

Deal Structure Trends

The market has evolved to accommodate both buyer and seller interests in creative ways:

Working capital adjustments are present in about 90% of lower middle-market deals
Cash remains the dominant form of consideration, with three-quarters of deals in 2024 being all-cash transactions

Looking Ahead: What Business Owners Should Know

For business owners contemplating an exit in 2025, several factors deserve attention:

Preparation is Key : The current market favors well-prepared sellers with clean financial records and strong operational metrics.
Timing Considerations : With interest rates expected to stabilize and potentially decrease further, 2025 could offer more favorable conditions for sellers.
Strategic Positioning : Understanding where your business fits in the broader consolidation landscape can help maximize value.
Professional Guidance : The complexity of deal structures and increased buyer due diligence makes experienced M&A advisors more valuable than ever.

Seizing the Moment in Lower Middle Market with SEA

As we step into 2025, the M&A market shows promising signs of increased activity , particularly in the lower middle market. While global economic and political uncertainties remain, the combination of strategic buyer interest, improving financing conditions, and evolving deal structures suggests a positive environment for business owners considering their exit options. Those who prepare well and time their market entry thoughtfully may find 2025 offers attractive opportunities to realize value from their years of building successful enterprises.

Actively tracking M&A trends and partnering with seasoned advisors is critical for maximizing exit value , whether you’re looking to sell now or in the coming years – timing your market entry is key to optimizing outcomes.

For business owners who’ve built resilient operations , current market dynamics present a unique opportunity. The combination of active buyers seeking quality assets and fewer sellers in the market creates optimal conditions for well-prepared businesses.

At Strategic Exit Advisors , our approach combines deep industry expertise with sophisticated risk management strategies, consistently delivering premium valuations through our extensive network of strategic buyers who recognize the true value of resilient businesses.

When entrepreneurs work with SEA , they partner with experienced M&A experts who understand both the financial and emotional aspects of selling a business .

Ready to explore how your company’s proven performance can command a premium in today’s market? Contact us at (215) 489-8881 or schedule a conversation here .

Economic Uncertainty: Turn Market Volatility into a Selling Advantage

Mon, 16 Dec 2024 09:59:09 GMT

“I’m waiting for the market to stabilize before selling,” is a common refrain we hear from business owners in the lower middle market. Smart buyers recognize that companies proving their resilience during tough times are worth their weight in gold, and for owners considering an exit, this creates an unexpected opportunity. While others hesitate, business owners on the sell-side in the lower middle market are discovering that market volatility can actually enhance their company’s attractiveness to qualified buyers .

Market headwinds haven’t deterred buyers . They’re actively pursuing businesses that showed resilience during uncertainty – and paying premiums to acquire them. For owners of proven performers, this creates an ideal window for maximizing exit value.

The Strategic Advantage of Market Volatility in the Lower Middle Market

Market uncertainty actually drives sophisticated buyers to become more active, not less. Private equity firms sitting on record amounts of dry powder are hunting for businesses that demonstrate staying power. Strategic buyers, flush with cash, seek acquisitions that can weather storms. This flight to quality means proven performers command premium multiples, while weaker companies get overlooked.

The current environment serves as the ultimate stress test, revealing businesses with genuine competitive advantages and robust fundamentals. Companies maintaining consistent performance through turbulent times demonstrate the kind of resilience that buyers will pay a premium to acquire. This dynamic creates a unique opportunity for business owners who have built operations capable of thriving in any market condition.

What Makes Your Business Attractive in Uncertainty

Buyers are laser-focused on five qualities that command premium valuations today:

Proven Cash Flow Resilience : Consistent profitability and margin maintenance through market downturns demonstrate operational strength more powerfully than historical performance during good times
Diverse Customer Base : Revenue spread across multiple industries and clients provides natural hedging against sector-specific disruptions
Battle-Tested Leadership : Management teams with proven crisis navigation capabilities showcase the adaptability crucial for long-term success
Operational Agility : The ability to quickly pivot operations, adjust cost structures, and modify service delivery methods in response to market changes
Strong Market Position : Competitive advantages through proprietary technology, brand recognition, or market share that provide defensible barriers to entry and sustainable growth potential

Preparing Your Entrepreneurial Business for Sale

Success requires meticulous preparation. Start with solid financial records – buyers scrutinize everything in uncertain markets. Document your operational efficiency improvements and cost management successes. Show how you’ve mitigated risks through diversified supply chains and robust systems.

Demonstrate efficient working capital management through streamlined inventory and collections processes. Most importantly, continue executing your growth strategy – buyers pay premiums for expansion potential, even in tough markets. Strategic initiatives that showcase your business’s ability to capture new opportunities, even during uncertainty, can significantly impact valuation.

Your preparation should include detailed analysis of working capital requirements and trends. Efficient inventory management, accounts receivable processes, and vendor relationships demonstrate financial discipline and operational expertise. These elements become increasingly important as buyers scrutinize every aspect of potential acquisitions during volatile periods.

Structuring Deals in Today’s Market

Creative deal structures can help bridge valuation gaps while protecting your interests. Consider approaches that address market concerns while maximizing seller value:

Earnouts : Performance-based payments tied to EBITDA, revenue, or other growth targets. We only like this when the earnout is above and beyond the baseline valuation expectation.
Seller Notes : Deferred payments that bridge valuation gaps while providing tax advantages
Rollover Equity : Retaining ownership stake to participate in future upside
Employment/Consulting Agreements : Structured transition periods with performance incentives

Deal innovation becomes essential in changing markets. Buyers may propose creative structures that help mitigate their perceived risks while still delivering the value you deserve. Understanding these options and their implications for your exit becomes crucial for achieving optimal outcomes.

The Time to Act is Now

For business owners who’ve built resilient operations , current market dynamics present a unique opportunity. While less prepared competitors wait on the sidelines, your demonstrated stability and growth potential can command premium valuations. The combination of active buyers seeking quality assets and fewer sellers in the market creates favorable conditions for well-prepared businesses.

At Strategic Exit Advisors , we specialize in transforming these market challenges into advantages for entrepreneurial companies with EBITDA between $2-8 million. Our approach combines deep industry expertise with sophisticated risk management strategies, consistently delivering premium valuations through our extensive network of strategic buyers who recognize the true value of resilient businesses.

When entrepreneurs work with SEA , they partner with experienced M&A experts who understand both the financial and emotional aspects of selling a business .

Ready to explore how your company’s proven performance can command a premium in today’s market? Contact us at (215) 489-8881 or schedule a conversation here .

The Power of Professional Guidance in M&A: A Tale of Two Exits

Thu, 21 Nov 2024 14:18:11 GMT

For business owners, unsolicited offers can be both exciting and daunting . While they may seem like golden opportunities, how can you be sure you’re getting the best deal? For entrepreneurs, you only get one chance to sell your business . Make sure you have the right team in your corner to maximize your chances of success.

This case study underscores the critical importance of having a strong M&A advisory team that intimately understands the nuances of the lower middle market, where complexities often require specialized knowledge and experience to navigate successfully.

Setting the Stage: Two Similar Businesses, Two Different Paths

Our story begins with two businesses, both operating with project-based revenue models in active M&A markets. Each company had received unsolicited offers and found themselves at a crossroads. Both had multiple shareholders, including retiring founders and day-to-day leaders interested in future growth. With two Letters of Intent (LOIs) in hand, each company faced a crucial decision: accept one of the offers or explore other options.

This is where their paths diverged, leading to dramatically different outcomes.

Business A: The Direct Approach

Business A decided to accept one of the unsolicited offers without engaging professional M&A advisors. They chose to close the deal directly with the buyer, likely attracted by the seeming simplicity and speed of this approach.

The result? Business A sold for the exact value of the initial LOI offer. While this might seem like a positive outcome on the surface, SEA’s analysis estimated that these offers were actually 30-40% below market value. The closing process dragged on for over four months, longer than the owners had anticipated.

Business B: The Strategic Approach with SEA

In contrast, Business B chose to engage Strategic Exit Advisors to manage their sale process. SEA immediately implemented a strategic approach:

They organized the company’s financial information, presenting it in a way that highlighted the business’s strengths and potential.
They established an accountable process for buyers, ensuring serious and qualified potential acquirers.
Most importantly, SEA introduced genuine competition and negotiated with potential buyers to improve offer terms.

The outcome for Business B was markedly different. They sold for 20% more than the initial offer, with desired terms related to representation and warranty insurance, rolled equity into the larger company, and favorable non-compete terms for minority owners. The entire process, from SEA’s engagement to closing, took just three months.

The buyer for Business B was a professional entity backed by Private Equity, providing not just a higher price but also a better strategic fit. Despite paying a higher purchase price due to SEA’s involvement, the buyer recognized the value of the process. They even stated, “After going through Due Diligence with Strategic Exit Advisors, we are adopting many of their suggestions and recommendations for improved efficiency in our deal closing process.”

The SEA Difference: A Closer Look

What exactly did SEA do to achieve these superior results for Business B? Our process included:

Providing a market read of value: SEA’s expertise allowed them to accurately assess the true market value of the business.
Organizing and effectively presenting financial information : This step is crucial in helping potential buyers understand the full value of the business.
Implementing a competitive bidding process: By creating competition, SEA was able to drive up the offer price.
Conducting thorough vetting of potential buyers: This ensured that only serious, qualified buyers were considered.
Negotiating improved terms and structure : SEA’s experience allowed them to secure terms that were more favorable to the sellers.
Expediting the closing process: Despite achieving a better deal, SEA managed to close the sale faster than Business A’s direct approach.

Lessons Learned: The Value of Professional M&A Advisors

This tale of two exits powerfully illustrates the significant value that engaging professional M&A advisors like Strategic Exit Advisors can bring to a business sale, even when unsolicited offers are on the table.

For Business A, the desire to avoid uncertainty and quickly close a deal led to leaving substantial value on the table. Their sale price was significantly below market value, and the process took longer than expected.

Business B, on the other hand, benefited greatly from SEA’s expertise. Not only did they achieve a 20% higher sale price, but they also secured better terms, found a more suitable buyer, and closed the deal more quickly.

Navigating the M&A Minefield: Avoiding Common Pitfalls

The contrasting outcomes of Business A and B highlight a crucial aspect of M&A transactions in the lower middle market: the importance of avoiding common pitfalls . These can include undervaluing the business, overlooking key terms in the deal structure, or failing to create competitive tension among buyers.

SEA’s involvement in Business B’s sale process demonstrates how expert guidance can help sidestep these issues. By accurately assessing market value, negotiating favorable terms, and fostering competition among buyers, SEA helped Business B avoid the pitfalls that often plague inexperienced sellers in the lower middle market.

Moreover, SEA’s experienced team understands that selling a business isn’t just a financial transaction—it’s an emotional journey . For many entrepreneurs, their business represents years of hard work, personal sacrifices, and realized dreams. The M&A process can be an emotional rollercoaster, filled with uncertainty, stress, and difficult decisions. SEA’s advisors not only navigate the financial complexities but also provide steady, objective guidance through the emotional terrain of letting go and transitioning to a new chapter. This emotional support can be crucial in helping owners make clear-headed decisions and maintain confidence throughout the sale process.

The Bottom Line

Selling your business is a once-in-a-lifetime event with high stakes, and as this case study demonstrates, the guidance of experienced M&A advisors like Strategic Exit Advisors can significantly enhance your outcome through comprehensive market valuation, buyer vetting, and deal structuring. Remember, you only get one shot at selling your business—ensure you have seasoned professionals in your corner to maximize your success and optimize your legacy.

Next Steps With Strategic Exit Advisors

When entrepreneurs work with SEA , they are able to collaborate with a team of M&A experts to overcome challenges, navigate the emotional aspects of M&A , and optimize their strategic exit. At SEA, we are committed to understanding your transition goals and tailoring our process to ensure a clearly defined outcome.

SEA’s “Pay It Forward” Program and Association Headquarters Support JPMA Cares

Wed, 20 Nov 2024 06:39:53 GMT

Ambler, PA – Strategic Exit Advisors (SEA) along with Association Headquarter’s principals Bob Waller and Mike Dwyer are proud to announce a charitable donation to JPMA Cares as part of SEA’s Pay It Forward program . This donation follows SEA’s role as exclusive advisor to Association Headquarters (AH) in its successful recapitalization with Corridor Capital .

“The Pay It Forward initiative exemplifies the kind of values-driven business practices that resonate deeply with us at AH,” remarked AH’s Owner Bob Waller. SEA’s commitment to giving back aligns perfectly with our own ethos of community support. This donation to JPMA Cares not only celebrates our successful recapitalization but also reinforces the importance of corporate social responsibility. It’s heartening to see how our business milestone can translate into tangible support for such a worthy cause.”

“We are honored to support JPMA Cares through our Pay It Forward program,” said Rob Waring . “This initiative allows us to extend the positive impact of our work beyond the business realm and into the communities our clients care about deeply.”

The Pay It Forward program, launched in January 2020, embodies SEA’s commitment to supporting community endeavors that matter to their clients. Inspired by a family-operated business client’s annual $100,000 donation to programs worldwide, SEA recognized an opportunity to make a positive impact beyond their advisory services.

The recapitalization of Association Headquarters with Corridor Capital marks Corridor’s entry into the Association Management services sector as its seventh platform investment in its current fund. This strategic collaboration aims to enhance AH’s services, explore acquisitions, and solidify its market position.

SEA’s Pay it Forward program gives back to charities that are important to our clients. It continues to be overwhelmingly received by our entrepreneur clients who generously donate their own time and money to both global and community charities. By Paying it Forward, we hope to play a small part in making the world a better place.

About Strategic Exit Advisors

About JPMA Cares

JPMA Cares contributes to the long-term success of babies and young children by reducing barriers to healthy development, ensuring fundamental needs are met, and promoting a safe and nurturing environment for them to learn and grow. JPMA Cares is a 501(c)(3) charitable organization, founded by JPMA (the Juvenile Products Manufacturers Association) and supported by the broader baby and children’s products industry.

About Association Headquarters

Association Headquarters has more than four decades of offering comprehensive association management and project-based / consulting services to national and international associations and nonprofit organizations.

About Corridor Capital

Corridor Capital, LLC is a private equity firm that provides capital, operational support and strategic guidance to lower middle-market business services companies. Corridor manages committed funds on behalf of a diverse investor base, many of whom bring a deep understanding of and valuable relationships in the firm’s investment sectors.

The Impact of Sell Side Quality of Earnings in M&A Transactions

Thu, 14 Nov 2024 04:40:45 GMT

Unlock Your Company’s True Value: The QoE Analysis Advantage

As an entrepreneurial business owner who’s invested significant time, capital, and effort into building your company, have you wondered why some deals close, but many do not? Or how your company would fare under the scrutiny of Due Diligence? The number one reason why deals do not close once in Due Diligence is issues with financial reporting. As a way to combat this issue, SEA recommends a sell-side Quality of Earnings (QoE) to all its clients.

The deal team at Strategic Exit Advisors understands how a well-prepared QoE can help get ahead of potential issues and provide credibility to compiled or even reviewed financials. In the lower middle market, entrepreneurial businesses often lack the robust financial infrastructure of larger corporations and there are fewer third parties digging into the financials at a deep level.

Strategic Exit Advisors guides business owners through this critical process, leveraging their deep industry expertise to work with QoE providers to highlight your company’s financial strengths and growth potential.

In this space, a comprehensive QoE report bridges critical information gaps, providing the financial clarity and credibility that sophisticated buyers demand. It’s not just a document; it’s a powerful tool that accelerates the due diligence process and increases the certainty of a deal closing.

Understanding Sell-Side Quality of Earnings Reports: What is a QoE Report?

A Quality of Earnings report is an independent, in-depth analysis of a company’s financial health and earnings sustainability. Unlike standard financial statements, a QoE report delves deeper, examining the quality and consistency of a company’s earnings over time, reporting on trends in clients, employees and future opportunities.

The QoE Process: Key Steps

1.Preparation :

Engage an independent firm
Define scope and timeline

2. Data Gathering :

Collect financial documents and operational information

3. Financial Analysis :

Review historical performance
Analyze revenue recognition and expense categorization

4. Operational Assessment :

Evaluate key business drivers and industry trends

5. Adjustments :

Identify and normalize non-recurring items and owner-related expenses

6. Risk Evaluation :

Assess internal controls and potential liabilities

7. Reporting :

Compile findings and prepare executive summary
Develop strategies for addressing buyer concerns

The Sell-Side Perspective

When prepared from the sell-side , a QoE report becomes a powerful tool for companies looking to present themselves in the best possible light to potential buyers. It’s not about embellishing the truth, but rather about providing a comprehensive, transparent view of the company’s financial situation.

The Critical Role of QoE in M&A Transactions: Behind the Numbers

One of the primary functions of a sell-side QoE analysis is to identify and explain any potential issues that might affect the company’s valuation. This can include:

Revenue Recognition Discrepancies: Ensuring that revenue is being recorded accurately and in compliance with accounting standards.
Non-Recurring Income: Highlighting any one-time costs that may have artificially deflated earnings.
Aggressive Accounting Practices: Identifying any areas where the company may have not been in alignment with the Generally Accepted Accounting Principals (GAAP).

By bringing these issues to light proactively, sellers can address potential buyer concerns head-on, potentially saving time and preserving value during negotiations.

Influencing Valuation and Deal Terms: Benefits for Sellers

A thorough QoE analysis can significantly impact company valuation and deal terms by providing a clear picture of sustainable earnings. This proactive approach offers several advantages:

Improved Deal Dynamics :

More accurate pricing that can withstand diligence
Potentially more favorable terms for sellers
Faster due diligence process

2. Highlight Financial Strengths :

Showcase consistent revenue growth and strong cash flow
Demonstrate effective cost management and robust financial controls

3. Address Concerns Preemptively :

Explain performance fluctuations and one-time events
Demonstrate sustainability of key revenue streams

4. Streamline the M&A Process :

Reduce due diligence time
Build trust through transparency
Potentially close deals faster

By leveraging a sell-side QoE analysis, sellers can position their company favorably, maintain control of the narrative, and facilitate a smoother transaction process.

Challenges and Considerations for Lower Middle Market Entrepreneurs

Balancing Transparency and Positioning

While a sell-side QoE report aims for transparency, sellers must also consider how to present information in the most favorable light. This delicate balance requires careful thought and often the guidance of experienced M&A advisors.

Timing Considerations

When it comes to lower middle market M&A, timing is everything . Deciding when to prepare and share a QoE report can be crucial. Too early, and it may become outdated; too late, and it may not have the desired impact on the deal process.

Next Steps with Strategic Exit Advisors

For entrepreneurial businesses navigating the complexities of M&A, a sell-side Quality of Earnings report can be a game-changer.

By providing a clear, comprehensive view of a company’s financial health and earnings sustainability, it empowers both sellers and buyers to make more informed decisions. For sellers, it’s an opportunity to put their best foot forward, addressing potential concerns proactively and highlighting their financial strengths. While preparing a QoE report requires investment of time and resources, the potential benefits in terms of smoother transactions, better valuations, and more favorable deal terms make it an invaluable tool in the M&A toolkit.

Companies considering a sale would do well to consider this powerful tool as part of their preparation strategy, potentially paving the way for more successful and lucrative transactions.

At SEA , we’ve developed robust strategies to navigate these challenges, transforming potential obstacles into strategic advantages through our network of local experts, deep cultural understanding, and sophisticated risk management approaches.

We specialize in investment banking services for entrepreneurial companies with EBITDA ranging from $2 million to $8 million. Our tailored approach focuses on identifying and engaging strategic buyers who recognize the full value of your business, often resulting in higher multiples.

Our deep bench of M&A experts brings years of experience across industries and verticals to successfully navigate deals.

Connect with us now at (215) 489-8881 or schedule a confidential conversation .

Act Now: Leveraging Your Post-COVID Resilience for a Strategic Exit

Thu, 07 Nov 2024 07:25:19 GMT

If your business survived—or even thrived—during the disruptions of COVID, you’re sitting on untapped value that buyers are eager to acquire. The pandemic created a natural selection process in the business world, and your company’s survival has proven something invaluable: exceptional resilience. This quality now commands a premium in the “new normal” M&A market, but the window of opportunity won’t stay open forever.

Despite higher than historical interest rates and economic uncertainty, buyers are actively seeking businesses that demonstrated adaptability during a crisis. For owners of these resilient enterprises, the time for a strategic exit is now.

The Value of Post-COVID Resilience

The pandemic revealed which businesses could truly adapt, making resilience a key driver of M&A valuations. Companies that maintained or grew market share during the crisis demonstrated their worth through operational agility and decisive leadership. Strong cash flow management coupled with service innovation didn’t just ensure survival—it transformed these businesses into prime acquisition targets . Buyers now prioritize proven resilience, recognizing it as the best predictor of future performance during market disruptions.

Assessing Your Readiness for a Strategic Exit

Several key indicators suggest your business might be primed for a strategic exit. Companies that have maintained or improved their financial performance post-COVID while successfully implementing digital transformation initiatives are particularly well-positioned.

Businesses that successfully diversified revenue streams, expanded their customer base, and slashed operational costs have emerged as premier acquisition targets. When coupled with market leadership, these achievements signal the perfect timing for a maximum-value exit.

Timing is crucial in the M&A market. With many buyers holding significant capital and seeking strategic acquisitions, businesses that can demonstrate post-COVID success are particularly well-positioned. A comprehensive post-COVID health check should evaluate your company’s operational efficiency, market position, and growth potential through the lens of potential buyers, considering both immediate value and future scalability.

Preparing Your Business for a Strategic Exit

Maximizing your company’s exit value in today’s market requires demonstrating both resilience and innovation. Buyers are particularly focused on how businesses navigated recent market disruptions, making it essential to showcase your adaptability and strategic foresight.

Document Your Pandemic Response
Detail successful pivots and innovations
Showcase management’s crisis navigation
Map your growth trajectory through recovery
Demonstrate Financial Resilience
Track revenue stability from the crisis
Highlight effective cost management
Show working capital optimization
Showcase Operational Improvements
Digital workflow implementations
Remote work infrastructure
Supply chain optimizations
Customer service innovations
Strengthen Management Structure
Define clear leadership roles
Document key processes
Create succession plans
Ensure post-sale continuity

By focusing on these key areas and maintaining detailed documentation of your company’s evolution, you’ll be better positioned to attract premium valuations from strategic buyers and private equity firms who increasingly prioritize proven resilience and adaptability in their acquisition targets.

Navigating the M&A Process: The SEA Advantage

Today’s M&A landscape demands a more sophisticated approach, especially for entrepreneurial companies with $2-10M in EBITDA. Buyers now conduct deeper evaluations across multiple dimensions: digital capabilities, operational resilience, and scalability potential. This heightened scrutiny makes professional guidance not just valuable, but essential.

Strategic Exit Advisors brings distinctive expertise to entrepreneurs in this complex environment:

Value-Driven Process
Collaborative strategy development
Clear timeline management
Proactive value enhancement
Comprehensive buyer targeting beyond obvious competitors
Strategic Buyer Engagement
Controlled information sharing
Direct owner-buyer conversations
Thorough buyer qualification
Focus on cultural alignment

Our entrepreneur-centric approach combines deep market knowledge with personalized guidance, ensuring both maximum value realization and legacy preservation. By anticipating challenges and managing complex negotiations, we help transform the M&A process from overwhelming to achievable, while maintaining focus on your ultimate objectives.

Has Your Business Already Received an Offer?

While an unsolicited offer signals your business’s attractiveness, it’s crucial to recognize that single-buyer scenarios rarely maximize value . A professional M&A process creates competitive tension and typically yields significantly higher valuations while protecting your interests throughout the transaction.

Business Owners: The Time to Act Is Now

Lower middle market business owners : your company’s demonstrated resilience through market disruptions, combined with enhanced operational capabilities, creates a compelling value story that makes your business an attractive acquisition target.

With deep expertise in guiding entrepreneurial companies in the lower middle market, Strategic Exit Advisors helps translate your business resilience and success into maximum value during exit.

Our proven process combines thorough market analysis with personalized guidance, ensuring your company’s story resonates with qualified buyers while preserving your legacy – contact us today to explore how we can help navigate your strategic exit.

The key is to act while your pandemic response and recovery story remains relevant and compelling. By partnering with experienced M&A advisors like Strategic Exit Advisors, you can ensure your business’s value is properly positioned and communicated to potential buyers. Their expertise can help translate your post-COVID success story into maximum value during a strategic exit.

Transitioning Ownership with SEA

SEA’s deep bench of advisory experts have the operational experience to navigate challenging market cycles and produce exceptional outcomes.

Entrepreneurial-minded business owners can maximize their exit options by partnering with an advisory team that understands market dynamics, emphasizes quality, and is able to adapt deal structures to current market conditions.

When entrepreneurs work with SEA, they are able to unlock significant value through M&A. Whether you find yourself on the buy side or the sell side of a transaction the first step toward realizing your financial goals is to speak with an experienced senior-level advisor.

At SEA , we listen to you to understand your transition goals and tailor our process to execute a clearly defined outcome. Call us anytime (215) 489-8881.

Need time? Schedule a conversation here.

Strategic Exit Advisors Named Among Philadelphia's 30 Fastest-Growing Companies

Thu, 24 Oct 2024 09:29:02 GMT

PHILADELPHIA, PA — Strategic Exit Advisors (SEA), a leading investment bank specializing in entrepreneur-focused M&A advisory services, has been recognized as one of the top 30 fastest-growing companies in the Philadelphia region by The Philadelphia100® Forum .

The Philadelphia100® identifies and honors the 100 fastest growing, privately held entrepreneurial companies in the Greater Philadelphia Region. This is not SEA’s first recognition by the prestigious program – the firm ranked #9 in 2021 and #28 in 2020, demonstrating a consistent pattern of strong growth. This latest top 30 placement in 2024 further solidifies SEA’s position as one of the region’s fastest-growing companies.

“This recognition reflects our commitment to helping entrepreneurs achieve successful transitions through strategic partnerships,” said Rob Waring , Managing Director at Strategic Exit Advisors . “Our growth is directly tied to our unique approach of focusing on both the transition and transaction aspects of M&A deals, ensuring our clients achieve their personal and professional goals.”

SEA’s inclusion in the top 30 fastest-growing companies showcases the firm’s success in creating value for business owners seeking strategic exits . The firm’s comprehensive approach includes identifying strategic partners who can help scale businesses while preserving their legacy and culture.

As a member of The Philadelphia100® Forum , SEA continues to support entrepreneurs through buy-side and sell-side transactions, while gaining access to an exclusive community of growth-oriented leaders. This recognition is a testament to the dedication of SEA’s growing team of M&A professionals, whose commitment to client success has fueled the firm’s continued expansion and excellence in Lower Middle Market investment banking services.

About Strategic Exit Advisors

Strategic Exit Advisors (SEA) is an investment bank that helps entrepreneurs with the biggest deals of their lives. The firm specializes in helping entrepreneurs achieve their goals by creating a process to identify strategic partners to help grow and scale their businesses. SEA focuses on the transition, not just the transaction, ensuring optimal outcomes for business owners and their legacies.

About The Philadelphia100® Forum

The Philadelphia100® Forum is the exclusive membership organization where Philadelphia100® CEO winners and other growth-oriented leaders meet for meaningful connections, peer-to-peer learning, and growth opportunities. The Forum continues the legacy of the Philadelphia100®, one of the most sought-after awards for fast-growing companies in the region.

SEA’s "Pay It Forward" Program and Neu Dynamics Corporation Support Susan G. Komen Foundation

Tue, 08 Oct 2024 09:31:11 GMT

Ambler, PA – Strategic Exit Advisors (SEA) is proud to announce a charitable donation to Susan G. Komen Foundation following the successful completion of a new partnership between its client Neu Dynamics Corporation and NDC International , collectively “Neu Dynamics,” and Diamond Fund Partners.

The Susan G. Komen Foundation’s mission is to save lives by meeting the most critical needs in our communities and investing in breakthrough research to prevent and cure breast cancer.

Pictured from L to R: Sheri Hartsoe, Kevin Hartsoe , Geoff Fisher , Peter Hissey, Curt Cyliax and Jamie Lavarnway.

The SEA team, led by Curt Cyliax , Peter Hissey , and Jamie Lavarnway , played a crucial role in facilitating both the business partnership and the charitable donation.

The successful partnership and charitable donation were celebrated at a closing dinner attended by key figures from Neu Dynamics and Strategic Exit Advisors, along with their spouses and representatives from Antheil, Maslow & MacMinn . The event underscored the personal and community-oriented nature of this business partnership and philanthropic effort.

Curt Cyliax, leading the SEA team with Peter Hissey and Jamie Lavarnway, remarked, “This gathering celebrated more than a successful deal. It recognized the broader impact we can have when professionals, families, and community members come together. We’re thrilled to have found the right partner for Neu Dynamics’ growth and to support the Susan G. Komen Foundation through our Pay it Forward program. It’s a testament to how business success can create positive change in our communities.”

The Pay it Forward Program allows SEA to support charities that are important to their clients, amplifying the impact of their clients’ philanthropic efforts. In this case, the donation to the Susan G. Komen Foundation aligns with the foundation’s mission to save lives by meeting critical needs in communities and investing in breakthrough research to prevent and cure breast cancer.

By Paying it Forward, SEA aims to play a significant part in making the world a better place, one successful business transaction at a time. The company plans to continue this program, supporting various charities chosen by their clients following successful exits and partnerships.

About Neu Dynamics

Neu Dynamics Corporation (NDC) specializes in the design and manufacturing of precision molds and dies for the medical, commercial, and semiconductor industries. The company’s services include electrode manufacturing, contract molding and mold prototyping, insert and injection molding and rapid tooling prototyping.

NDC International (NDCI) is a value-add distributor of semiconductor equipment working with global companies such as HANMI and Boschman Technologies. It works primarily with equipment for electronics assembly.

About Diamond Fund Partners

Diamond Fund Partners (DFP) is a Family Office formed out of a multi-billion dollar business serving the engineering, technology, and services sectors. DFP focuses on partnering with successful founder and family-owned businesses, prioritizing building long-lasting relationships that address succession planning needs.

About SEA

SEA Welcomes Analyst Valeriya Moroz Through Co-op Partnership with Drexel University

Tue, 08 Oct 2024 07:37:31 GMT

The Strategic Exit Advisors (SEA) team is pleased to announce that Valeriya Moroz , through Drexel University ’s co-op program, has joined the firm as an Investment Banking Analyst.

Valeriya Moroz is pursuing a major in Finance with a double major in International Business at Drexel University’s Lebow College of Business . Valeriya also obtained her Real Estate License, reflecting her interest in different financial sectors and understanding diverse asset classes.

Prior to joining Strategic Exit Advisors , Valeriya gained valuable experience as a Tax Accountant at Leaf Commercial Capital, where she completed property tax returns and managed client billing for equipment leasing. Prior to being a Tax Accountant, she held a position at Kroll Bond Rating Agency as a CMBS Subscription Analyst, where she would update and process reports for clients who were interested in commercial mortgage-backed securities. She continued to work at Kroll part- time as she was pursuing her degree full time.

In her free time, she enjoys traveling, discovering new restaurants, staying active, and spending quality time with her family, friends and dog.

At SEA , we recognize that meaningful work can extend well beyond the traditional boardroom or balance sheet and we are committed to helping future business leaders succeed. As partners in Drexel University’s co-op program, SEA ensures a learning environment that fully integrates the co-op analyst as a team member. We’re thankful for our seven excellent co-ops we’ve had to date and look forward to the future of the program!

To learn more about Strategic Exit Advisors or this program, call us anytime (215) 489-8881 or schedule a conversation here .

Unlocking Global Value: Cross-Border Deals in Lower Middle Market M&A

Tue, 01 Oct 2024 11:28:29 GMT

Expansion Strategies: Cross-Border Deals Reshaping Lower Middle Market M&A

International business isn’t just for big companies anymore. Small firms are going global by leveraging the power of M&A . It’s not easy, but it’s where the growth is. We’re seeing a sea change in how companies think and operate.

As companies seek to expand their horizons and capitalize on international opportunities, the landscape of mergers and acquisitions (M&A) is undergoing a significant transformation.

Lower middle market companies offer large international firms a potent blend of growth potential, niche expertise, and operational agility at a relatively affordable price point. These smaller enterprises serve as strategic gateways to new markets, technologies, and talent pools, enabling larger companies to swiftly diversify their offerings, enhance innovation, and strengthen their competitive position in the global marketplace.

The Driving Forces Behind Cross-Border Transactions

Several key factors are propelling this trend towards international deals:

1.Globalization and Technological Advancements

The world is more interconnected than ever before, thanks to rapid advancements in technology and communication. These developments have made it easier for businesses to operate on a global scale, regardless of their size. Lower middle market companies can now easily identify potential partners or acquisition targets in foreign markets, conduct due diligence remotely, and manage international operations with greater efficiency.

2. Access to New Markets and Customers

One of the primary motivations for cross-border deals is the opportunity to tap into new customer bases. By acquiring or merging with a foreign company, businesses can quickly establish a presence in new markets, leveraging existing distribution networks and customer relationships. This strategy can be particularly effective for companies looking to expand into rapidly growing emerging markets.

3. Diversification of Supply Chains

Recent global events, such as the COVID-19 pandemic and geopolitical tensions, have highlighted the importance of resilient supply chains. Cross-border deals offer companies the chance to diversify their supplier networks, reducing dependence on any single region and mitigating risks associated with disruptions in specific markets.

4. Acquisition of Unique Technologies or Expertise

In many cases, cross-border transactions are driven by the desire to acquire specialized technologies or expertise that may not be readily available in the domestic market. This is especially true in sectors like technology, biotechnology, and advanced manufacturing, where innovation often occurs in clusters around the world.

5. Regulatory Arbitrage Opportunities

Different countries have varying regulatory environments, which can create opportunities for businesses to optimize their operations. Cross-border deals may allow companies to take advantage of more favorable tax structures, labor laws, or industry-specific regulations in certain jurisdictions.

6. Enhanced Competitiveness in Global Markets

As markets become increasingly global, even smaller companies need to think internationally to remain competitive. Cross-border transactions can help lower middle market firms achieve the scale and capabilities necessary to compete effectively on the world stage.

Navigating the Complexities of International Deals

While the potential benefits of cross-border transactions are significant, they also come with unique challenges that require specialized expertise. Investment banks and M&A advisors working in this space must be well-versed in a range of complex issues:

International Tax Structures

Cross-border deals often involve intricate tax considerations, but mastering these complexities can unlock significant value. While understanding tax implications across multiple jurisdictions requires expertise, it’s crucial for structuring transactions efficiently and avoiding costly pitfalls.

Navigating issues such as transfer pricing, withholding taxes, and intellectual property treatment may seem daunting, but the potential for tax optimization and increased deal value makes it a worthwhile investment. Firms that successfully manage these intricacies can gain a competitive edge, potentially saving millions in taxes and creating more lucrative deal structures. The challenge of international tax planning, when approached strategically, often transforms from a hurdle into a powerful tool for value creation in cross-border M&A.

Foreign Investment Regulations

Many countries have regulations governing foreign investment, particularly in sensitive industries or those deemed crucial to national security. Dealmakers must be familiar with these regulations, which can vary significantly from one country to another, to ensure compliance and avoid potential roadblocks.

Cultural Differences in Business Practices

Cross-border transactions offer a unique opportunity to blend diverse cultural heritages and organizational cultures and philosophies into a unified, stronger whole.

Success hinges on recognizing and harmonizing differences in negotiation approaches, decision-making processes, and business customs, transforming potential obstacles into valuable assets.

Effective leaders in cross-border M&A actively seek to understand and integrate these differences, fostering an environment where diverse perspectives drive innovation and growth. By prioritizing cultural unification , companies can prevent deal-derailing conflicts and lay the foundation for a more resilient, globally-minded organization poised for long-term success.

Global Due Diligence Processes

Conducting thorough due diligence is challenging enough in domestic transactions, but it becomes even more complex in cross-border deals. This process may involve navigating different accounting standards, legal systems, and regulatory environments. Additionally, language barriers and limited access to information can further complicate the due diligence process.

The Evolving Landscape of Lower Middle Market M&A

As cross-border transactions become increasingly common in the lower middle market, several trends are shaping the landscape:

Rise of Specialized Advisors: There’s a growing demand for M&A advisors with specific expertise in cross-border transactions and deep knowledge of particular regions or industries.
Technology-Enabled Deal Making: Advanced data analytics, virtual data rooms, and AI-powered due diligence tools are streamlining the process of international deals, making them more accessible to lower middle market firms.
Increased Focus on Post-Merger Integration: With the complexities involved in cross-border transactions, there’s a growing emphasis on planning for successful post-merger integration from the early stages of deal-making.
Emergence of Cross-Border Private Equity: Private equity firms are increasingly looking beyond their home markets for investment opportunities, driving deal activity in the lower middle market.

Cross-border transactions represent both an opportunity and a challenge for lower middle market companies and their advisors. As the global business landscape continues to evolve, mastering the intricacies of international deals will be essential for success. Those who can effectively navigate the complexities of cross-border M&A will be well-positioned to help their clients capitalize on the vast opportunities presented by the global marketplace.

For investment banks and M&A professionals operating in this space, staying ahead of the curve requires continuous learning and adaptation. By developing expertise in international tax structures, foreign investment regulations, cultural nuances, currency risk management, and global due diligence processes, advisors can provide invaluable guidance to their clients in an increasingly interconnected world.

As we look to the future, it’s clear that cross-border deals will continue to play a pivotal role in shaping the lower middle market M&A landscape. Companies that embrace this trend and seek out opportunities beyond their borders will be best equipped to thrive in the global economy of tomorrow.

Strategic Exit Advisors: Your Gateway to Global Growth Through M&A

We recognize that cross-border M&A, while offering exciting opportunities, can raise concerns about regulatory compliance, cultural integration, and financial risks.

Our deep bench of M&A experts brings years of experience across industries and verticals to successfully navigate deals. We understand the unique challenges and tremendous potential that come with expanding beyond your domestic market. From identifying ideal overseas partners to managing intricate cross-border negotiations, SEA provides the expertise you need to thrive in the global marketplace.

Whether you’re seeking to access new markets, acquire cutting-edge technologies, or diversify your supply chain, SEA aligns our process with your unique global aspirations. We empower you to make informed, high-value decisions that propel your business onto the world stage.

Ready to grow without borders? Connect with us now at (215) 489-8881 or schedule a confidential conversation .

SEA Represents OSI in Strategic Partnership with Sciens

Thu, 19 Sep 2024 09:10:07 GMT

Ambler, PA, June 26, 2024 Strategic Exit Advisors (SEA ) is pleased to announce that New Jersey-based Open Systems Integrators (OSI) has entered a strategic partnership with Sciens Building Solutions (“Sciens”), joining its growing nationwide portfolio of companies. Sciens expands its northeastern presence with this acquisition, bringing its total to 12 locations in the region. This addition complements existing sites such as Absolute Protective Systems in Piscataway, New Jersey, which became part of the company in 2021.

For over two decades, OSI has built a strong reputation across New Jersey, delivering top-tier customer service and industry-leading products. OSI specializes in crafting integrated solutions tailored to the unique needs of educational institutions, healthcare facilities, government agencies, and commercial enterprises.

“Joining Sciens Building Solutions marks an exciting new chapter for OSI, aligning our 25-year legacy of excellence with Sciens’ respected industry leadership and growth strategy. This partnership not only strengthens our position as a life-safety leader in the Northeast but also contributes to Sciens’ vision of becoming the premier independent fire and life safety integrator nationwide,” said Paul Facciolo , CEO of OSI, who will remain in his current role with the company. Paul added, “SEA’s investment banking guidance proved indispensable throughout the entire acquisition process. From our initial contact, SEA took the time to understand our business as well as our industry at large, culminating in a seamlessly successful negotiation with the Sciens team.”

Curt Cyliax from SEA commented: “this transaction not only recognizes OSI’s two decades of excellence in the fire and life safety sector but also aligns perfectly with Sciens’ ambitious growth strategy. It’s gratifying to see how this deal will strengthen both companies’ market positions while enhancing their ability to serve clients across the Northeast and beyond.”

SEA’s deal team was led by Curt Cyliax , Tony Parisi and Peter Hissey .

About Sciens Building Solutions

Headquartered in San Francisco, California, and backed by The Carlyle Group, Sciens Building Solutions is a fire and life safety company focused on protecting lives and reducing business risk. This includes the design, installation, provision of maintenance and inspection services for fire detection, fire sprinkler and security systems across a variety of commercial vertical markets.

About Open Systems Integrators

Established in 1999, Open Systems Integrators (OSI) is a leading provider of integrated technology solutions specializing in design, engineering, installation, service, and maintenance of intelligent low-voltage systems. Based in Central New Jersey and serving the entire state and surrounding Philadelphia counties, OSI is made up of leading industry veterans that offer a true turnkey solution for low-voltage projects, including fire alarm, security, audio-visual, sound & communications, as well as other specialized solutions.

About SEA

Strategic Exit Advisors (SEA) is an investment bank that helps entrepreneurs with the biggest deals of their lives. The firm specializes in helping entrepreneurs achieve their goals by creating a process to identify strategic partners to help grow and scale their businesses.

The Critical Role of Team Health in Business Success

Mon, 16 Sep 2024 04:53:56 GMT

Simon Sinek famously stated, “A team is not a group of people who work together. A team is a group of people who trust each other.” But what can trust say about the culture of your organization, especially when it comes to the health of your team?The essence of trust in team dynamics underwrites successful collaboration and drives the productivity of high-performing organizations.

Robust team health is not merely about facilitating smoother daily operations – it has the power to impact a business’s overall market value, especially during critical phases, such as ownership transitions, and mergers and acquisitions (M&A).

Define Your Values & Check-in Regularly

Internal cultural alignment is a function of good team health. Strong leadership not only nurtures the overall well-being of individuals, it creates an environment where accountability is reciprocal.

The health of a team can be seen as a measure of its performance, cohesion, communication, and overall morale. When teams are healthy, they are more productive, communicate better, and have a positive impact on the organizational culture. Thus, good team health is crucial for achieving and maintaining internal cultural alignment.

When an organization is well-aligned, its members are more likely to work harmoniously toward common goals because they share similar values and understand the expected behaviors.

Effective leadership involves providing guidance, support, and resources that help individuals thrive in their roles. Leaders also set the tone for the organizational culture by modeling behaviors and setting expectations.

Accountability Is Not Just Top-Down

In an organization where everyone holds each other accountable, the environment fosters open communication, trust, and mutual respect. This is essential for nurturing cultural alignment and team health. This collective accountability plays a crucial role in individual performance and is particularly significant in mergers and acquisitions. Prioritizing cultural compatibility in M&A not only enhances integration success, employee retention, and innovation, but also prevents restricted growth, high attrition, and significant value erosion, highlighting its central importance as a strategic approach.

The Impact of Team Health on Organizational Performance

The disparity in performance levels across organizations can often be traced back to the ‘health’ of their teams. This health reflects the group’s overall well-being, functionality, and effectiveness. The Entrepreneurial Operating System (EOS®) is instrumental in nurturing team health. It establishes a structured framework and fosters a culture of accountability, which are crucial for driving value and ensuring seamless transitions during M&A.

Having effective communication and proper alignment within an organization are pivotal in developing a resilient team health framework. Ensuring that team interactions, job satisfaction, and workplace culture are in harmony with the organization’s strategic goals, is essential. This alignment boosts motivation and drives value among employees.

Metrics for Measuring Team Health

A well-defined set of metrics is crucial for accurately assessing team health. As companies prepare for strategic initiatives like implementing EOS, the role of the team health framework becomes increasingly significant. This framework should focus on:

Cultivating a culture rooted in emotional intelligence and mutual respect.
Facilitating personal and professional growth opportunities.
Implementing comprehensive wellness programs that address physical, mental, and emotional health.

Monitoring Team Wellness and Engagement

For business owners and managers, particularly those preparing for significant organizational changes or growth phases, maintaining a culture that supports holistic wellness is vital. Here’s a few ways to keep the pulse of and improve, team health:

Engagement Surveys: These are essential tools that gauge the emotional and intellectual commitment of employees to their work and the company. High engagement levels typically correlate with lower turnover and increased productivity.

Wellness Programs: Effective wellness programs focusing on mental health, stress management, and physical well-being, demonstrate the organization’s commitment to its employees’ overall health. These programs can lead to higher job satisfaction and reduced absenteeism.

Open Communication Channels: Ensuring that employees have the opportunity to provide feedback is crucial. Regular check-ins and open-door policies make employees feel valued and supported.

Proactive Management of Employee Wellness

The adage “You can’t manage what you can’t measure” applies to team health, requiring clear metrics for wellness and engagement to create a thriving work environment. Implementing proactive strategies such as regular training, mentorship programs, and flexible working conditions enhances team health and promotes growth, satisfaction, and adaptability. Prioritizing these initiatives builds stronger, more resilient teams poised for long-term success.

The Strategic Importance of Team Health

Entrepreneurs focused on achieving greater success recognize the critical role that team health plays in driving business value. This involves proactively addressing issues, strategically positioning team members, optimizing meetings, fostering accountability, aligning team goals, and enhancing operational efficiency. These elements are indispensable for cultivating a healthier, more effective team, and achieving an enhanced return on investment.

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Strategic Exit Advisors specializes in assisting entrepreneurs in reaching their financial objectives. When entrepreneurs collaborate with SEA, they can unlock substantial value through M&A. Regardless of whether you’re a buyer or seller in a transaction, comprehending the advantages of M&A is instrumental in establishing priorities and optimizing value.

At SEA , we pay close attention to your unique transition goals and customize our approach to achieve a well-defined result. Unsure where to begin? Reach out to us at any time at (215) 489-8881 or schedule a discussion with us here to see how we can help you.

*This article was initially written as a Guest Blog by Robert Waring, Managing Director of Strategic Exit Advisors , and was featured on Entrepreneurial Operating System .

Read more about Strategic Exit Advisors and Entrepreneurial Operating System (EOS)

Strategic Exit Advisors Welcomes Michael O'Donnell, CFA as Managing Director

Mon, 09 Sep 2024 08:43:40 GMT

Strategic Exit Advisors is pleased to announce the appointment of Michael O’Donnell, CFA , as Managing Director . With over two decades of experience in corporate finance, treasury, risk management, and investor relations, Mike brings a wealth of knowledge and expertise to the firm.

Mike’s career began in investment banking, laying the foundation for his extensive experience in the financial sector. He has since held key positions in publicly traded, private equity owned, and nonprofit organizations across various industries, including automotive, chemical, mining/materials, telecom, hospitality, and education.

His diverse background equips him with a unique perspective on the challenges and opportunities facing middle market companies. Mike’s return to investment banking is driven by his passion for helping business owners achieve optimal exits.

Growing up in a family of business owners and entrepreneurs, Mike has developed a deep appreciation for the dedication required to build and grow middle market companies. This personal connection fuels his commitment to guiding owners through the complex process of exiting their businesses in the most advantageous ways possible.

Mike holds a bachelor’s degree from Dartmouth College, where he was a member of the football team, an MBA from UNC’s Kenan-Flagler Business School, and a Master’s in Taxation from Villanova University. He has also earned the prestigious Chartered Financial Analyst (CFA) designation. Residing in Devon, PA with his wife and children, Mike is an avid Appalachian Trail hiker and a self-described “forever-mediocre” golfer. He enjoys traveling to National Parks and sports stadiums with his family and friends, balancing his professional achievements with an active and fulfilling personal life.

Strategic Exit Advisors is confident that Mike’s extensive experience, personal drive, and commitment to client success will make him an invaluable asset to the team and the firm’s clients.

To learn more about Strategic Exit Advisors call us anytime (215) 489-8881 or schedule a conversation here .

Navigating the Psychological Terrain: Ego and Emotional Intelligence

Tue, 03 Sep 2024 10:34:21 GMT

Welcome to the final installment of our series, “I Received an Offer, What Do I Do? A Blog Series on M&A Do’s and Don’ts. ” As we conclude, we’ll explore a critical yet often overlooked aspect of M&A: the psychological factors that can make or break a deal. Specifically, we’ll examine how ego and emotional intelligence profoundly impact negotiation outcomes and deal success.

The Ego Factor: Navigating the Double-Edged Sword

In lower middle market mergers and acquisitions, confidence and self-assurance play important roles. While a healthy level of confidence can drive ambition and showcase business value, unchecked overconfidence may complicate negotiations or lead to premature disclosure of critical information .

Let’s explore how this dynamic manifests:

Valuation Perspectives:
Entrepreneurs often have a deep understanding of their business’s potential, which can lead to optimistic valuations. Market realities and buyer perspectives may differ, creating a valuation gap. A balanced approach considers both the owner’s insights and objective market assessments.
Negotiation Flexibility:
Strong convictions can be an asset in defending key business aspects. However, openness to compromise often leads to mutually beneficial outcomes. Finding a balance between firmness and flexibility is crucial for successful deals.
Leveraging Expertise:
Business owners bring invaluable firsthand knowledge to the table. External advisors offer complementary market insights and transaction experience. Combining owner expertise with professional guidance often yields optimal results.

A trusted M&A advisory team can help bridge perspectives by:

Uncovering hidden value to support strong valuations
Providing objective, market-based assessments
Identifying areas for pre-sale optimization
Attracting suitable buyers through industry networks
Facilitating constructive negotiations
Balancing confidence with openness to external input can lead to smoother transactions and improved outcomes for all parties involved.

Emotional Intelligence: The Cornerstone of Successful Negotiations

Emotional intelligence (EI) – the ability to recognize, understand, and manage our own emotions while navigating the emotions of others – is a game-changer in M&A negotiations. Key components include:

Self-awareness : Understanding your emotions, strengths, weaknesses, and triggers.
Self-regulation : Managing your emotions and impulses, especially under pressure.
Empathy : Understanding and sharing the feelings of others, crucial for building rapport.
Social skills : Effectively communicating and managing relationships during complex negotiations and sub-negotiations .

Negotiators with high EI are better equipped to:

Build trust and rapport
Navigate complex emotions and personalities
Identify underlying interests and motivations
Manage conflicts constructively
Maintain composure during tense moments
Create value-adding solutions benefiting all parties

Strategies for Managing Ego and Enhancing Emotional Intelligence

Developing EI and keeping ego in check requires consistent effort and self-reflection. Consider these strategies:

Recognize personal biases: Regularly question your assumptions and seek diverse perspectives.
Seek objective feedback: Engage reputable third-party advisors for unbiased assessments.
Practice active listening: Make a conscious effort to understand the other party’s perspective.
Cultivate a growth mindset: View challenges and feedback as opportunities for learning.
Build a diverse advisory team: Surround yourself with advisors who complement your skills.
Employ mindfulness techniques: Improve self-awareness and emotional regulation
Engage in scenario planning: Prepare for various negotiation scenarios to build confidence and refine your approach.

The Long-term Impact on Business Relationships

Your conduct during M&A negotiations can significantly affect your professional reputation and relationships. By demonstrating high EI and managing your ego effectively, you can:

Cultivate long-term business relationships leading to future opportunities
Create a positive legacy in the business community
Increase the likelihood of successful post-merger integration

The Path to M&A Success

As we conclude this series, it’s clear that managing ego and developing emotional intelligence are critical skills for navigating the complex psychological terrain of M&A.

The most successful dealmakers balance confidence with humility, assertiveness with empathy, and personal interests with mutual value creation .

Strategic Exit Advisors: Your Partner in M&A Success

The M&A process is multifaceted and fraught with challenges . From financial valuations to legal intricacies and the psychological elements we’ve explored, successfully navigating an M&A transaction requires diverse skills and deep expertise.

This is where Strategic Exit Advisors (SEA) excels. With years of experience guiding businesses through successful M&A transactions, SEA offers the expertise and support you need to navigate this complex terrain.

Our expert team at SEA excels at guiding entrepreneurs through the challenges of M&A negotiations, empowering them to make informed, high-value decisions for their best exit. We meticulously align our process with your unique transition goals to achieve optimal outcomes with precision. Connect with us now at (215) 489-8881 or schedule a confidential conversation to unlock your ideal exit strategy and ensure you navigate your negotiations with skill and confidence.

SEA Managing Director Robert Waring Appointed to EPI Philadelphia Chapter Leadership Team

Fri, 23 Aug 2024 09:36:29 GMT

Strategic Exit Advisors (SEA) is pleased to announce that Managing Director Robert Waring has been appointed as Vice President – Director of Chapter Partnerships for the Greater Philadelphia Chapter of the Exit Planning Institute (EPI).

The Greater Philadelphia Chapter of the Exit Planning Institute is a group of local advisors dedicated to changing the outcome for business owners looking to grow, transition, or exit their businesses. This appointment underscores SEA’s commitment to providing expert guidance in exit planning and business transitions.

Commenting on his appointment, Robert Waring said, “Matt Lang and the other Leadership Team members have done a tremendous job of bringing valuable education and resources to business owners and advisors in the Greater Philadelphia region. I am excited to work with the Leadership Team to help continue to grow the Chapter through establishing partnerships with like-minded organizations. This position allows me to combine my passion for helping lower middle market business owners with the important work of EPI in improving outcomes for entrepreneurs. I look forward to contributing to the growth and success of our local chapter and the broader business community.”

About SEA

About EPI Greater Philadelphia

The purpose of the EPI Greater Philadelphia Chapter is to create a forum where the local community of professional advisors can collaborate to address unique needs of the local community; develop educational programs for business owners and professional advisors to build awareness and better prepare an owner for the successful exit of their business; develop, encourage and foster the adoption of best practices for the exit planning profession; and promote the common business interests of those business advisors engaged in the profession of exit planning.

Common Pitfalls: Negotiation No-No's You Should Avoid

Tue, 06 Aug 2024 06:14:04 GMT

The Negotiation Paradox: Why Seasoned Entrepreneurs Still Need M&A Experts

The illusion of negotiation mastery can be a treacherous pitfall for entrepreneurs when it comes to transitioning ownership of their business.

While years of deal-making may instill confidence, the complexity and high stakes of selling a company require specialized expertise that goes beyond routine business negotiations.

During M&A transactions , the ability to negotiate effectively can make or break a transaction .

Turning to M&A experts at SEA and our deep bench of senior advisors and executives in residence maximizes the value of your business by leveraging specialized skills and experience in high-stakes ownership transitions.

Understanding Negotiation Missteps: What Not to Do

As we continue our “I Received an Offer, What Do I Do?” blog series, we turn our attention to a critical aspect of M&A transactions: negotiation skills.

This installment focuses on common pitfalls that can derail even the most promising deals. Understanding and avoiding these negotiation no-no’s can significantly improve your outcomes and set the stage for successful transactions.

Failing to Prepare Adequately

One of the most critical mistakes in negotiations is insufficient preparation. At Strategic Exit Advisors (SEA) , we’ve observed that preparation and a strong alignment of culture and values is the foundation of successful deals. This groundwork often begins long before you contemplate transitioning ownership of your business.

Effective preparation extends far beyond the immediate transaction. It encompasses years of strategic decision-making, meticulous record-keeping, and cultivating a company culture that aligns with long-term goals. These elements not only enhance your company’s value but also position you favorably when it’s time to negotiate.

This involves not just researching the other party but also gaining clarity on your own goals and bottom line. Neglecting to anticipate potential objections can leave you vulnerable during crucial moments. Remember, in the high-stakes world of M&A, knowledge truly is power.

Moreover, an integral aspect of preparation is understanding when to reveal certain information . Releasing key details too early can weaken your negotiating position, while holding back too long might erode trust.

Getting Emotional

Emotions can be a negotiator’s worst enemy . Letting anger, frustration, or stress guide your decisions can lead to poor choices and damaged relationships. It’s essential to maintain a professional demeanor, even when faced with challenging situations. As we’ve seen in numerous deals, the ability to remain calm and objective can often be the difference between a successful conclusion and a failed negotiation.

Taking the First Offer Too Quickly

While there can be advantages to taking the first offer in some situations, in M&A transactions, it’s often best to hold back. Taking an offer too quickly can result in leaving money on the table or revealing too much about your position.

At SEA, we’ve learned that patience in this area can lead to significantly better outcomes. In fact, we never share price guidance early in the process. It’s often either too high or too low, and the majority of our processes end up having one buyer who separates from the pack. We would not want to lose out on the upside that competition creates.

Focusing Solely on Price

While price is undoubtedly important, it’s a mistake to make it the sole focus of negotiations. Other terms can be equally valuable and may provide opportunities for win-win solutions. In M&A deals, factors such as employment agreements, working capital adjustments, and post-closing covenants can significantly impact the overall value of the deal. A comprehensive approach that considers the entire value proposition often leads to more satisfactory outcomes for all parties involved.

Poor Listening Skills

Effective negotiation is as much about listening as it is about speaking. Talking too much and listening too little can cause you to miss crucial information or fail to pick up on important non-verbal cues. We ask clarifying questions to truly understand the other party’s position. This not only helps in gathering valuable information but also demonstrates respect and builds rapport.

Being Inflexible

Rigidity can be a deal-killer in negotiations. Sticking stubbornly to initial positions and failing to consider creative alternatives can lead to missed opportunities. Flexibility is key to reaching mutually beneficial agreements.

We’ve seen numerous instances where a willingness to explore unconventional solutions has led to breakthroughs in seemingly deadlocked negotiations.

Neglecting the Relationship

In the heat of negotiations, it’s easy to focus solely on short-term wins. However, neglecting the relationship aspect can have long-term consequences, especially in M&A where post-deal collaboration is often crucial. Maintaining professionalism and respect throughout the process is vital.

At SEA, we emphasize the importance of building and maintaining goodwill throughout the negotiation process, as it can be invaluable when facing the inevitable challenges that arise during closing.

Fighting for the Wrong Things

Fighting for certain hypotheticals in a purchase agreement or small issues like vehicle allowance in an employment contract can hurt goodwill with the buyer and put you at a disadvantage for other issues that could have a larger effect on the transaction and life post-close. Know what to push for and what to not push for and work with your team to focus on what is important.

The Art of Skillful Negotiation

Mastering the art of negotiation is a critical skill in the lower middle market M&A landscape. By avoiding these common pitfalls, you can significantly enhance your chances of achieving optimal outcomes in your transactions. Remember, negotiation is not about winning at all costs, but about creating value and building relationships that can withstand the test of time.

At Strategic Exit Advisors, we pride ourselves on our ability to navigate these complex waters, ensuring our clients avoid these pitfalls and achieve the best possible results in their M&A transactions. We understand that each deal is unique, and we tailor our approach to align with your specific goals and circumstances.

As we continue this series, we encourage you to reflect on these insights and consider how they might apply to your own negotiation experiences. In our next installment, we’ll delve deeper into strategies for successful deal conclusions, building on the negotiation skills discussed here.

Key Takeaways and Next Steps

Key Takeaways:

Prepare early: Start years before selling, focusing on strategy, records, and culture.
Control emotions: Maintain professionalism and objectivity in negotiations.
Exercise patience: Resist quick offers; better deals often come with time.
Look beyond price: Consider all terms that impact overall deal value.
Listen keenly: Understand the other party’s position for effective negotiation.
Embrace flexibility: Be open to creative solutions for negotiation breakthroughs.
Cultivate relationships: Foster goodwill for smoother deals and post-sale transitions.
Strategic disclosure: Balance information release to maintain leverage and trust.'

Stay tuned for more valuable insights in our “I Received an Offer, What Do I Do?” series. The final installment will cover “Navigating the Psychological Terrain: Ego and Emotional Intelligence.”

Our goal is to equip you with the knowledge and strategies needed to navigate the entire M&A process successfully, from initial offer to final handshake.

Experience the Strategic Exit Advisors Difference

Our expert team at SEA excels at guiding entrepreneurs through the challenges of M&A negotiations, empowering them to make informed, high-value decisions for their best exit.

We meticulously align our process with your unique transition goals to achieve optimal outcomes with precision. Connect with us now at (215) 489-8881 or schedule a conversation to unlock your ideal exit strategy and ensure you navigate your negotiations with skill and confidence.

The Art of Concluding: Expert Insights from SEA

Fri, 19 Jul 2024 05:00:41 GMT

As we approach the finale of our “I Received an Offer, What Do I Do?” blog series, we turn our attention to a pivotal yet frequently overlooked phase of M&A transactions: the conclusion. Our experience at Strategic Exit Advisors (SEA) has shown that mastering the conclusion phase of M&A transactions is crucial for maximizing value , ensuring smooth transitions, and laying a strong foundation for post-merger success in the lower middle market .

For those who may have missed earlier installments, our series has covered crucial topics including:

Building on these foundational concepts, we now delve into the art of concluding M&A deals. At Strategic Exit Advisors (SEA) , we’ve guided numerous lower middle market business owners through successful deal conclusions, and we’ve learned that this final stage is always accompanied by a heightened level of stress and emotion.

What Does “Concluding” Mean in M&A?

Concluding an M&A deal goes beyond merely signing on the dotted line. It’s a complex process that involves tying up loose ends, finalizing negotiations, completing due diligence, obtaining necessary approvals, and ensuring all parties are aligned for a smooth transition. This phase typically includes activities such as:

Final negotiations on key terms. This can happen up to the hour/minute/second before closing.
Completion of comprehensive due diligence
Securing regulatory approvals
Addressing any last-minute issues or concerns
Finalizing closing checklists and documentation

The Importance of a Well-Executed Conclusion

A well-executed conclusion is vital for several reasons. First, it sets the tone for the post-merger integration process . A smooth conclusion can foster goodwill and trust between the parties, creating a solid foundation for future collaboration. Conversely, a rocky conclusion can sour relationships and create obstacles for integration.

Second, the conclusion phase often involves critical decisions that can significantly impact the deal’s long-term success. For instance, final negotiations on working capital or employment agreements can have far-reaching consequences for the merged entity’s financial health and operational efficiency.

At SEA , we’ve seen firsthand how maintaining pressure on the broader deal team and attorneys to work toward a deadline is critical. The last two weeks prior to close are invariably stressful, with numerous moving parts to manage. These often include:

Negotiating final net working capital

Once the target net working capital is established, typically as a result of QoE, the seller needs to provide an estimated closing balance sheet three days prior to close. Depending on the type of business and when the deal is closing, i.e. end of month or middle of the month, there can be a lot of moving pieces here to go through this analysis and not a lot of time. Having a team in place that knows how to do this is crucial to closing on time.

2. Agreeing on supporting documents like employment agreements

Many buyers need the existing management team to continue on in some capacity to maintain operations.
Both Financial and Strategic buyers require the team for successful integration and synergy realization.
Founders and investors rely on team continuity to maximize deferred payments and minimize potential claims.

3. Obtaining consents from key clients or landlords, especially in change of control scenarios

4. Notifying customers if there are change of control provisions in contracts

5. Addressing specific requirements based on the deal structure (asset vs. stock sale), especially if there is a required corporate reorganization required for tax purposes.

SEA’s Expert Approach to Concluding M&A Deals

At SEA, we’ve developed a comprehensive approach to navigating the conclusion phase effectively:

Preparation is Key: We ensure all loose ends are identified and addressed well in advance. This includes creating detailed checklists and timelines to track progress and deadlines.
Assembling the Right Team : We involve key stakeholders and experts in the final push, ensuring all necessary perspectives are represented and potential issues are caught early.
Managing Expectations: We align all parties on the conclusion process and timeline, setting realistic expectations and minimizing surprises.
Navigating Last-Minute Challenges: We have strategies in place for addressing unexpected issues that may arise, drawing on our extensive experience to find creative solutions.
The Human Element: We prioritize maintaining positive relationships throughout the conclusion process, recognizing that the human aspect is just as important as the technical details. It is important to have an abundance of goodwill built up throughout the process, because closing is always challenging.

Beyond the Handshake

A well-executed and strong finish sets the stage for successful post-merger integration . It ensures that all parties start their new relationship on the right foot, with clear expectations and a shared vision for the future. Moreover, it can have long-lasting implications for the newly merged entity’s culture , operations, and financial performance.

Final Thoughts

Mastering the art of concluding M&A deals is a critical skill in the lower middle market. It requires a delicate balance of technical expertise, strategic thinking, and interpersonal skills. At SEA, we pride ourselves on our ability to navigate this complex phase, ensuring our clients achieve optimal outcomes in their M&A transactions .

The conclusion phase is more than just the end of a deal – it’s the beginning of a new chapter for the merged entity. By approaching it with the care and attention it deserves, we can set the stage for long-term success and value creation.

Experience the Strategic Exit Advisors Difference

Our expert team excels at guiding entrepreneurs through challenges, empowering them to make informed, high-value decisions for their best exit. SEA meticulously aligns with your unique transition goals, tailoring our process to achieve optimal outcomes with precision .

Connect with us now at (215) 489-8881 or schedule a conversation to unlock your ideal exit strategy .

SEA Represents Neu Dynamics in Partnership with Diamond Fund Partners

Wed, 03 Jul 2024 09:22:24 GMT

Ambler, PA June 17, 2024, Strategic Exit Advisors (SEA) is pleased to announce the successful completion of a new partnership between its client Neu Dynamics Corporation and NDC International , collectively “Neu Dynamics,” and Diamond Fund Partners.This collaboration will provide Neu Dynamics, a leading supplier of tooling for the semiconductor, automotive, medical, and electronics industries with enhanced resources and capabilities, elevating their goal to provide high-quality products to its clients.

Founded in 1972 and headquartered in Ivyland, Pennsylvania, Neu Dynamics Corporation brings a distinct blend of technology and experience to the design and production of precision molds and dies. Over the past two decades, the company has expanded to become one of the leading suppliers of tooling for various industries.

The SEA team, led by Curt Cyliax , Peter Hissey , and Jamie Lavarnway , facilitated the process of finding a strong partner for Neu Dynamics. “We have known Kevin and his team for close to a decade, so we were really happy to engage and run a successful process to find the right partner for the next phase of growth,” said Curt Cyliax.

Kevin Hartsoe, CEO of Neu Dynamics , praised SEA’s involvement, stating, “Our experience with SEA was nothing but great. They really went above and beyond to find a perfect fit. They guided us through the entire process with professionalism to ensure we were in the loop through the entire process. Their team offered advice only a professional would know. We would highly recommend SEA.”

Bobby Malonoski, Managing Partner of Diamond Fund Partners, expressed his confidence in the partnership, saying, “Neu Dynamics has a long record of providing high-quality engineered products and services to its customers, and we look forward to building upon their success.”

About Neu Dynamics

About Diamond Fund Partners

About SEA

Sub-Negotiations Unveiled: Beyond the Bottom Line

Wed, 26 Jun 2024 05:07:36 GMT

Welcome back to our blog series “I Received an Offer, What Do I Do? A Blog Series on M&A Do’s and Don’ts.” In our previous posts, we’ve covered various aspects of navigating the complexities of mergers and acquisitions (M&A), including: “The Offer: When To Seek a Trusted Advisor,” “Demystifying M&A Deal Points” and “Strategic Information Release.” In this article, we will explore the critical role of sub-negotiations in M&A deals and how they extend beyond just the financial aspects.

What are Sub-Negotiations?

Sub-negotiations are separate discussions that take place alongside the main negotiation in an M&A transaction . These negotiations focus on specific issues or concerns that are important to the parties involved but may not be directly related to the overall purchase price. Examples of common sub-negotiations include employment agreements , escrows, baskets and caps on indemnity, indemnification terms , rent (if you own the building), non-compete clauses, earn-outs , and rolled equity.

The Importance of Sub-Negotiations in M&A Transactions

While sub-negotiations may seem like minor details compared to the main deal terms, they can significantly impact the overall success of a transaction closing in the lower middle market. These negotiations can affect post-closing operations and integration , as well as the long-term relationship between the parties involved.

For example, Strategic Exit Advisors (SEA) worked with a professional services company that was seeking a partner to help them with an acquisition strategy. The employment agreement became a crucial sub-negotiation because the owner’s desire was to stay with the business for 3+ years. Although it was a small part of the overall deal, the terms incorporated into the agreement will affect their day-to-day life for the next few years.

With another client, an industrials firm had a next level of management that they wanted to participate in the upside of the company’s future growth. SEA and the owners worked with the buyer to establish management incentive options for key staff, ensuring that they would benefit in equity ownership for helping to grow the business.

By addressing these issues during the negotiation process, both buyers and sellers can ensure a smooth transition, avoid common mistakes , and align the interests of essential personnel, ultimately contributing to the success of the merged entity.

Navigating Sub-Negotiations in the Lower Middle Market

To effectively navigate sub-negotiations, preparation is key. Gather information and anticipate potential issues that may arise. Assemble the right team, involving relevant stakeholders and experts who can provide valuable insights and guidance .

Prioritize and sequence sub-negotiations based on their importance and establish a logical order for addressing them. It’s essential to negotiate with a holistic view, considering the interplay between sub-negotiations and the main deal terms.

Seeking professional guidance from the advisory team at SEA can be invaluable in navigating complex sub-negotiations. Why? We can help identify potential pitfalls, develop effective strategies, and ensure that your interests are protected throughout the process.

Understanding Priorities that Drive Value

Sub-negotiations play a significant role in safeguarding the interests of all parties involved and understanding key metrics that drive value . They also help mitigate risks that may arise post-closing. By addressing these issues upfront, companies can ensure a smoother transition and a more successful long-term outcome.

It’s crucial to approach sub-negotiations with diligence and strategic foresight. While the main deal terms may be the focus of attention, neglecting sub-negotiations can lead to unintended consequences and potentially jeopardize the success of the transaction.

Key Takeaways

Sub-negotiations are a critical component of M&A transactions that extend beyond just the financial aspects. By understanding their importance, preparing thoroughly, and seeking professional guidance, companies can navigate these negotiations effectively and ensure a more successful outcome. Remember, Do : Foster good terms and navigate sub-negotiations that impact the deal beyond price. Don’t : Allow your ego to interfere with the process.

In our next post, we’ll explore “The Art of Concluding.” Stay tuned for more insights and strategies to help you navigate the complex world of M&A.

Experience the Strategic Exit Advisors Difference

Connect with us now at (215) 489-8881 or schedule a conversation to unlock your ideal exit strategy .

Curt Cyliax Appointed to Philadelphia100® Forum Board of Directors

Wed, 12 Jun 2024 09:58:01 GMT

PHILADELPHIA, PA – June 10, 2024 – Strategic Exit Advisors (SEA) is pleased to announce that Curt Cyliax, Managing Director , has been appointed to the Board of Directors of the Philadelphia100® Forum, effective July 1, 2024. In his new role, Cyliax will focus on programming initiatives for the exclusive membership organization, which brings together Philadelphia100® CEO winners and other growth-oriented leaders for meaningful connections, peer-to-peer learning, and growth opportunities.

“I am grateful for the opportunity to serve on the Philadelphia100® Forum Board of Directors and contribute to the organization’s mission of fostering growth and collaboration among Philadelphia’s most dynamic business leaders,” said Curt Cyliax. “I look forward to working alongside Co-Presidents Raymond Lee and Marcia O’Connor, as well as the entire board, to develop engaging programming that supports the continued success of our members.”

The Philadelphia100® Forum Board of Directors, starting their new terms on July 1, 2024, includes:

Co-Presidents : Raymond Lee and Marcia O’Connor
Immediate Past President : Ethan Millrood
Vice President : Shelly Azen
Treasurer : Jeff Bruno
Membership : Andy Rich and Christopher Sperring
Sponsorship : Mike Bertoni and Kevin Fox
Programming : Cate Heaman and Curt Cyliax
Marketing : Ari Banerjee

About Strategic Exit Advisors

Strategic Exit Advisors (SEA) is an investment bank that helps entrepreneurs with the biggest deals of their lives. The firm specializes in helping entrepreneurs achieve their goals by creating a process to identify strategic partners to help grow and scale their businesses.The company focuses on the transition, not just the transaction.

About Philadelphia100®

The Philadelphia100® is a merit-based program that recognizes the 100 fastest-growing, privately held companies in the Greater Philadelphia Region. The integrity of the process and the resulting list make the Philadelphia100® one of the most sought-after awards in the region. The program is run by the Entrepreneurs’ Forum of Greater Philadelphia.

SEA Welcomes Alison LaPat and Nikhil Makker to the Summer Analyst Class of 2024

Wed, 12 Jun 2024 08:47:03 GMT

Strategic Exit Advisors (SEA) is proud to welcome Alison LaPat and Nikhil Makker to our Summer Analyst Class of 2024. Our Summer Analyst program serves as a launchpad for talented and driven individuals looking to propel their careers forward through expert guidance, mentorship, and hands-on experience with the SEA team.

Alison LaPat, an incoming senior at Wake Forest University, is pursuing majors in Economics and English. She is actively involved in various campus organizations, including the Alpha Kappa Psi business fraternity, CKI service organization , and intramural sports. Prior to joining SEA, Alison gained valuable experience working as a Financial Research and Reporting Associate at Complyt Technologies in Tel Aviv, Israel, where she contributed to streamlining the sales tax automation process. Additionally, she worked remotely as an Investment Analyst for Bastille Ventures, leveraging her passion for writing in the venture capital landscape. In her free time, Alison enjoys running, reading, and exploring new musical instruments.

Nikhil Makker, a finance and quantitative science double major at Emory University , is actively involved in campus organizations such as the Goizueta Investment Banking Club , which sparked his interest in pursuing a career in investment banking. As a student-athlete, Nikhil is a member of the Varsity Cross Country and Track and Field teams at Emory. Before joining SEA, Nikhil gained a strong foundation in various financial concepts through coursework and previous internships. He explored the transportation and logistics industry while working with the finance team at a transportation brokerage firm and gained buy-side exposure at an investment firm, where he learned to value companies both quantitatively and qualitatively. In his free time, Nikhil enjoys running, trying new restaurants, watching hockey, and spending time with friends and family.

At SEA, we understand that meaningful work extends beyond traditional boardrooms and balance sheets. We are committed to nurturing future business leaders by creating a supportive learning environment that prepares them for success. Our Summer Analyst Program and Co-op Experience Partnership with Drexel University exemplify our dedication to fostering the growth and development of tomorrow’s leaders.

Please join us in welcoming Alison LaPat and Nikhil Makker to the Strategic Exit Advisors team. We look forward to the fresh perspectives and enthusiasm they will bring to our organization this summer.

Strategic Information Release: Timing is Everything

Wed, 05 Jun 2024 13:31:31 GMT

Welcome back to our blog series “ I Received an Offer, What Do I Do? A Blog Series on M&A Do’s and Don’ts. ” In our previous posts, we’ve covered various aspects of navigating the complexities of mergers and acquisitions (M&A), including: “ The Offer: When To Seek a Trusted Advisor ” and “ Demystifying M&A Deal Points: Understanding the Essentials.” In this post, we’ll explore the crucial role of timing when it comes to the strategic release of information during M&A negotiations, specifically information disclosure during acquisitions and how SEA’s expert insights can help maintain control and maximize leverage throughout the negotiation process.

Regardless of the trends in lower middle market M&A, information is power and the blueprint for success begins long before entrepreneurs are ready to sell. The details you share, the financials you disclose, and the proprietary insights you unveil can significantly impact the perceived value of your business and the leverage you hold at the negotiation table. Timing the release of this information is an art form that, when mastered, can maximize your outcomes and ensure a favorable deal.

Understanding the Role of Information in M&A

Strategic information in the context of M&A encompasses a wide range of elements, including financial statements, client lists, proprietary technology , and other critical business insights. Controlling the flow of this information is crucial, as premature or delayed release can have meaningful consequences.

At Strategic Exit Advisors (SEA), we follow a unique two-step process that adds a 30-minute introductory call with the owner before sharing the full Confidential Information Memorandum ( CIM ). This approach allows us to control the narrative and provide context, rather than letting the buyer dictate the terms based solely on numbers.

The timing of when companies release financial information, as well as the context provided around that information, can significantly impact how that data is interpreted by buyers and investors. If raw numbers are released without proper framing, buyers can spin the narrative in a way that benefits them. By controlling both the timing and the surrounding narrative when disclosing financial metrics, companies can shape how their performance is perceived.

The Art of Timing Information Release

M&A deals involve several stages where the strategic release of information can profoundly influence buyer interest and perceived value. These stages include initial contact, marketing phase, management meetings, signed Letters of Intent (LOIs), due diligence, and final negotiations.

There are several early pitfalls a business owner can make when they are approached directly by a buyer. The deck is already stacked against them because there is no competition, so even the slightest misstep can take a below market offer and make it even worse. At SEA, we say that you’re always in a process. The question is whether you’re in control of the process or not.

When business owners are approached directly, they are skipping the initial contact, marketing and management meeting phases and are going directly to LOI and due diligence. This means that information needs to be shared quickly and at a great level of detail; however, business owners still need to control the release of this information and provide the appropriate context.

Top Three Recommendations When Engaging Directly:

Don’t share financial statements without first providing context for what the buyer is going to see. Provide the narrative of why revenue has grown or decreased or why profitability has changed.
Don’t share financial statements until someone with an expertise in this industry has evaluated your financials. Multiples in the lower middle market are not based on net income. They are based on recast or adjusted EBITDA. Don’t share numbers that don’t have adjusted EBITDA at the bottom.
Don’t share customer names. Blind the customer data until there is a signed LOI. Provide revenue by customer type, geography, etc. but don’t give out your customer names until diligence.

Exercising emotional intelligence by carefully considering what information to disclose, when, and how – as illustrated by providing context around customer concentration – rather than an emotionally-driven knee-jerk disclosure of concerning data, is crucial for controlling the narrative and maximizing value in a deal situation.

While we’ve provided three recommendations for direct engagement, our advice is not to engage directly. Engage an investment bank . We at SEA know what the market is willing to pay for your business and know how to handle the release of information. By working with SEA, you can expect that we will more than pay for our fee through a higher purchase price and better deal structure.

Balancing Transparency and Leverage

While strategic information release is critical, it’s essential to strike a balance between necessary transparency and maintaining leverage over the buyer. Over-disclosure can leave you vulnerable, while under-disclosure can breed distrust and stall negotiations.

Entrepreneurs must gauge what to disclose and when, considering the potential impacts on buyer interest, perceived value, and their ability to negotiate favorable terms. This delicate balancing act requires careful consideration and often benefits from the guidance of experienced M&A advisors.

Case Studies: Addressing Confidentiality and Customer Concentration Concerns

Case Study #1: Confidentiality Preserves Value in Niche Industry Sale

This involved a client operating in a highly niche industry where confidentiality was a major concern. How did they approach disclosing sensitive information during the marketing process? They kept the name of the business completely anonymous until management meetings and letters of intent were due. Confidentiality was maintained to the broader market, with the company’s identity only shared with a handful of prospective buyers. This approach resulted in a great financial outcome and partner fit, while also preserving complete confidentiality throughout – a must, as premature disclosure could have negatively impacted the company’s performance.

Case Study #2: Strategic Disclosure Overcomes Customer Concentration Hurdle

This client had over 80% concentration with a single customer – a fact withheld from buyers until SEA facilitated a 30-minute call between the client and prospective buyers. On this call, the client provided critical context – that the “single customer” was actually 15 distinct relationships within one organization. With this clarifying narrative, SEA then shared the full supporting materials. This strategic disclosure of concerning data, coupled with proper context, allowed the client to achieve a great outcome and maximize cash at close.

Expert Insights and Strategies

At SEA, our team of M&A experts and Executives in Residence have honed the art of strategic information release through years of experience and successful deals. We understand the nuances of optimal timing and the potential pitfalls of ill-timed disclosures.

Our advice to entrepreneurs is to prepare a well-thought-out information release timeline, considering the potential impacts at each stage of the M&A process. Work closely with your M&A advisors to strategize and execute this plan, leveraging their expertise and insights.

In the intricate dance of M&A negotiations, timing the release of strategic information is a critical factor that can significantly impact the success of a deal. By mastering this aspect, you can maintain control over the narrative, pique buyer interest, and maximize your leverage during negotiations.

At Strategic Exit Advisors, we pride ourselves on our ability to guide clients through this delicate process, ensuring that the right information is shared at the right time for optimal outcomes. If you’re considering an M&A transaction, reach out to us for personalized advice and support on your journey.

In our next installment, we’ll explore another crucial aspect of M&A success : “SubNegotiations Unveiled: Beyond the Bottom Line.”

Key Takeaways

Timing the release of strategic information is an art form that can significantly impact the success of your M&A transaction. Keep these key takeaways in mind:

Information is power, and controlling its flow is crucial for maintaining leverage during negotiations.
Work closely with experienced M&A advisors to strategize and execute a well-planned information release timeline.
Balance transparency with preserving your bargaining power by avoiding over-disclosure or under-disclosure.
Provide context and frame your narrative when disclosing sensitive information like financials or customer concentration.
Carefully time the release of key details at various stages, from initial contact to final negotiations, to pique buyer interest and shape perceptions.

What’s the Strategic Exit Advisors Difference?

At Strategic Exit Advisors , our team of experts is well-versed in helping entrepreneurs overcome challenges and make informed, valuable decisions to achieve their best exit. We are dedicated to aligning with your unique transition goals and meticulously tailoring our process to achieve clearly defined, optimal outcomes. Reach out to us anytime at (215) 489-8881 or schedule a conversation .

SEA Welcomes Analyst Drew Ramirez Through Co-op Partnership with Drexel University

Wed, 01 May 2024 07:39:38 GMT

The Strategic Exit Advisors (SEA) team is pleased to announce that Drew Ramirez , through Drexel University ’s co-op program, has joined the firm as an Investment Banking Analyst .

Drew Ramirez is a Finance Major at Drexel University, double minoring in Entrepreneurship and Data Science. He is actively engaged in several organizations at Drexel University, including the Association of Latino Professionals for America (ALPFA), Drexel’s Finance and Investment Group and the Society of Security Analysts .

Prior to joining SEA as an Investment Banking Analyst, Drew founded and managed his own streetwear resale business for two and a half years before attending Drexel University . The experience sparked his interest in the mechanics of financial markets and investing , leading him to serve as a deal sourcing intern for a boutique private equity firm, Texas Legacy MP. After completing the internship, Drew was committed to expanding his knowledge in finance and investing and had the opportunity to explore the venture capital landscape through Drexel University’s Innovation Fund where he evaluated early-stage startups potential for investment.

In his free time Drew enjoys snowboarding, Rubik’s cubing, and maintaining an active lifestyle by lifting weights, hiking and playing basketball.

At SEA , we recognize that meaningful work can extend well beyond the traditional boardroom or balance sheet and we are committed to helping future business leaders succeed. As partners in Drexel University’s co-op program, SEA ensures a learning environment that fully integrates the co-op analyst as a team member. We’re thankful for our seven excellent co-ops we’ve had to date and look forward to the future of the program!

To learn more about Strategic Exit Advisors or this program, call us anytime (215) 489-8881 or schedule a conversation here .

Demystifying M&A Deal Points: Understanding the Essentials

Thu, 25 Apr 2024 10:20:20 GMT

How Deal Points Make & Break Negotiations

Welcome back to our ongoing blog series tailored exclusively for entrepreneurs in the lower middle market ready for their next success. In this installment, “Demystifying M&A Deal Points: Understanding the Essentials,” we explore the intricacies of deal points in mergers and acquisitions, a crucial element for any entrepreneur looking to maximize value and ensure strategic growth.

We know the entrepreneur’s journey is fraught with challenges, but with the right guidance , the potential for innovation and growth is exponential. This empowers entrepreneurs to confidently navigate complexities and transform obstacles into opportunities for success.

At SEA , our focus remains steadfast in providing business owners with the insights necessary to successfully navigate the complex landscape of business transactions.

Understanding the Essentials of Deal Points of M&A

Deal points are the backbone of M&A transactions, forming the terms that dictate the financial, legal, and operational agreements between the buying and selling parties.

These points can vary significantly depending on whether it is a stock sale or an asset sale. For example, in a stock sale, parties may opt for an F-reorganization with a step-up in basis through a Section 338(h)(10) election , carrying tax implications. Key elements such as seller notes, earn-outs, rolled equity, escrow terms with baskets and caps, and net working capital also play a crucial role. Additionally, the ongoing role of the owner post-close and the expectations for key management need to be clearly articulated to prevent future disputes.

The role of the owner post-close is critically important in navigating M&A transactions , especially in ensuring a smooth transition and the continued success of the business.

Does the owner control key relationships, key vendors, strategy and vision of the company?
Do sales and marketing depend on the owner?
Does the owner have to sign off on every proposal, estimate or contract?

The answer to these questions dictates the structure and role of an owner post-close.

For the business owner who is still heavily involved in the operations, a clearly defined role is important to the deal as it maintains stability, helps retain key customer relationships, and transfers valuable institutional knowledge. For business owners who have built a next layer of management and are out of the day-to-day operations, there can be a much quicker transition, if not an immediate one.

Understanding these points is essential for entrepreneurs, as they provide leverage during negotiations, helping to protect interests and maximize the value derived from the deal.

Sell-Side Deal Points in M&A Transactions

From the perspective of a seller, some deal points require particular attention. Negotiating favorable terms for aspects such as the structure of payment — be it through cash at closing, deferred payment structures like a seller note , or contingent payments like earn-outs — can significantly impact the deal’s attractiveness and the seller’s financial return. It is also vital to negotiate escrow terms to minimize withheld funds while adequately protecting the buyer from potential post-deal liabilities.

Here are three common sell-side deal points:

Purchase Price and Payment Terms

The purchase price is the amount agreed upon by the buyer to acquire the business, and it is often the most critical deal point. Payment terms detail how this price will be paid — whether in cash, stock of the buying company, deferred payments such as seller notes, or through earn-outs based on future performance. This deal point must be negotiated to ensure that the payment structure aligns with the seller’s financial goals and risk tolerance. It’s important for sellers to secure favorable terms that include upfront cash to mitigate risks associated with future business uncertainties. While 100% cash is the goal of many owners, the amount of cash at the closing table is largely dependent on the type of business, consistency of growth and revenue over time, diversity of clients, key management team and how much the owner has transitioned out of the day-to-day operations of the business.

Working Capital

This deal point involves adjusting the purchase price based on the net working capital of the business at closing compared to a previously agreed-upon target. The target working capital is typically based on historical averages and is intended to ensure that the buyer receives the business with sufficient liquidity to operate normally post-close. If actual working capital is below the target, the purchase price may be reduced, and if it’s above, the purchase price could increase. This mechanism protects both parties — the seller ensures the business is not stripped of resources leading up to the sale, and the buyer avoids paying for assets not received.

The big picture idea of net working capital is that a buyer wants to ensure the continuation of the business and that they will have the means necessary to meet the future obligations on day one.

Representations (Reps) and Warranties :

Reps and warranties are assertions made by the seller regarding the state of the company, including its financial condition, compliance with laws, condition of assets, and other material matters. Reps and warranties serve as a form of protection for the buyer, giving them recourse if certain aspects of the business are not as stated at the time of sale. For the seller, accurately disclosing the business’s condition is crucial to avoiding post-closing disputes and potential indemnity claims. This deal point typically includes negotiations on the scope, duration, and materiality thresholds of the warranties, as well as the indemnification terms that will govern any breaches of these warranties. There are differences between fundamental representations i.e. a buyer will not take over past tax liability, and general representations i.e. a list of top clients for the past two years. Fundamental reps survive in accordance with their specific statutes and limitations, while general reps survive for a certain period of time.

Each of these deal points plays a fundamental role in shaping the final terms of an M&A transaction from the seller’s perspective, helping to safeguard their interests and facilitate a fair and effective transfer of business ownership.

Entrepreneurs must beware of common pitfalls in sell-side negotiations. These can include underestimating the importance of net working capital adjustments, which can alter the final purchase price, or failing to secure a clear agreement on the role of the owner and key management post-transaction, leading to challenges in transition and integration processes.

Protecting Sell-Side Interests: Involving an M&A Advisor

In sell-side transactions , the M&A advisor plays a crucial role in safeguarding the seller’s interests, particularly through strategic deal structuring and effective management of the due diligence process. During the due diligence phase , the advisor ensures that the seller’s interests are protected by carefully managing the flow of information and proactively addressing any issues that arise. By effectively managing this process, the advisor helps maintain the deal’s momentum, minimizes disruptions, and ensures that the seller is not unduly burdened by risks, thus facilitating a smoother transition and more favorable outcomes for the seller.

As we continue to unpack the essential Dos and Don’ts of M&A Transactions, it is important to recognize that knowing when to seek an advisor is essential – especially when your business receives an unexpected offer.

In our next installment of “I Received an Offer, What Do I Do?” , join us for “Strategic Information Release: Timing is Everything.”

We’ll explore the timing of information disclosure during acquisitions and how SEA’s expert insights can help maintain control and maximize leverage throughout the negotiation process.

What’s the SEA Difference?

When entrepreneurs work with SEA, they are able to collaborate with a team of M&A experts to overcome challenges, make informed and valuable decisions and optimize their strategic exit. At SEA , we are committed to understanding your transition goals and tailoring our process to ensure a clearly defined outcome.

Whether you’re on the buy-side or the sell-side, our comprehensive advisory team is ready to navigate challenges, optimize strategies, and contribute to a seamless and successful exit.

Reach out to us anytime at (215) 489-8881 or schedule a conversation .

SEA Represents EndoscopyMD in Its New Partnership with Gore Creek Holdings to Drive Growth and Expanded Services

Tue, 26 Mar 2024 08:49:43 GMT

March 28, 2024 – Strategic Exit Advisors (SEA) is proud to announce the successful completion of a new partnership between its client EndoscopyMD (EMD), a surgical equipment repair and service company, and Gore Creek Holdings .

The new partnership provides EndoscopyMD with renewed resources and capabilities to advance its mission of providing healthcare workers with best-in-class repair of surgical equipment to enable patients to receive procedures with safe, dependable equipment. The partnership has also fulfilled the goals of the company’s founders and owners, Laura and Jeff Schell and will enable EndoscopyMD to build its reach and scope of services while maintaining the highest level of quality and responsiveness.

Since EMD was founded in 1999, the company’s core niche has been servicing flexible and rigid endoscopes on behalf of its government and commercial healthcare customers. The company’s foundational mission has been to provide safe, hygienic surgical equipment to patients. EMD was founded to serve VA hospitals and military treatment facilities to improve the care of our nation’s veterans, and has since expanded to serve commercial healthcare facilities across the U.S.

Laura Schell, EMD’s President, stated, “We are thrilled to begin our partnership with Gore Creek Holdings, as our new partner will enable EndoscopyMD to invest meaningfully to scale our service offerings and help more patients. Jeff and I enjoyed working with SEA , who earned our trust in advising us creating a partnership that was the most important of our business lives.”

Tony Parisi and Rob Waring , Managing Directors, and Peter Hissey , Vice President, at SEA , led the process of finding a strong growth partner for EndoscopyMD. Tony reflected, “Laura and Jeff Schell built an amazing company with a purpose of improving the lives of veterans and other healthcare patients. Their success emanated from that mission, with the help of great people and a lot of hard work and ingenuity. We are grateful and proud to have worked with the Schells, and we know that Gore Creek Holdings will be a tremendous partner in furtherance of EndoscopyMD’s operation on an even grander scale.”

EndoscopyMD

EndoscopyMD (EMD) : has been a trusted partner in surgical equipment repair for over 25 years. With a focus on innovation, reliability, and exceptional customer service, EMD has established itself as a critical partner to federal government and commercial healthcare facility partners. The Company’s services include maintenance and repair of flexible and rigid endoscopes, video cameras, power equipment, and surgical instruments. The company was recently awarded a $30 million dollar fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract for medical equipment and accessories for the Defense Logistics Agency Electronic Catalog and also holds a GSA contract to serve the VA community.

About SEA

The Offer: When to Seek a Trusted Advisor

Thu, 21 Mar 2024 14:21:50 GMT

In our new series, I Received an Offer, What Do I Do? , our goal is to empower entrepreneurs to make informed decisions at pivotal moments during the business life-cycle.

This is particularly true for mature, high-performing businesses that may not fully grasp the value they’ve cultivated.

By engaging SEA as a trusted advisor during key opportunities , entrepreneurs gain the strategic insights needed to leverage their business’s value effectively. With our guidance, they navigate intricate transactions with confidence, ensuring desired outcomes – whether it’s maximizing value , preserving legacy, or facilitating a seamless transition of the business for employees and stakeholders.

In this installment of I Received an Offer, What Do I Do?, we will explore just how to appropriately and effectively respond to an offer to sell the business and when to involve an M&A advisor to protect your sell-side interests.

The Excitement and Uncertainty of Receiving an Offer to Sell

Receiving an unexpected offer to sell your business can be a thrilling yet nerve-wracking experience. It’s a moment of excitement as you realize the potential value of your hard work, but it’s also laden with uncertainty about next steps.

“The Offer” signifies a pivotal moment when a potential buyer expresses interest in acquiring your business. This expression of interest can take various forms, from a formal written proposal to an informal verbal inquiry. Offers often arise in common scenarios and most often when your business demonstrates strong performance , attracts attention from competitors, or operates in a sector ripe for consolidation.

When an unexpected offer comes in, a few red flags to consider include:

Unsolicited Nature : If the offer comes out of the blue without any prior engagement or indication of interest from the buyer, it could raise concerns about the sincerity or motives behind the offer. They could be fishing for information that could put your operations at risk.
Lack of Information : If the offer lacks detail or transparency regarding the buyer’s intentions, financial capacity, or acquisition strategy, it may indicate a lack of seriousness or thoroughness on their part.
Significantly Below Expectations : If the offer significantly undervalues your business or falls far below your anticipated price range based on previous valuations or industry standards, it may suggest that the buyer is not willing to pay fair market value, potentially signaling future negotiation challenges or unrealistic expectations from the buyer.

What if an Offer Seems Too Good to Be True?

Businesses in the lower middle market have become prime acquisition targets for strategic and financial buyers . If an offer comes in unexpectedly and seems too good to be true, it’s imperative to proceed with caution. While an exceptionally high offer may appear enticing and flattering, it could also signify potential risks or hidden agendas. Aligning with a trusted advisor at this stage is crucial to ensure sellers conduct thorough due diligence, ensuring the buyer’s financial capability and intentions align with their objectives. Seeking guidance from experienced advisors can help assess the offer’s legitimacy and negotiate terms that prioritize long-term value, safeguarding the seller’s interests in the transaction.

Questions to Ask SEA – Involve Your Advisory Team Early

When confronted with an offer, asking the right questions is essential. Yet, navigating such scenarios can be unfamiliar, especially for entrepreneurs in the lower middle market experiencing this scenario for the first time. Engaging an advisory team ensures that you ask the right questions and understand the offer’s implications accurately.

Understanding the terms and implications, including financial, legal, and operational aspects, facilitates informed decision-making. As experienced advisors, SEA can provide valuable insights and guidance – across industries – to navigate complexities and make informed decisions aligned with your objectives.

Key questions to consider include:

What are the specific financial terms of the offer?
What legal considerations should be addressed before proceeding?
How will the offer impact the operational aspects of our business?
Are there any ambiguous or unclear points that need clarification?
How can SEA help navigate these complexities and ensure a favorable outcome for both the business and the management team?

Involving Stakeholders: Who Should Be at the Table When Evaluating an Offer?

When considering an offer, it’s crucial to involve the right stakeholders in discussions. This includes internal stakeholders such as executives, board members, and key employees, whose insights and perspectives can be invaluable. By engaging a diverse range of stakeholders, you can ensure comprehensive decision-making and alignment with your business objectives.

When assessing offers, it’s important to discern between types like IOIs (Indications of Interest) and LOIs (Letters of Intent).

IOIs are preliminary offers expressing a buyer’s interest in acquiring a company, often based on limited information. They outline the proposed terms and conditions but are typically non-binding, serving as a starting point for negotiations.

LOIs (Letters of Intent), on the other hand, are more formal documents that outline the key terms and conditions of a potential deal in greater detail. They indicate a stronger commitment from the buyer and serve as a roadmap for further due diligence and negotiation, often leading to a binding agreement.

Determine what information you’ve shared and the motivations behind each offer. Understand whether terms are binding and assess the alignment with your company’s objectives. Explore if the offer is based on financial metrics, strategic fit, or other factors.

Are You Assessing Offers Holistically?

In evaluating offers, it’s essential to consider factors beyond financial valuation, including cultural fit, strategic alignment, and growth potential . Understanding the potential risks and challenges associated with different offer types is vital for informed decision-making. Identifying deal breakers and non-negotiables early in the process helps streamline negotiations and align with your business objectives.

Next Steps With Strategic Exit Advisors

Navigating unexpected offers in the lower middle market demands careful consideration and expert guidance. At SEA, your personal and financial goals are our priority. We support your needs during every aspect of our process to honor your work and relieve any concerns around:

Earning the best value for your business.
Achieving your ultimate exit.
Taking care of your people during the transition of ownership.
Making certain the business’ culture endures.
Streamlining the exit process.

By aligning with SEA as your trusted advisor, you gain access to tailored insights, strategic guidance, and a collaborative partnership aimed at maximizing value and ensuring informed decision-making throughout the transaction process.

Stay tuned for our next installment of “I Received an Offer, What Do I Do?” where we dig deeper into the dos and don’ts of mergers and acquisitions transactions with “Demystifying Deal Points: Understanding the Essentials.”

The SEA Difference

When entrepreneurs work with SEA , they are able to collaborate with a team of M&A experts to overcome challenges and optimize their strategic exit. At SEA, we are committed to understanding your transition goals and tailoring our process to ensure a clearly defined outcome.

Whether you’re on the buy side or the sell side , our comprehensive advisory team is ready to navigate challenges, optimize strategies, and contribute to a seamless and successful exit.

Reach out to us anytime at (215) 489-8881 or schedule a conversation .

I Received an Offer, What Do I Do? A Blog Series on M&A Do's and Don'ts

Tue, 20 Feb 2024 13:51:39 GMT

Building a Business with Big Ideas and Strong Culture

The entrepreneur’s journey is not an easy one, though from the outside looking in, it might seem that for some, success is a mixture of luck and knowing the right people. However, if you’re in business you know: luck favors the prepared.

There are over 30 million small businesses across the United States and the reality, according to the U.S. Bureau of Labor Statistics (BLS), is that 1 in 5 businesses will fail within the first year of operation.

Despite the staggering failure rate business owners face, the success stories of entrepreneurial-minded organizations beating the odds and achieving remarkable success are a testament to resilience , perseverance, and a willingness to learn from setbacks.

If you have a successful, profitable business, congratulations: you have beaten the odds and represent an attractive acquisition target for another company.

What To Do When You Receive an Offer Out of the Blue?

You may have received inbound enquiries from buyers. While unsolicited offers are exciting they are usually not what they appear to be. You may have even shared certain financial information without a real expectation of a next step.

But now you have an offer to buy your business. It could be more than you’ve ever imagined. It could be so low that you don’t pursue it.

Our goal in this series is to educate entrepreneurs so that they understand the full spectrum of support, options and more importantly, the value Strategic Exit Advisors (SEA) is able to unlock as your trusted advisory team. With experience across industries , advanced insights and analytical tools, SEA’s team has the expertise to optimize deal structure and ensure you achieve your best exit – the exit you deserve.

We know that in this environment, buyers are investing heavily in “ proprietary deal flow ” which means reaching out to businesses directly and getting good “off market” deals. However, we want you to be prepared and protected.

The goal of this 8-part series is to provide entrepreneurs with the tools to field inbound offers and know exactly what steps to take to help you maximize value, maintain your legacy and provide opportunities for your employees.

The Do’s and Don’ts of What do Do When you Receive an Offer

As an intro to this blog series, “ I Received an Offer, What Do I Do? A Blog Series on M&A Do’s and Don’ts ” our goal is to help build a strategy on how to react to unsolicited offers and concrete steps to take to make sure you are maximizing value, protecting your employees and people, and maintaining your legacy.

Over the next few months we will focus on:

The Offer: When to Seek a Trusted Advisor

The journey begins with “The Offer,” which is usually unexpected and flattering. What questions should you ask? Who should you involve in your first conversations? Discover when it’s time to seek the guidance of a trusted advisor. SEA’s experts will shed light on the nuances of an offer, the different types of offers, and the various points that are important for you to understand.

Demystifying Deal Points: Understanding the Essentials

Deal points and assumptions form the backbone of any offer. In this section, we demystify these essential elements, providing a clear understanding of what makes a sturdy offer. SEA’s expertise will guide you through the intricacies of deal points shining light on what the important questions are to ask.

Strategic Information Release: Timing is Everything

Timing is critical when releasing strategic information during an acquisition. Learn the art of strategic information release and how to time it perfectly for maximum impact. SEA’s insights will help you navigate this delicate process, ensuring you maintain control and leverage throughout the negotiation.

Sub-Negotiations Unveiled: Beyond Price

Beyond price, sub-negotiations play a crucial role in shaping the success of your transaction and your life post-settlement. Uncover the nuances of sub-negotiations with SEA’s insights, exploring the often-overlooked aspects that contribute to a comprehensive and successful deal. There are hundreds of negotiated deal points beyond price that find themselves in the final purchase agreement and affect you and your employees for years post-close.

The Art of Due Diligence

Concluding an acquisition requires finesse and expertise. In this section, SEA shares its experience and overview of Due Diligence. From finalizing terms to navigating the legalities, gain valuable knowledge to ensure a smooth and effective conclusion to your transaction.

Common Pitfalls: Negotiation NoNo’s You Should Avoid

Negotiations come with pitfalls, and avoiding them is key to a successful acquisition. SEA highlights common negotiation no-no’s, offering guidance on steering clear of pitfalls that could derail your deal. Learn from the experiences of seasoned professionals to enhance your negotiation skills.

Navigating the Psychological Terrain: Ego and Emotional Intelligence

The psychological landscape of a transaction involves managing egos and emotions. SEA delves into the intricacies of navigating this delicate terrain, offering insights into the role of emotional intelligence in fostering a positive and constructive negotiation environment.

Join SEA in this series as we dive deeper into essential strategies and potential pitfalls, as we seek to empower entrepreneurs to make informed decisions and achieve their acquisition goals.

The SEA Difference

When entrepreneurs work with SEA , they are able to collaborate with a team of M&A experts to overcome challenges and optimize their strategic exit. At SEA , we are committed to understanding your transition goals and tailoring our process to ensure a clearly defined outcome.

Whether you’re on the buy side or the sell side , our comprehensive advisory team is ready to navigate challenges, optimize strategies, and contribute to a seamless and successful exit.

Reach out to us anytime at (215) 489-8881 or schedule a conversation .

Strategic Exit Advisors Announces Transition of Bob Cahill to Executive in Residence

Wed, 31 Jan 2024 05:08:15 GMT

Strategic Exit Advisors (SEA) , is pleased to announce the transition of Bob Cahill from his full-time Managing Director position to the role of Executive in Residence .Bob Cahill joined the firm as a Managing Director in 2019, marking an important milestone as SEA began executing its five-year strategic plan. From day 1, Bob played a pivotal role in the firm’s growth, working on sell-side engagements, business development, and both sell-side and buy-side transaction engagements. Notably, Bob achieved his first settlement less than six months after joining the firm full-time.

“It has been a privilege to have Bob Cahill as a Managing Director at SEA. His swift integration into the team and immediate impact on client engagements showcased his dedication and expertise. Bob has been a steady voice and significant contributor as we continue on our strategic growth plan,” said Curt Cyliax.

As a seasoned executive with extensive operational and strategic experience in entrepreneurial businesses, Bob has been an integral part of SEA, focusing on assisting entrepreneurs across various industries in maximizing their exit value. With a career spanning public accounting, real estate, banking, manufacturing and distribution, Bob will continue to provide strategic insights and guidance, leveraging his extensive industry knowledge and experience as a business owner.

In his new role as Executive in Residence, Bob will continue to provide strategic insights and guidance, leveraging his extensive industry knowledge and experience. The SEA Executive in Residence (EIR) program, established to extend the firm’s capabilities in specific industries, taps into professionals like Bob to offer real-time industry intelligence, providing a valuable resource for SEA clients. This ensures clients benefit from the collective expertise and insights of seasoned professionals within SEA’s network.

The SEA team expresses our continued gratitude for Bob’s contributions to our success and of enduring culture. We look forward to working together in this next chapter of success!

About SEA

Strategic Exit Advisors (SEA) is a leading lower middle-market M&A advisory firm dedicated to helping entrepreneurs navigate the complexities of mergers and acquisitions. With a focus on maximizing exit value, SEA provides strategic insights, financial expertise, and operational guidance to businesses across various industries.

Strategic Exit Advisors Supports the Recapitalization of Association Headquarters with Corridor Capital

Thu, 25 Jan 2024 08:56:42 GMT

Ambler, PA – Strategic Exit Advisors (SEA) is pleased to announce their role as the exclusive advisor to Association Headquarters (AH) in the recapitalization of the business with Corridor Capital , signifying Corridor’s entry into the Association Management services sector with its seventh platform investment in its current fund. This strategic collaboration aims to enhance AH’s services, explore acquisitions, and solidify its market position, demonstrating SEA’s commitment to guiding clients through impactful and innovative transactions.

Founded in 1978 and headquartered in New Jersey, Association Headquarters is a leading Association Management Company (AMC) offering a comprehensive suite of outsourced services to national associations and nonprofit organizations.

“Through our partnership with Corridor, we are excited to continue the Company’s upward momentum through growing the customer base, expanding our service offering, targeted acquisitions and continuing to serve our clients with skill, knowledge, care, and quality,” said Association Headquarters President & CEO Bob Waller, CAE.

AH’s Mike Dwyer, Chief Executive Relationship Officer, CAE, added,”SEA ran a very robust process which resulted in numerous qualified opportunities for us to choose a partner. With SEA’s guidance, we found the ideal partner to help us meet our growth objectives.”

Aligned in their dedication to excellence, Corridor Capital and Association Headquarters eagerly anticipate a dynamic partnership, poised to consistently provide outstanding value to clients and stakeholders while uncovering new avenues for growth.

Corridor Capital’s strategic collaboration with Association Headquarters is geared towards elevating and broadening services, pursuing strategic acquisitions, and cementing AH’s standing as a leading force in the association management industry.

The deal team at SEA was led by Managing Directors Rob Waring and Bob Cahill and Vice President Peter Hissey .

In reflecting on the success of this partnership, SEA Managing Director Rob Waring expressed, “it was truly an honor for our advisory team to play a pivotal role in guiding Association Headquarters through the complexities of this deal, providing support and guidance along the way.”

The strategic partnership with Corridor Capital signifies a pivotal moment in AH’s journey, providing a foundation for continuous growth and innovation in the evolving field of association management services.

“We recognize the importance of delivering the highest levels of attention and care – it was our honor to serve as the advisor to Association Headquarters, guiding them through the intricate details of this partnership with Corridor Capital.” remarked Peter Hissey.

About Strategic Exit Advisors (SEA)

SEA is an investment bank that helps entrepreneurs close the biggest deals of their lives. Specializing in the sale of entrepreneurial businesses, SEA enables clients to achieve their financial and personal goals by managing competitive processes with strategic buyers.

About Association Headquarters

About Corridor Capital

Navigating M&A Trends in 2024: Looking Ahead

Mon, 08 Jan 2024 10:42:54 GMT

Working Through Uncertain Times: The New Normal

As we step into 2024, the landscape of mergers and acquisitions appears both challenging and promising . A retrospective analysis of the previous year reveals some interesting patterns and shifts that set the stage for an exciting year ahead. Let’s take a look at key trends in 2023 and explore the implications they hold moving forward into the deal landscape of 2024.

Deal Volume and Valuation Trends:

The data from 2023 paints a picture of reduced deal volume, estimated to be 25-30% less than the previous year. However, looking ahead into 2024, there is a positive shift anticipated. Despite uncertainties such as a national election, global conflicts, and rising interest rates, the market expects an increase in deal volume at strong multiples. This additional volume will be largely driven by excess cash waiting to be deployed by corporates and private equity buyers.

2. Financing Challenges and Impact on Structures:

Financing presented challenges for companies in 2023, especially in the lower middle market. Interestingly, while financing and interest rates did not significantly impact valuations, they influenced deal structures . The response was a surge in structured transactions, incorporating elements like seller financing, earnouts, and equity rollovers.

3. Rise in Due Diligence:

Buyers in 2023 exhibited a risk-averse approach, intensifying the level of due diligence. High-quality businesses that could withstand this scrutiny emerged successful, underlining the importance of robust fundamentals. This emphasis on thorough evaluation is expected to persist, making preparedness a key aspect for potential sellers.

4. Activity in the Lower Middle Market:

Despite an overall decrease in deal volume, the lower middle market, encompassing deals less than $250 million, remained robust. The metrics showed increased interest from potential buyers, with the number of interested parties and interactive calls surpassing expectations. Strong businesses in this segment continued to attract attention and maintain market activity.

5. Buyer Aggressiveness and Direct Outreach:

A noteworthy shift was observed in buyer behavior, with increased aggressiveness in reaching out directly to business owners. Sellers entering the market with existing offers experienced enhanced deals, underscoring the advantage of strategic positioning and engagement with experienced advisors like Strategic Exit Advisors (SEA).

6. Outlook for 2024: Increased Volume at Strong Multiples:

Despite the uncertainties looming in 2024, including a national election, global conflicts, and rising interest rates, volume is expected to increase at strong multiples. The additional deal volume will be largely driven by excess cash waiting to be deployed by large corporates and private equity buyers.

7. Private Equity Dynamics:

Private equity groups, holding a significant $2.6 trillion in undeployed funds, are anticipated to deploy capital more aggressively in 2024. The low deal volumes of the previous year are likely to prompt private equity and family offices to pursue opportunities with increased enthusiasm. This heightened competition could potentially lead to stronger valuations for well-prepared companies .

8. Seller Preparedness and Storytelling:

Sellers are advised to be prepared for rigorous due diligence and a larger buyer pool. The emphasis on storytelling — presenting a narrative that encapsulates a company’s journey, challenges faced, and strategies implemented — has become pivotal. Buyers are increasingly interested in understanding a business’s resilience and evolution over time.

9. Stability in Economic Conditions:

Unlike the 2008 financial crisis, the current economic environment exhibits resilience. Efforts to inject money into the economy and maintain a stable banking system have contributed to a more favorable climate. Businesses have shown adaptability and resilience in overcoming challenges.

10. Looking Ahead: An Optimistic Perspective:

As we look ahead, we have an optimistic outlook for 2024. The uncertainties, including the national election and geopolitical issues, are perceived as known variables that businesses have learned to navigate. With strong fundamentals , businesses are expected to command favorable valuations.

M&A trends observed in 2023 serve as a compass for the journey into 2024. While challenges and uncertainties persist, the market has exhibited adaptability and resilience. SEA continues to play a pivotal role, guiding businesses through the complexities of M&A, enhancing valuations, and ensuring strategic positioning in a dynamic landscape.

The success of an M&A deal hinges on numerous factors, but the importance of a strong management team cannot be overstated. A skilled and united management team brings invaluable expertise, leadership, and vision to effectively navigate challenges and capitalize on opportunities that arise from M&A .

When entrepreneurs work with SEA , they are able to collaborate with a team of M&A experts to overcome challenges, navigate the emotional aspects of M&A , and optimize their strategic exit. At SEA , we are committed to understanding your transition goals and tailoring our process to ensure a clearly defined outcome.

Celebrating 17 Years of SEA: Excellence, Impact & Growth

Tue, 02 Jan 2024 10:02:25 GMT

Founded on January 2, 2007, Strategic Exit Advisors set off on a mission with a distinct vision: to assist entrepreneurs in maximizing value and safeguarding their legacy during the intricate process of transitioning ownership.

After 17 years of helping entrepreneurs navigate some of the most important decisions of their lives, we’re taking a moment to look back to celebrate nearly two decades of growth and success.

Helping Entrepreneurs Navigate the Most Important Decisions of Their Lives

Having weathered the storms of the 2007-2008 financial crisis and the challenges brought by the global pandemic, SEA stands resilient. Our enduring agility, coupled with a deep bench of seasoned advisors, has consistently guided entrepreneurs through shifting market dynamics, enabling them to achieve both financial and professional success.

Our Story Continues to Evolve

We view each year as a stepping stone to success, with life-changing deals and transformative partnerships that unlock value for our clients. In the past decade, we’ve been able to improve our internal processes – developing an entrepreneur-centric selling process, the Acquisition Alert and The Readiness Roadmap – and even codify our philanthropic efforts with our Pay It Forward Program .

What’s the Secret to Our Success?

SEA’s journey has always focused on quality of character. We know integrity and transparency matter. Our work is a tribute to resilience, clarity of vision and an unwavering commitment to meet entrepreneurs where they are and honor the emotional impact of what it means to build a successful business.

We understand what it takes to build a thriving and valuable culture. We have made it our priority to engage with thought leaders who understand the incredible value of culture as the operational lifeblood of a valuable organization.

This past fall, we had the distinct pleasure to welcome award-winning CEO, entrepreneur, author, and renowned public speaker, David J. Friedman to our exclusive event at Overbrook Golf Club.

As we continue to grow and evolve as one of the premier M&A and capital advisory firms in the lower middle market, SEA remains committed to prioritizing education and engagement to better empower entrepreneurs to make smarter decisions with strategic insights for their businesses.

SEA’s Commitment to Give Back

Rooted in our core values is a dedicated commitment to philanthropy. We take pride in our Pay It Forward program , which has empowered us to make impactful charitable contributions. In this year alone, we’ve been able to contribute to:

Cecil County Library
Dunamis Foundation
Delaware Children’s Museum
For You Haiti
The Pickles Group

Team Growth: The Heartbeat of SEA

Behind every success story lies a team of dedicated individuals . The SEA team’s shared commitment and passion to help entrepreneurs drives us forward.

We are proud to share that Managing Director Tony Parisi was honored by his Vistage Trusted Advisors 1298 colleagues as their annual Skip Lange Award recipient.

We have also witnessed firsthand the value of dedication with our own Peter Hissey, who first joined SEA five years ago as a Summer Analyst . After gaining three years of experience with Bank of America as an Investment Banking Analyst, Peter returned to SEA as an Associate. This fall, Peter Hissey was promoted to Vice President .

We were additionally privileged to see the additions of Amy Rine and Jamie Lavarnway to our team. Their expertise and dedication have further strengthened our capabilities, contributing to the continued success and growth of the SEA team.

Looking Ahead: A Future Fueled by Experience and Innovation

For entrepreneurs , core values encompass the fundamental beliefs, principles, and ideals that guide the behavior and actions of individuals within an organization.

When these principles are consistently practiced and reinforced, they form the foundation of the organization’s culture. Core values serve as a compass for decision-making, influencing how employees interact with each other, customers, and stakeholders.

To our valued clients, partners, and the entire SEA family, we extend our heartfelt gratitude for being an integral part of our journey.

As we mark 17 years, we express gratitude to our clients, partners, and the entire SEA family. Here’s to the past, present, and the exciting future ahead with Strategic Exit Advisors!

Whether you’re on the buy side , sell side or seeking capital advisory support to achieve your financial priorities, our senior advisory team is ready to help entrepreneurs navigate challenges, optimize strategies, and contribute to a seamless and successful exit. Reach out to us anytime at (215) 489-8881 or schedule a conversation here.

Harmonizing Core Values to Drive Success

Wed, 29 Nov 2023 07:27:53 GMT

For entrepreneurs poised to transition ownership of their business, grow through an M&A transaction , or take their organization to market in 1-2 years, collaborating with an advisory team is not only essential to unlock the full potential of your business – it is fundamentally imperative to do so, in order to successfully navigate the balance between deal-making objectives and broader, financial goals.

Navigating this balance requires not only a strategic mindset focused on deal execution but also an empathetic approach that recognizes the intricate interplay between short-term transactions and the enduring success of the entrepreneur’s emotional journey .

While securing deals is undeniably important, it is also incumbent on your M&A deal team to develop a deeper understanding of your vision, values , and aspirations as an entrepreneur.

How Do You Define Success in an M&A Deal?

At the end of the day, success transcends mere financial gains and a strong balance sheet. It encompasses an intricate network of meaningful relationships, built on trust and fueled by actions that deliver both meaningful and sustainable impact. This is your legacy as an entrepreneur.

In the context of M&A transactions, establishing alignment in core values signifies a fundamental paradigm shift, fostering the groundwork for long-term partnerships and shared objectives, ultimately enhancing the potential for mutual success in transactions.

How Does Accountability Work In Your Organization

Accountability stands as a foundational pillar in the success of any organization, with its significance heightened during the integration process. The implementation of accountability mechanisms is crucial in guaranteeing the effective execution of responsibilities, allowing for the measurement of team and individual performance against predefined standards.

The urgency of proactive decision-making acknowledges the speed of transformative business decisions that can have a significant impact and specifically: value-generating implications.

The Power of Shared Values

During an M&A deal, the alignment of core values between the two organizations is crucial. Shared core values facilitate smoother integration by promoting a sense of common purpose and mutual understanding. When both entities have similar values, it helps bridge cultural differences, fosters collaboration, and eases the process of harmonizing work practices and expectations, ultimately contributing to a more successful and cohesive post-M&A environment.

Identifying Core Values: The Benefits of Value Alignment

Before you can connect with a potential acquisition partner who shares your core values, you need to clearly define what those values are. Your core values are the guiding principles that define your company’s culture and behavior.

When core values align, some of the key benefits of connecting through shared values include:

Enhanced Collaboration : Collaborating during integration leads to a smoother transition, as both parties understand and respect each other’s perspectives.
Long-Term Partnerships : Transactional relationships often fizzle out after the initial deal is closed. Value-aligned partnerships, on the other hand, have the potential to develop into long-term relationships that evolve and adapt over time.
Shared Vision : When you and your clients share core values, you’re likely to have a shared vision for the future. This alignment can lead to collaborative goal-setting and a more strategic approach to achieving common objectives.
Innovation : Value-aligned partnerships can foster innovation and creativity. When both parties are driven by the same principles, they’re more likely to brainstorm novel solutions and ideas.
Higher Satisfaction : Clients who feel understood and valued as more than just customers are likely to be more satisfied with the working relationship. This can result in higher retention rates and a positive reputation for your business.

Cultivating Value-Aligned Relationships

So, how do you go about cultivating value-aligned relationships with clients to build additional value of your company? Here are some steps to consider:

Be Authentic : Authenticity is key to attracting clients who resonate with your values. Clearly communicate your core values in your marketing materials, website, and interactions.
Ask the Right Questions : During your initial interactions, ask questions that help you understand the client’s values and priorities. This will give you insight into whether there’s potential for alignment.
Share Your Story : Share stories and examples that highlight your core values in action. This not only showcases your commitment but also resonates with clients who share similar beliefs.
Listen Actively : Actively listen to your clients to understand their values, concerns, and goals. This will help you tailor your offerings to meet their needs and expectations.
Highlight Case Studies : Showcase case studies that demonstrate how your values-driven approach has led to successful outcomes for clients. This can serve as proof of your commitment and expertise.
Set Clear Expectations : Clearly outline your values and expectations from the start. This transparency helps clients make an informed decision about whether they align with your approach.

When your core values resonate with those of your clients, it sets the stage for collaboration, loyalty, and shared achievements.

The Future Demands Swift Choices, Calculated risks, and Immediate Actions

For entrepreneurs , core values encompass the fundamental beliefs, principles, and ideals that guide the behavior and actions of individuals within an organization.

Choosing the Right Investment Bank

When entrepreneurs work with Strategic Exit Advisors , they are able to build a bench of experts to overcome obstacles, navigate complex challenges, and optimize their strategic exit. This team of seasoned professionals brings a wealth of experience in areas such as financial planning, legal considerations, market analysis, and negotiation strategies. By assembling a comprehensive advisory team, entrepreneurs can not only enhance their decision-making but also gain valuable insights that contribute to a seamless and successful exit strategy.

At SEA, we are committed to understanding your transition goals and tailoring our process to ensure a clearly defined outcome.

Know the Score: Level Up With Strategic Accountability

Mon, 13 Nov 2023 02:45:56 GMT

ORGANIZATIONAL VALUE: STRATEGIC THINKING BEYOND TRADITIONAL METRICS

What sets high-performing organizations apart from their competitors? The strong foundational elements of accountability, proactive strategies, and shared core values drive organizational success. They prioritize what’s working, trim the fat of what isn’t working, and continue to improve processes and procedures through routine audits.

CRAFTING A COMPANY SCORECARD TO DRIVE STRATEGIC VALUE

A healthy and effective organizational culture is built on a foundation of actions that align with stated values, creating an environment where employees are empowered to live those values in their daily work.

In such a culture, actions speak louder than words, shaping the organization’s identity and influencing its long-term success.

However, it’s also crucial to define how your organization keeps score of the wins while mitigating losses.

In advance of a readiness roadmap that prepares entrepreneurs to transition ownership of their business, your company Scorecard serves to:

Nurture accountability based on mutual goal-setting
Support opportunities for continuous improvement and strategic growth
Implement data-driven decision-making to innovate and adapt

DOES YOUR SCORECARD DEFINE ACCOUNTABILITY?

High-performing organizations have a culture of accountability where each team member takes ownership of their responsibilities and outcomes. This accountability extends to individual and collective goals, fostering a sense of responsibility and commitment to achieving results.

Measuring accountability with a tailored company Scorecard in high-performing companies can be essential for assessing the effectiveness of their culture and practices.

Here are three ways to measure accountability in such organizations:

1.MEASURABLES

High-performing companies establish clear measurables for individuals and teams. Monitoring and evaluating progress toward these numbers provide a tangible way to measure accountability. When employees consistently meet or exceed their performance targets, it indicates a strong sense of ownership and accountability.

2.QUARTERLY CONVERSATION™

Conducting Quarterly Conversations with employees can help assess accountability. Employees who actively participate in these processes, take responsibility for their development, and demonstrate a commitment to improvement are likely to exhibit a high level of accountability.

3. THE ISSUES SOLVING TRACK™

Using IDS® (Identify, Discuss, Solve) sessions, organizations can monitor how incidents, issues, or mistakes are addressed, revealing accountability levels. In high-performing companies, accountability is not only about taking credit for successes that drive value but also about taking responsibility for optimizing operations and productivity.

These measurement methods can help high-performing companies assess and reinforce accountability throughout their organization, ultimately contributing to sustained success and accelerating growth opportunities.

DOES YOUR SCORECARD PROMOTE PROACTIVE STRATEGIES FOR SUCCESS?

Renowned management consultant Peter Drucker once said: “The best way to predict the future is to create it.” This quote underscores the need for proactive strategies in today’s dynamic business landscape. Making immediate decisions, taking calculated risks, and swiftly acting are imperative. Proactive strategies encourage teams to embrace innovation, make informed decisions, and continuously strive for improvement.

Core values are the bedrock of any organization. They guide behavior, shape culture, and influence how employees engage with each other, customers, and stakeholders. Before connecting with clients who share your core values, it’s crucial to define these principles that define your organization’s culture.

DOES YOUR SCORECARD ENCOURAGE INNOVATION AND ADAPTABILITY?

Organizations prioritizing strong fundamentals can encourage innovation and embrace change as a part of their culture. They create an environment where employees are empowered to propose new ideas, take calculated risks, and adapt to evolving market conditions swiftly. This culture of innovation then allows them to stay ahead of the competition by understanding that success is shared throughout the organization.

When team members have a clear understanding of their roles and work within a well-defined framework, it enhances efficiency and effectiveness. In turn, this can drive organizational growth and unlock significant value.

High-performance cultures promote accountability through a company Scorecard, encouraging innovation and adaptability. By maintaining strong core values, they foster growth and gain a competitive edge. Using Measurables, Quarterly Conversations, and The Issues Solving Track, operations leaders can ensure a flexible and resilient culture of ownership and responsibility, going beyond traditional success metrics.

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At SEA, we pay close attention to your unique transition goals and customize our approach to achieve a well-defined result. Unsure where to begin? Reach out to us at any time at (215) 489-8881 or schedule a discussion with us here to see how we can help you.

*This article was initially written as a Guest Blog by Robert Waring, Managing Director of Strategic Exit Advisors, and was featured on Entrepreneurial Operating System .

From Coaching to Closing: How Entrepreneur-Centric M&A Advisors Elevate Success

Mon, 06 Nov 2023 09:55:02 GMT

Mergers and acquisitions (M&A) can be a complex and often daunting endeavor, whether you’re on the buy side or the sell side of a transaction.

However, the foundation for achieving success in M&A is established long before the M&A discovery process. Although M&A transactions can pose distinctive challenges for both buyers and sellers, the ultimate success is often determined by organizations that have prioritized the development of robust fundamentals and a resilient culture .

The process of buying or selling a company is filled with challenges, from valuations and due diligence to negotiations and legal intricacies making the role of an M&A advisor critical. Yet, not all M&A advisors are the same, and a new breed of entrepreneur-centric advisors is starting to emerge as a key differentiating factor in successful M&A transactions.

The Traditional M&A Advisor: Balancing Buy Side and Sell Side

Before diving into the entrepreneurial approach to M&A advising, it’s critical to understand the conventional role of an M&A advisor in both buy-side and sell-side contexts . These professionals, often investment bankers or consultants, specialize in facilitating the purchase or sale of companies. They provide expertise on various aspects of M&A, including deal structuring, financial modeling, and due diligence. Their role extends to both the buy side and sell side, but the approach may vary.

Traditional M&A advisors tend to focus on numbers and financials, often overlooking the human element of the deal. While they are undoubtedly skilled at optimizing deals for their clients, their approach may lack the personal touch that many entrepreneurs crave. This is where SEA’s entrepreneur-centric M&A advisors come into play.

The Rise of Entrepreneur-Centric M&A Advisors: Transforming Buy-Side and Sell-Side Transactions

Entrepreneur-centric M&A advisors bring a fresh perspective to the world of M&A, and this perspective is equally valuable for those on the buy side and the sell side. They not only understand the intricacies of the deal but also focus on the entrepreneurs behind the businesses, enhancing the experience for both buyers and sellers.

Here’s how entrepreneur-centric M&A advisors elevate the buy-side and sell-side process:

1. Relationship Building for Success

Entrepreneur-centric M&A advisors prioritize building strong relationships with their clients, whether they’re on the buy side or the sell side. They take the time to understand the entrepreneur’s vision, values , and long-term goals. This relationship-centered approach leads to more meaningful and customized advice, as the advisor can align the deal with the entrepreneur’s personal objectives, whether it’s buying a company or selling one.

2. Mentorship for Buy-Side and Sell-Side Newcomers

Unlike traditional advisors who may focus solely on the deal’s financial aspects, entrepreneur-centric advisors often play a mentorship role , especially for entrepreneurial owners interested in taking their company to market in 1 – 2 years. During pre-M&A, they provide guidance and support to entrepreneurs to mitigate weaknesses, unlock value and seize opportunities.

3. Customized Solutions for Objectives

Entrepreneur-centric advisors recognize that every entrepreneur is unique, and this applies to those on both the buy side and the sell side. They tailor their advice and strategies to align with the specific needs and aspirations of their clients. This level of customization ensures that the M&A process is not only successful but also personally fulfilling for the entrepreneur, whether they’re buying or selling.

4. Emotional Support Throughout The Process

M&A transactions are emotionally charged experiences . Entrepreneur-centric advisors are empathetic to the emotional rollercoaster that entrepreneurs often go through during these deals. They provide emotional support , helping their clients manage stress, anxiety, and uncertainty, ensuring a smoother journey on both sides of the transaction.

5. Navigating Legacy Concerns

Entrepreneurs often have deep emotional ties to their businesses, as they’ve poured their hearts and souls into creating them. Entrepreneur-centric advisors understand this connection and help entrepreneurs navigate legacy concerns, ensuring that their businesses continue to thrive even after the transaction, be it on the buy side or the sell side while avoiding these common pitfalls:

Lack of a Clear M&A Plan
Outlining your professional and financial objectives, whether they involve geographic expansion, diversification, or talent acquisition, acts as a framework that channels your efforts and influences every decision, spanning from the selection of your advisory team to the meticulous refinement of your ROI model.
Valuation Errors
Valuation mistakes can lead to buyers overpaying for a business, contributing to the fact that over 70% of M&A transactions often fall short of achieving their ROI goals.
Insufficient Due Diligence
Conducting due diligence is often one of the most involved aspects of the M&A process. Unfortunately, the lack of proper due diligence and the resulting value erosion are widespread issues.
Assuming Too Much Debt
Exercise caution to avoid assuming a burden beyond your capacity. Fluctuations in interest rates and adjustments in your monthly principal payments can elevate stress levels when it comes to servicing debt obligations.
Overestimating Growth
Having a well-defined growth model can offer a glimpse of your anticipated outcomes following an M&A transaction, but it’s common for ego and emotions to obscure a transparent and pragmatic growth model. Demonstrating some humility could prove highly beneficial in such situations.

6. Long-Term Success for Both Buy-Side and Sell-Side Strategies

While traditional M&A advisors may focus on closing the deal, entrepreneur-centric advisors have a broader perspective . They prioritize long-term success and sustainability, ensuring that the merger not only benefits their client financially but also strategically and operationally, whether you’re buying a company or selling one.

Whether you’re considering the buy side or the sell side of an M&A transaction, the impact of entrepreneur-centric M&A advisors is crucial.

At SEA, we pay close attention to your unique transition goals and customize our approach to achieve a well-defined result.

Unsure where to begin? Reach out to us at any time at (215) 489-8881 or schedule a discussion with us here to see how we can help you.

SEA Welcomes Investment Banking Transaction Associate Jamie Lavarnway

Wed, 18 Oct 2023 07:11:13 GMT

Strategic Exit Advisors (SEA) is delighted to introduce Jamie Lavarnway, our newest team member, who joins us as an Investment Banking Transaction Associate.

Jamie brings a wealth of diverse and dynamic experiences to SEA. As a graduate of Bucknell University with Magna Cum Laude honors and a degree in Business Management, she has consistently demonstrated her versatility in various entrepreneurial pursuits. Most notably, Jamie served as the Director of Athlete Content Development for a prominent national youth athlete scouting program and also as a project manager for Pro Baseball Insider’s youth coaching programs.

What truly sets Jamie apart is her unwavering work ethic and meticulous attention to detail. In addition to her business acumen, she graduated from The Art Institute of Philadelphia Culinary Arts program in 2010, reflecting her ability to think on her feet and thrive in fast-paced environments. Her capacity to remain composed under high-pressure circumstances, coupled with her ability to excel in project management, makes her an invaluable asset to the SEA team, positioning her as a strong contributor to SEA’s mission to provide trusted advisory services to our clients.

The SEA team is thrilled to welcome Jamie and her expertise and energy to our organization. Lavarnway’s addition reinforces our unwavering dedication to delivering exceptional service and expertise to our entrepreneurial clients.

To learn more about Strategic Exit Advisors or this program, call us anytime (215) 489-8881 or schedule a conversation here .

The Anatomy of a Successful Deal: Key Components and Strategies to Unlock Value

Tue, 17 Oct 2023 07:21:59 GMT

What Makes an M&A Deal Successful?

The blueprint for success in M&A begins a long time before the M&A discovery process. While mergers and acquisitions (M&A) can present unique challenges to buyers and sellers alike, successful outcomes are overwhelmingly defined by organizations that have focused on building strong fundamentals and a strong culture .

To maximize the synergistic value and navigate the complexities of M&A effectively, organizations should consider the following culture fundamentals as key factors for success, including:

Building a Solid Business Foundation
Nurturing Sustainable Employee Growth and Future Potential
Differentiation and Unique Value Proposition
Strong Financial Performance and Stability

The joining of two (or more) companies should result in values that surpass the mere sum of each party’s individual worth. This synergistic value is the driving force behind M&A and allows entrepreneurial-minded business owners to successfully overcome the challenges associated with organic growth.

How Important are Culture and Values in M&A?

Culture and values can mistakenly be overlooked during M&A but they can significantly impact the success and integration of organizations .

Post-merger, a misalignment in culture and values can send a deal sideways, leading to employee dissatisfaction, friction during change management and ultimately, lost synergistic value and operational efficiency. Recognizing and addressing misalignment early in the M&A process, and working toward the right alignment is crucial for a smooth transition and long-term success.

What Key Factors Unlock Value in M&A

While no two deals are the same, the experience of your advisory team and their ability to navigate the complexities of M&A, can impact your strategic and financial priorities. At Strategic Exit Advisors (SEA), we listen to you, understand your transition goals, and tailor our process to execute a clearly defined outcome.

When it’s time for business owners and operators to navigate ownership transitions, they rely on SEA for experienced leadership and a wealth of operational expertise that encompasses a wide range of strategic backgrounds in various industries.

Our team of executives brings extensive experience in entrepreneurial businesses, having successfully assisted in mergers and acquisitions, corporate finance, business development, and investment banking across diverse sectors. We excel in crafting competitive sales processes that enhance value and ultimately empower entrepreneurs to achieve their optimal exit strategies, including:

Clear Strategic Objectives

Every successful M&A deal begins with a clear set of strategic objectives. Before even considering potential targets, an organization must define what it hopes to achieve through the transaction. Is the goal to expand into new markets, acquire innovative technology, or consolidate industry leadership? Without well-defined strategic objectives, the M&A process can quickly lose direction, leading to costly missteps.

Cultural Alignment

One often underestimated but critical aspect of M&A success is cultural alignment . Merging two organizations with vastly different cultures can lead to employee disengagement, reduced productivity, and ultimately, failure to achieve integration goals . Companies should assess cultural compatibility early in the process and develop a plan to address any disparities. Effective communication and leadership play essential roles in smoothing the transition.

Valuation and Pricing

Determining the right price for the target company is a delicate balance. Overpaying can erode value, while underestimating the target’s worth can lead to missed opportunities. Successful dealmakers employ various valuation methods to arrive at a fair and accurate price that take integration and synergies into account. Understanding the synergies that can be realized post-acquisition is crucial for justifying the purchase price.

Integration Planning

Integration planning should begin long before the deal is finalized. Successful acquirers have a well-thought-out integration strategy in place, addressing technology, processes, and people. It’s important to identify key integration leaders and establish clear communication channels. This planning phase is where the buyer can unlock significant value by realizing synergies.

Financing and Capital Structure

Determining the right financing structure is key to the success of an M&A transaction. Organizations must evaluate whether to use cash reserves, secure debt financing, or issue equity to fund the deal. The choice of financing impacts the capital structure and the organization’s financial health post-acquisition. Striking the right balance is essential to maximize value.

Communication Strategy

Effective communication is vital throughout the M&A process, both internally and externally. Employees, customers, suppliers, and other stakeholders should be kept informed about the deal’s progress and its potential impact. Maintaining transparency builds trust and minimizes uncertainty, reducing resistance to change and increasing the likelihood of a smooth transition.

Risk Management

Risk is inherent in any M&A transaction, but successful dealmakers are adept at identifying, assessing, and mitigating risks . This includes financial, operational, legal, and reputational risks. A comprehensive risk management strategy is essential to minimize potential disruptions and protect the value of the deal.

Flexibility and Adaptability

No M&A deal unfolds exactly as planned. Unexpected challenges and opportunities can arise at any stage of the process. Successful acquirers are flexible and adaptable, ready to adjust their strategies and plans as needed. This agility allows them to seize opportunities and address issues promptly, increasing the likelihood of a successful outcome.

Working With SEA to Unlock Value

M&A involves a complex interplay of strategic planning, due diligence, valuation, culture, integration, legal compliance, and risk management. Achieving a successful outcome requires careful orchestration of these key components and the ability to adapt to unforeseen challenges. For entrepreneurs seeking to transition ownership of their businesses, the lower middle market has shown incredible resilience. As buyers shift their attention toward smaller, more manageable opportunities, lenders are still able to support valuable deals.

Why Entrepreneurs Choose Strategic Exit Advisors

When partnering with SEA, entrepreneurs are able to unlock significant value during their entrepreneurial journey. Whether you find yourself on the buy side or the sell side of a transaction, understanding the benefits of M&A helps to define priorities and maximize value.

At SEA , we listen to you to understand your transition goals and tailor our process to execute a clearly defined outcome. Call us anytime (215) 489-8881 or schedule a conversation here.

SEA Welcomes Investment Banking Analyst Andrei Birladeanu Through Co-op Partnership with Drexel University

Fri, 13 Oct 2023 07:13:35 GMT

The Strategic Exit Advisors (SEA) team is pleased to announce that Andrei Birladeanu , through Drexel University ’s co-op program, has joined the firm as an Investment Banking Analyst.

Andrei is a dual major in Finance and Management Information Systems at Drexel University’s LeBow College of Business. As a member of Drexel’s Finance and Investment Group, Andrei is committed to honing his financial skills and expanding his knowledge of the subject as much as possible. He is also a member of the Drexel Blockchain Club , where he showcases his passion for technology.

Prior to his role as an Investment Banking Analyst at SEA, Andrei worked at BlackRock as an accounting data management analyst, where he streamlined various financial processes, utilizing technology to improve efficiency and drive client satisfaction for portfolios with billions of dollars in assets. Andrei continued working with BlackRock part-time while pursuing a dual major, full-time. Andrei is a first-generation Romanian from Philadelphia’s Greater Northeast and is an avid automotive enthusiast, traveler, and photographer.

At SEA , we recognize that meaningful work can extend well beyond the traditional boardroom or balance sheet and we are committed to helping future business leaders succeed. As partners in Drexel University’s co-op program, SEA ensures a learning environment that fully integrates the co-op analyst as a team member. We’re thankful for our seven excellent co-ops we’ve had to date and look forward to the future of the program!

To learn more about Strategic Exit Advisors or this program, call us anytime (215) 489-8881 or schedule a conversation here .

What’s Your Company’s Emotional IQ? Navigating the M&A Landscape with Emotional Intelligence and Culture

Mon, 25 Sep 2023 10:31:35 GMT

What is Emotional IQ and Why Does it Matter in M&A?

More than just a buzzword, emotional intelligence (EI) is a term that has gained a lot of attention in recent years, and for good reason. It refers to the ability to recognize, understand, manage, and use emotions effectively, as well as influence the emotions of others.

In the context of M&A, emotional intelligence means having the skills to navigate the often turbulent emotional waters that come with merging two companies. High EI overlaps with strong interpersonal skills, especially in the areas of conflict management and communication – crucial skills in the workplace. A strong management team with a high Emotional IQ will be able to maximize value during the transition of ownership .

Why a Culture of Emotional Intelligence Matters in M&A

Mergers and acquisitions are inherently emotional processes. Employees may feel uncertain about their future, anxious about changes, or even resistant to the idea of combining two distinct company cultures. Executives and leaders often face enormous stress and pressure to make the deal work. The blueprint for success in M&A begins a long time before the discovery process begins.

In this context, emotional intelligence can play a pivotal role in ensuring a smooth transition and a successful merger or acquisition.

Managing Employee Emotion s : When two companies merge, employees from both sides can experience a rollercoaster of emotions. They might fear job loss, resent the incoming company, or simply feel anxious about the unknown. Leaders with high emotional intelligence can empathize, communicate effectively, and guide employees to ease the transition .
Cultural Integration : One of the biggest challenges in M&A is integrating two different company cultures. Without emotional intelligence, leaders may underestimate the importance of culture or fail to understand the cultural nuances of each organization. This can lead to friction, disengagement, and ultimately, the failure of the merger. Leaders with high EI are more likely to navigate this challenging process successfully by fostering a culture of inclusivity, respect, and open communication.
Stakeholder Relations : M&A involves dealing with a wide range of stakeholders, including investors, customers, suppliers, and regulatory bodies. Emotionally intelligent leaders can build and maintain positive relationships with these stakeholders, mitigating potential risks and ensuring a smoother transition.
Decision-Making : Emotional intelligence also plays a crucial role in decision-making during M&A. It helps leaders to make informed, rational decisions while also considering the emotional impact on employees and stakeholders. This balance is essential for the long-term success of the newly merged entity.
Conflict Resolution : Conflicts are almost inevitable during the M&A process. Whether it’s a clash of personalities, differences in work styles, or disagreements about the direction of the new company, emotionally intelligent leaders can navigate conflicts more effectively . They are skilled in active listening, negotiation, and finding common ground.

Assessing Your Company’s Emotional IQ

So, how do you assess your company’s emotional intelligence in the context of an M&A deal ? Here are some key questions to consider:

Do Your Leaders Have High Emotional Intelligence? Start by evaluating the emotional intelligence of your leadership team . Are they skilled in understanding and managing their emotions and those of others? Do they demonstrate empathy and effective communication?
How Is Employee Morale? Employee morale is often a good indicator of emotional well-being within the company . Are employees engaged and motivated, or do you notice signs of stress, disengagement, or fear?
What’s the Current Company Culture Like? Take a close look at your company’s culture and the culture of the target organization. Are there significant differences, and if so, how are they being addressed? Are leaders actively working on cultural integration?
Are Stakeholder Relationships Positive? Assess the state of your relationships with key stakeholders, including investors, customers, and suppliers. Are these relationships strong and supportive, or are there signs of tension and uncertainty?
How Are Conflicts Handled? Consider how conflicts are currently managed within your organization. Are they resolved constructively, or do they escalate and create further problems?

Cultivating Emotional Intelligence in M&A

“ I wish I had known then what I know now, ” is a sentiment that many founders realize too late on their entrepreneurial journeys. Improving workplace culture and building emotional intelligence are part of on-going efforts to take the pulse of problem areas in your organization that can be strengthened.

If you’ve identified areas where your company’s emotional intelligence could be improved, here are some strategies to build a stronger culture:

Leadership Training : Invest in leadership training programs that focus on emotional intelligence. These programs can help leaders develop self-awareness, empathy, and effective communication skills.
Open Communication : Foster a culture of open and transparent communication. Encourage employees to express their concerns and provide channels for feedback. Leaders should actively listen and respond to employee feedback.
Emotional Suppor t: Recognize that employees and leaders may need emotional support during M&A. Offer resources such as counseling, coaching, or workshops to help individuals cope with the emotional challenges of the process.
Cultural Training : Provide cultural training to help employees and leaders understand and appreciate the differences between the merging organizations. This can promote a more harmonious culture.
Conflict Resolution Training : Implement conflict resolution training to equip leaders with the skills to address and resolve conflicts effectively, reducing the potential for disruption.

While the lower middle market remains resilient , it’s important for entrepreneurs thinking of transitioning ownership that emotional intelligence is a powerful tool that should not be underestimated – it can mean the difference between a successful merger that thrives or one that falters during integration.

By assessing and cultivating emotional intelligence within your organization, you can navigate M&A with greater ease while increasing the chances of a positive outcome for all stakeholders involved. Remember, it’s not just about the numbers – it’s also about the emotions and culture that shape your company’s identity and future.

Does Your Business Have a Roadmap to Success?

At Strategic Exit Advisors, we specialize in helping entrepreneurs achieve their financial goals. When entrepreneurs work with SEA , they are able to unlock significant value through M&A. Whether you find yourself on the buy side or the sell side of a transaction, understanding the benefits of M&A helps to define priorities and maximize value.

At SEA , we listen to you to understand your transition goals and tailor our process to execute a clearly defined outcome. Call us anytime (215) 489-8881 or schedule a conversation here.

Maximizing Value in M&A Through a Culture of Clear Management Roles and Accountability

Fri, 01 Sep 2023 10:49:12 GMT

When Does Value Begin?

For entrepreneurs who decide to exit their businesses through a sale or grow through M&A , the motivations driving the transaction can vary , yet a unifying fact is that entrepreneurs who choose to partner with a dedicated senior advisory team are able to unlock substantial value. Whether a founder or business owner is the acquirer or the target , it is important to understand that value isn’t determined by a single moment, but rather a continuing series of successful decisions informed by a culture of clear management roles and accountability . When it comes to successful M&A transactions, there’s more at stake than just financial strength and strategic planning. A strong and cohesive organizational culture plays a pivotal role in unlocking and maximizing value .

The Importance of Clear Management Roles

During mergers or acquisitions, companies often find themselves integrating diverse teams , each with their own processes, procedures, and management structures. Without a clear and unified management framework, confusion can undermine the deal, resulting in decreased productivity and missed opportunities. Clearly defined management roles provide a roadmap for the newly formed entity, ensuring that leadership responsibilities are distributed efficiently and in line with the company’s goals.

Enhanced Decision-Making

In the midst of an M&A transaction, decisions need to be made swiftly and with a deep understanding of the organization’s overall strategy. When management roles are well-defined, decision-making becomes more streamlined as each leader knows their specific responsibilities and the decisions they are authorized to make. This eliminates confusion and empowers leaders to make informed choices aligned with the company’s vision . When entrepreneurs partner with Strategic Exit Advisors , our team listens to you to understand your financial goals and tailor a process designed to execute a clearly defined outcome. We understand the emotional aspects involved in selling a business and the importance of culture . While culture has the ability to attract, engage and retain talent it also bears intrinsic value during mergers and acquisitions. Cultural alignment between merging companies is important for a successful integration process and for maintaining a cohesive and productive workforce post-M&A.

Optimized Resource Allocation

In a post-M&A scenario , resources such as human capital, technology, and financial assets need to be allocated strategically to ensure growth and synergy. When roles are clearly defined, the allocation process becomes efficient and focused on the areas that matter most. This prevents duplication of efforts and maximizes resource utilization.

The Power of Accountability

Accountability is a fundamental pillar of any successful organization, and this becomes even more critical during the integration process. Establishing accountability mechanisms ensures that responsibilities are carried out effectively, and the performance of teams and individuals can be measured against predefined standards.

Faster Integration

M&A requires quick alignment of processes, systems, and teams. Accountability mechanisms accelerate this integration process by setting clear expectations and benchmarks. When everyone knows what is expected of them, the integration process becomes smoother, allowing the newly formed entity to hit the ground running.

Cultivation of Ownership

Clearly defined roles coupled with accountability fosters a sense of ownership among team members. When individuals are accountable for specific outcomes, they are more likely to take initiative and work proactively to achieve goals. This mindset shift can lead to increased innovation and efficiency.

Data-Driven Improvement

Accountability involves regular tracking and assessment of key performance indicators (KPIs). This data-driven approach provides insights into what is working and what needs improvement. In an M&A transaction, this is especially crucial as it allows the organization to identify areas that require attention and make necessary adjustments swiftly.

Building Culture

Building a culture of clearly defined management roles and accountability is not a one-size-fits-all endeavor. It requires a comprehensive approach that involves communication, training, and continuous reinforcement.

Communication : Clear communication is the foundation of any successful organizational transformation. Leaders need to effectively communicate the new structure, roles, and expectations to all stakeholders. Transparent communication ensures that everyone understands the rationale behind the changes and feels connected to the larger mission.
Training and Development : To ensure a smooth transition, offer training to team members about their new roles and responsibilities. This could involve workshops, mentoring, and access to resources that help them understand their position in the larger organization.
Recognition and Rewards : Recognize and reward individuals and teams that exemplify the culture of accountability. Positive reinforcement encourages others to take ownership and strive for excellence.
Continuous Evaluation and Improvement : As the organization evolves, regularly review the management framework and accountability mechanisms. Gather feedback from employees and leaders to identify areas of improvement and adjust as needed.

M&A is a significant undertaking that has the potential to strongly influence the present and future success of organizations. While financial strategies and market insights are crucial, they are only part of the equation. A culture of clearly defined management roles and accountability drives value by fostering efficient decision-making, streamlined integration, and a sense of ownership among team members. Additionally, a trusted advisory team will help navigate obstacles and avoid costly mistakes in the process. By prioritizing these aspects, organizations can position themselves for success in the complex landscape of M&A transactions, maximizing value and achieving their growth objectives. For quality companies, the middle market remains strong and partnering with the right advisory team makes a defining impact, enabling entrepreneurs to earn more. At SEA , we listen to you to understand your goals and tailor our process to execute a clearly defined outcome. Call us anytime at (215) 489-8881 or schedule a conversation here.

The Importance of Management Teams in Mergers and Acquisitions

Wed, 02 Aug 2023 14:26:41 GMT

In M&A, buyers tend to favor strong management teams due to their ability to drive the company’s performance and navigate through transitions effectively.

Failure to establish a robust team during the initial stages of entrepreneurship can lead to underwhelming employee performance and potential complications when owners or founders attempt to transfer ownership of the business in the future.

Consistently, when businesses build strong management teams they have a significant advantage when it comes to transitioning ownership of their business through a sale.

A skilled and cohesive management team instills confidence in the buyer regarding the future success and growth potential of the acquired business.

How do Management Teams Drive Value?

Every M&A deal has its own distinct features and potential challenges. To ensure strategic and financial priorities are achieved, entrepreneurs often choose to partner with an expert advisory team to help navigate the intricacies of the process and to successfully overcome obstacles that may be barriers to desired outcomes.

The success of an M&A deal hinges on numerous factors, but the importance of a strong management team cannot be overstated. A skilled and united management team brings invaluable expertise, leadership , and vision to effectively navigate challenges and capitalize on opportunities that arise from M&A .

Strategic Decision Making

During an M&A transaction, strategic decision-making plays a pivotal role. When collaborating with a dedicated and expert advisory team , a capable management drives value by possessing a deep understanding of their organization’s strengths, weaknesses, and growth potential.

Their insights enable them to identify not only better targets but the right targets that align with the M&A strategy with the company’s long-term goals.

The management team’s ability to evaluate potential synergies, assess risks, and make informed decisions throughout the process is crucial for maximizing the value of the deal.

Integration and Cultural Alignment

M&A deals often involve merging two distinct organizational cultures. The management team plays a critical role in facilitating a smooth integration and ensuring cultural alignment . They lead by example, promoting open communication, transparency, and collaboration. A cohesive management team can bridge the gap between the two organizations, fostering trust and minimizing disruptions. Their expertise in managing change helps to streamline operations, retain key talent, and create a unified and productive work environment.

Stakeholder Confidence

In any M&A transaction, stakeholders – including investors, employees, customers, and suppliers – closely monitor the management team’s actions and decisions. A strong and reputable management team instills confidence in these stakeholders, assuring them of the deal’s viability and potential for success.

Stakeholders are more likely to support the transaction when they trust the management team’s ability to lead and execute the integration process effectively. This confidence helps maintain stability, retain key talent, and preserve customer and supplier relationships during the transition.

Risk Management and Problem-Solving

M&A transactions are not without risks and challenges. A capable management team excels in risk management and problem-solving, which are essential for minimizing disruptions and ensuring a successful integration. They proactively identify potential issues, develop contingency plans, and navigate unforeseen obstacles. By leveraging their expertise, experience, and industry knowledge, the management team can mitigate risks and swiftly address challenges, thereby safeguarding the value of the transaction.

Employee Engagement and Retention

M&A deals often create uncertainty and anxiety among employees. A strong management team plays a crucial role in engaging and reassuring employees throughout the process . Effective communication, transparent decision-making, and empathetic leadership are vital to alleviate concerns and build trust. The management team’s ability to articulate a compelling vision, outline career development opportunities, and retain top talent is key to maintaining productivity and achieving the deal’s intended benefits.

Post-Merger Performance

The true measure of an M&A transaction’s success lies in the post-merger performance of the combined entity. A skilled management team understands the importance of seamless integration and focuses on driving operational efficiencies, capturing synergies, and realizing value-creation opportunities. They leverage their experience to optimize processes, align resources, and unlock the full potential of the newly formed organization. Their guidance and leadership are instrumental in achieving the strategic objectives outlined during the M&A process.

Finding Value Through M&A in this Market Cycle

For quality companies, healthy multiples remain and partnering with the right advisory team makes a defining impact, enabling entrepreneurs to earn more.

At SEA , we listen to you to understand your goals and tailor our process to execute a clearly defined outcome. Call us anytime at (215) 489-8881 or schedule a conversation here.

Resilience & Adaptability Define The Lower Middle Market

Mon, 17 Jul 2023 08:44:17 GMT

Well into 2023, the lower middle market has shown resilience and adaptability in M&A transactions during the post-pandemic era. While the first half of the year posed challenges for dealmakers, deal volumes still remain higher than pre-2020 levels.

M&A Advisors See Resilience in the Markets

The lower middle market remains active with lenders willing to provide financing for strong deals. As buyers shift their attention toward smaller, more manageable opportunities, lenders are still able to support valuable deals.

While a slight deceleration in new deal activity occurred toward the end of 2022 and into the early months of 2023, around mid-April, the lower middle market saw an upsurge in seller inquiries.

Sellers who previously were on the sidelines are poised to bring their businesses to market, though we are seeing greater demands for detailed financials and forecasts and slightly more caution on the buy side than during the pandemic-era deals; this means that quality companies have a competitive advantage.

What Drives Value in this Market Cycle?

As in previous cycles of transformation, the current M&A landscape has shifted, reflecting a new normal . However, it’s important to note that fundamentals remain consistent for well-run companies with strong cultures and strong management teams.

For quality companies, healthy multiples remain and partnering with the right advisory team makes a critical difference. The talent and dedication of an experienced advisory team helps entrepreneurs to earn more when navigating the current market, especially when it comes to:

Valuation: Investment bankers play a crucial role in determining the market value of a business involved in an M&A transaction. We conduct comprehensive financial analyses, assess market conditions, and evaluate comparable transactions to determine the valuation range for the entrepreneur’s company.
Deal Structuring and Negotiation: Investment bankers assist entrepreneurs in structuring the M&A transaction to optimize their financial outcomes. We help identify the most advantageous deal structures, which may involve a combination of cash, stock, or other considerations. SEA also acts as skilled negotiators, representing the entrepreneur’s interests in discussions with potential buyers or merger partners. Our expertise helps secure favorable terms, including purchase price, earn-outs, and post-transaction management roles, to enhance the entrepreneur’s financial gain.
Competitive Bidding and Auction Process: In situations where multiple parties are interested in acquiring the entrepreneur’s business, investment bankers employ competitive bidding processes to drive up the acquisition price. We strategically manage the auction process, soliciting offers from interested buyers, and creating a competitive environment. By generating increased demand and fostering a sense of urgency among potential acquirers, SEA helps entrepreneurs achieve higher sale prices and superior deal terms.
Due Diligence and Transaction Execution: Investment bankers provide invaluable support during the due diligence and transaction execution stages of an M&A deal. We work closely with the entrepreneur’s legal and financial teams to ensure all necessary documents are prepared, financial records are audited, and potential risks are identified and mitigated. By meticulously managing these crucial aspects, SEA helps minimize transaction delays and risks, allowing entrepreneurs to complete the deal efficiently and optimize their earnings.

Opportunities for Entrepreneurs

As we navigate the post-pandemic landscape, entrepreneurial businesses that are proactive in embracing change and innovation will emerge as leaders. Buyers are increasingly looking to high-performing yet more affordable, smaller deals as a hedge against recession fears.

As the low-interest rate that fueled the M&A frenzy of the previous years recedes, continued interest has been driven by the historic levels of capital raised over the past decade.

Growing Investor Confidence

Private equity investors have regained confidence as the uncertainties of the pandemic recede. The resilience demonstrated by portfolio companies during the crisis has underscored the long-term viability of private equity investments. Investors recognize the potential for strong returns in a recovering economy and view private equity as an attractive asset class.

Despite facing challenges, the lower middle market continues to show remarkable resilience. While global M&A headlines have disproportionately focused on a sense of uncertainty around megadeals, the lower middle market continues to exhibit strength and resilience.

How to Take Advantage of the Current M&A Market

SEA’s deep bench of advisory experts have the operational experience to navigate challenging market cycles and produce exceptional outcomes.

Entrepreneurial-minded business owners can maximize their exit options by partnering with an advisory team that understands market dynamics, emphasize quality, and are able to adapt deal structures to current market conditions.

When entrepreneurs work with SEA, they are able to unlock significant value through M&A. Whether you find yourself on the buy side or the sell side of a transaction the first step toward realizing your financial goals is to speak with an experienced senior-level advisor.

At SEA , we listen to you to understand your transition goals and tailor our process to execute a clearly defined outcome. Call us anytime (215) 489-8881 or schedule a conversation here.

Peter Hissey Promoted to Vice President of SEA

Thu, 29 Jun 2023 09:52:24 GMT

Ambler, PA, June 27, 2023 – Strategic Exit Advisors is pleased to announce Peter Hissey has been promoted to Vice President of SEA effective July 1st, 2023.

Peter Hissey first joined SEA five years ago as a Summer Analyst . Early on in his summer with Strategic Exit Advisors, he showed a strong aptitude for leadership and a work ethic that set him apart. He was so highly regarded, that in 2018 he participated in prospect and client work throughout the program. After gaining three years of valuable experience with Bank of America as an Investment Banking Analyst, Peter returned to Strategic Exit Advisors as an Associate.

Throughout his time with SEA, Peter has consistently displayed a commitment to excellence, earning the respect and admiration of his colleagues. Currently leading the execution of sell-side mandates and contributing to the evaluation of new prospects, Peter has played a pivotal role in the continued growth of the company.

Senior deal team members Tony Parisi and Rob Waring have wholeheartedly welcomed Peter’s promotion to Vice President with Parisi remarking, “Peter has distinguished himself in serving SEA’s clients with great diligence, empathy and effectiveness, and he is deeply deserving of this promotion.”

Rob Waring added, “Peter has been a tremendous addition to the team here at SEA. He is a unique individual who possesses strong technical abilities and equally strong interpersonal skills. He embodies our core values and is a great asset to the firm.”

SEA Managing Director Curt Cyliax has worked closely with Peter and is thrilled to see this next step in Peter’s career. Cyliax notes the importance that the SEA Summer Analyst Program has in cultivating the foundations of success for younger analysts. Regarding Peter’s promotion Cyliax remarked, “We are delighted to have Peter grow with the company. With his expanding expertise, dedication, and hard work he and Strategic Exit Advisors have a bright future ahead. I am thrilled to see what the future holds.”

Join us in congratulating Peter Hissey on his well-deserved promotion to Vice President at Strategic Exit Advisors.

SEA

SEA Welcomes Summer Analysts George Carey and Colman Egan

Fri, 23 Jun 2023 06:47:56 GMT

Strategic Exit Advisors is excited to welcome George Carey and Colman Egan into our Summer Analyst Class of 2023 . The SEA Summer Analyst program is a career catalyst for eager individuals looking to advance their careers through guidance, mentorship and hands-on experience with the SEA team.

George Carey is currently a student at Columbia University studying Mechanical Engineering, also having previously completed a Physics degree from Fordham University. In addition to his studies, George has been involved in speech and debate and mock trials, where George has placed nationally in competitions. He has previously performed research in the subjects of quantum field theory and lattice model computation and plans to bring his quantitative expertise to the field of finance.

Prior to his role as a Summer Investment Banking Analyst at SEA , George worked as a Summer Analyst at Auramet International, a structured finance and institutional advisory firm based in Puerto Rico that finances and consults mining operations in South America, Africa, Canada and the United States. A native of Kansas City, Missouri, George enjoys staying on top of his fitness, playing chess and other strategy games, skiing, rooting for the Chiefs and
spending time with family and friends.

Colman Egan is a Math and Economics major and Theater minor at Lafayette College with studies focusing on financial mathematics and data modeling. Outside of the classroom, Colman is the treasurer for the Club Soccer Team as well as the VP of Finance for the Lafayette Chapter of Delta Upsilon where he has made it his goal to refine the org anization’s budget to eliminate financial inaccessibility. Prior to working with SEA, he was an IT Intern at Evolve IP as well as a summer camp counselor at Benchmark School. A native of Berwyn, PA, he likes to spend his time watching movies, playing soccer and gradually improving his chess rating.

At SEA, we recognize that meaningful work can extend well beyond the traditional boardroom or balance sheet and we are committed to helping future business leaders succeed. For our Summer Analyst Program and Co-op Experience Partnership with Drexel University, SEA creates and fosters a nurturing learning environment that prepares the leaders of tomorrow for success in business.

Pay It Forward Supports Cecil County Public Library

Tue, 13 Jun 2023 09:00:42 GMT

SEA and Environmental Alliance Support the Friends Foundation of Cecil County Public Library

June 5, 2023 Following the successful sale of Environmental Alliance to Montrose Environmental earlier this year, Strategic Exit Advisors made a charitable contribution to The Delaware Children’s Museum as a part of its “Pay It Forward” program. As a charitable act on behalf of Vice President of Environmental Alliance Paul Miller, a charitable donation of $2000 was made to the Friends Foundation of Cecil County Public Library under SEA’s “ Pay it Forward ” Program.

Reflecting on SEA’s commitment to building community through acts of charity, SEA Managing Director Tony Parisi remarked, “At SEA, it is our unique privilege to support entrepreneurs who have spent their lives building incredible businesses and to help them close the biggest deals of their lives. To collaborate with our clients through our Pay It Forward program to support organizations that have special value to these entrepreneurs is energizing and inspirational.”

SEA

Cecil County Public Library

The Cecil County Public Library’ s mission is to champion reading, build knowledge and inspire curiosity. As a public institution, the library is committed to helping every member of the community achieve their vision of success and to building a strong county of readers, thinkers, dreamers, and doers.

Qualified Buyers are a Key to Successful M&A Transactions

Tue, 06 Jun 2023 08:55:51 GMT

Why is Being a Qualified Buyer Essential for Successful M&A Transactions?

Being a qualified buyer in the context of mergers and acquisitions (M&A) is a crucial factor that can significantly impact the success of an M&A transaction. When someone else’s business becomes yours it’s important that even if you are ready to acquire another business, you are able to demonstrate your ability to harmonize cultures during integration, as culture and values have the ability to make or break a transaction.

Enhanced Credibility

When it comes to M&A, credibility plays a vital role in building trust and securing a deal. Sellers are often cautious about entering into an agreement with a buyer who may not have the necessary qualifications or capabilities to complete the transaction successfully. By partnering with a strong M&A advisory team to connect you with a qualified buyer, you demonstrate to the seller that you possess the financial resources, industry expertise, and operational capabilities required to close the deal.

Enhanced credibility allows you to stand out from other potential buyers and makes the seller more comfortable with the idea of entering into a transaction with you. This, in turn, can lead to smoother negotiations and increase the likelihood of reaching a favorable deal. Sellers are more likely to engage in discussions and consider your offers seriously when they perceive you as a qualified buyer. Ultimately, being seen as a credible buyer enhances your reputation and fosters better relationships within the M&A community.

Competitive Advantage

M&A transactions are often highly competitive, particularly when attractive companies are involved. When it comes to transferring ownership of a business, investment bankers serve as confidential, expert guides in the selling process to help entrepreneurs maximize value while avoiding common and costly mistakes .

Having the necessary qualifications positions you as a serious contender, setting you apart from other bidders. This advantage not only increases your chances of securing the acquisition but also allows you to negotiate from a stronger position. Qualified buyers are more likely to be taken seriously by the seller and may have more room to negotiate favorable terms. This competitive advantage can be a differentiating factor in a crowded M&A market and significantly enhance your chances of closing a successful deal.

Access to Exclusive Opportunities

In the world of M&A, attractive acquisition opportunities are not always openly available or widely advertised. Many deals are conducted through private negotiations or limited auctions, making it essential to have access to an extensive network of industry professionals and intermediaries.

By being a qualified buyer, you gain entry into this exclusive network, which includes investment bankers, brokers, and other intermediaries. These professionals have expert operational knowledge and work closely with qualified buyers who have a proven track record of successful deals. Being part of this network increases your chances of being presented with high-quality, off-market opportunities that may not be accessible to other buyers.

Having access to exclusive opportunities enables you to explore potential acquisitions that align closely with your strategic goals. It allows you to stay ahead of the competition by identifying and pursuing attractive targets before they become widely known or available to the general market.

Being a qualified buyer in the M&A landscape offers several advantages. It enhances your credibility, gives you a competitive edge in securing acquisitions, and provides access to exclusive opportunities.

It is important to remember that it’s not only important to be qualified buyer, it’s equally important to have a qualified M&A advisory team .

When entrepreneurs work with investment bankers, they are able to unlock significant value through M&A. Whether you find yourself on the buy side or the sell side of a transaction, understanding the benefits of M&A helps to define priorities and maximize value.

At SEA , we listen to you to understand your transition goals and tailor our process to execute a clearly defined outcome. Call us anytime (215) 489-8881 or schedule a conversation here.

M&A Lessons Learned: Takeaways from the Covid Years

Wed, 10 May 2023 11:10:55 GMT

Key Post-Pandemic M&A Takeaways

The disruptive years of the global pandemic have been an eye-opening experience for M&A advisors.

With tightened budgets, remote working arrangements, and unprecedented levels of disruption, resilience has become paramount for M&A investment bankers .

As we emerge from these disruptions, it is important to reflect on the lessons learned from this challenging period and remember that SEA ’s experienced team has seen these cycles before and knows how to navigate them with expert insight .

Conditions buoyed by historically low interest rates and a high availability of cheap, debt capital created unique opportunities for active M&A markets during COVID and just as the fog seemed to be lifting, the Silicon Valley Bank failure caused more consternation.

Despite the lingering effects of COVID-year dealmaking and the recent bank failures, the lower middle-market remains very active with prospective buyers offering strong multiples to well-run companies with strong cultures , savvy management teams, and plans for growth.

Yet, it’s important to note that the M&A landscape has also shifted, reflecting a new normal. Here are four key areas that businesses should keep in mind for M&A post-COVID:

Increased Scrutiny on Due Diligence

Valuations will be more closely scrutinized. The pandemic has created volatility in markets, and this means that valuations will be more closely scrutinized now than ever before. Companies will be required to provide more detailed financials and forecasts, and buyers will be more cautious before going through with deals.

Companies may need to provide more detailed financial information and forecasts, which can be time-consuming and resource-intensive. Ultimately, it is important for companies to strike a balance between conducting thorough due diligence and ensuring that the M&A process remains efficient and streamlined to maximize the chances of success.

The pandemic has made it clear that valuations and pricing need to reflect uncertainty. With market volatility and unpredictable conditions, it’s important to take into account potential risks and uncertainties when determining the value of a company and negotiating deal terms. For companies not quite ready to hit the market, it’s important to remember that you have options, and that partnering with trusted M&A advisory will help achieve your financial goals while avoiding costly mistakes .

Distressed Assets

Distressed M&A opportunities will arise. Not everyone has weathered the storm equally, and there will be distressed M&A opportunities available at discount prices. Strategic and financial buyers who have access to capital and are in a position to make acquisitions are eager to snap up companies that are struggling.

Growing Markets

M&A activity will continue to increase. While some deals may be delayed due to uncertainty or governmental restrictions, many companies are looking to M&A to help position themselves for growth in the post-pandemic world. Here are some of the top growing M&A markets post-COVID:

Technology

The technology industry has emerged as a key driver of growth and innovation, and it is expected to be a target for M&A activity post-COVID. As companies adapt to new ways of working and digital disruption, they will need to invest in technology to drive growth.

Healthcare

The healthcare industry has been at the forefront of the fight against COVID-19, and it is likely to see increased M&A activity in the post-COVID era. Companies may look to expand their offerings, invest in research and development, or acquire innovative start-ups to drive growth in this industry.

Energy

The energy sector has been hit hard by the pandemic, but it is expected to rebound and see increased M&A activity in the post-COVID era. As the world shifts towards renewable energy, companies will need to make strategic acquisitions to stay competitive.

Consumer Goods

With changing consumer behavior and preferences, companies in the consumer goods sector are likely to engage in M&A activity to expand their offerings and diversify their product lines.

Financial Services

The financial services industry is expected to see increased M&A activity as companies look to consolidate their operations and streamline their offerings. This could lead to more partnerships and strategic acquisitions in the industry.

These industries are poised for growth post-COVID, and M&A activity is expected to play a key role in driving that growth. Companies looking to expand and drive strategic growth should keep these markets in mind.

Entrepreneurs Earn More With Investment Bankers

We specialize in helping entrepreneurs achieve their financial goals and well into our 17th year, our success has no signs of slowing down.

When entrepreneurs work with SEA, they are able to unlock significant value through M&A. Whether you find yourself on the buy side or the sell side of a transaction, understanding the benefits of M&A helps to define priorities and maximize value.

At SEA , we listen to you to understand your transition goals and tailor our process to execute a clearly defined outcome. Call us anytime (215) 489-8881 or schedule a conversation here.

How SEA’s Operational Knowledge Drives Value

Mon, 24 Apr 2023 14:01:55 GMT

How Entrepreneurs Successfully Transition Ownership of Their Businesses

If you’re an entrepreneur and have built a successful business, it’s important to remember that quality companies don’t go unnoticed for long and it’s not unusual for a buyer to approach you with an unsolicited offer.

So What Happens When You’re Presented With An Unexpected Offer?

Even though you may not have seen it coming, if your business is valuable, this might be the first but certainly not the last offer you receive. Knowing when to sell your business is an essential aspect of entrepreneurship and having the right advisory team on your side will make a huge difference, especially when competitors, strategic partners, or financial buyers express interest.

Build a Bench of Experts

At SEA, we are well aware of the complexity and emotions that go with building a successful business. As seasoned professionals, we understand what you’ve done to develop your organization to make it successful. This includes not only the strength of your leadership team but also the culture and values of your organization. That’s why our goal is to ensure you reap the full reward for your efforts.

When it comes time to transition ownership of their businesses, owners and operators turn to SEA for seasoned leadership and a deep bench of operational expertise that spans a breadth of strategic experience with entrepreneurial businesses across dozens of industries.

As a team of executives with a vast array of operational experience in entrepreneurial business, SEA has supported mergers and acquisitions, corporate finance, business development and investment banking across industries. We are able to create a competitive sales process that drives value and ultimately, empowers entrepreneurs to earn their best exit.

The team at Strategic Exit Advisors will help you assess the real worth of your business and provide guidance when engaging with potential buyers’ M&A teams in order to effectively negotiate.

Succession, Unexpected Offers, & Pre-M&A Readiness Roadmap

When entrepreneurs desire to make their companies more profitable , easier to manage, and more valuable, they turn to SEA for help in transitioning businesses to family or management teams through succession, responding to unexpected offers or even preparing and optimizing businesses for sale.

Regardless of your situation, our team wants to make it clear that you have options and opportunities. Whether your goal is to pass your business on to family members or existing management, respond to unexpected offers, or optimize the sale process, we are prepared to help you achieve your professional and financial goals.

To succeed as an entrepreneur, you need strong business acumen and the ability to learn quickly. But in a sales process, having access to a robust advisory team for collaboration is even more critical. The right advisory team provides access to a pool of experts and unlocks valuable perspectives when engaging with prospective investors, buyers, and clients.

What does it mean when a deal appears to be too attractive?

SEA is here to protect your best interests . Deals that initially appear attractive—in terms of generating short-term value—can often fail due to internal and business inefficiencies not noticed during the pre-merger strategic due diligence. Research suggests that many organizations overlook the potential risks related to culture, organizational structure, and management dynamics when deals are made, leading to disappointing and costly results down the road. It is important for businesses to take a holistic approach when assessing potential deals, considering all aspects of their short-term and long-term implications.

When it comes to M&A, Strategic Exit Advisors will be your trusted partner to ensure that as an entrepreneur your organization will:

Earn the best value for your business
Achieve your ultimate exit
Take care of your people during the transition of ownership
Make certain the business’ culture endures
Streamline the exit process

At SEA , we listen to you to understand your transition goals and tailor our process to execute a clearly defined outcome. Call us anytime (215) 489-8881 or schedule a conversation here.

SEA Welcomes Investment Banking Analyst Luca Fimmano Through Co-op Partnership with Drexel University

Tue, 11 Apr 2023 09:55:56 GMT

Strategic Exit Advisors (SEA) is pleased to announce that Luca Fimmano , through Drexel University ’s co-op program, has joined the firm as an Investment Banking Analyst.

SEA began its partnership with the co-op program thanks to Curt Cyliax , a Drexel graduate and former co-op student. Our goal as a partner in this program is to provide one week of on-the-job training and gradually integrate participants into live deals and prospect outreach. The Drexel co-op experience empowers students to succeed, allowing them to graduate with up to eighteen months of full-time experience in a professional environment.

Luca is an Honors student at Drexel University’s LeBow College of Business studying Finance and Supply-Chain Management. Along with his studies, Luca serves as a delegate on the Dean’s Student Advisory Board, where he is helping to develop student workshops to educate Drexel students about financial literacy and various business programs, as well as working on a podcast featuring faculty at Drexel. Prior to his role as an Investment Banking Analyst at SEA, Luca worked at Chubb as an International Financial Analyst. He learned how to implement a multitude of processing systems to streamline accounting transactions and used financial software to monitor international account balances. A native of York, PA, Luca enjoys playing sports, traveling, cooking, and spending time with family and friends.

At SEA , we recognize that meaningful work can extend well beyond the traditional boardroom or balance sheet and we are committed to helping future business leaders succeed. As partners in Drexel University’s co-op program, SEA ensures a learning environment that fully integrates the co-op analyst as a team member. We’re thankful for our five excellent co-ops we’ve had to date and look forward to the future of the program!

To learn more about Strategic Exit Advisors or this program, call us anytime (215) 489-8881 or schedule a conversation here .

How the Silicon Valley Bank and Signature Bank failures affect lower middle market companies

Thu, 06 Apr 2023 06:59:29 GMT

The Silicon Valley Bank Run

On March 10, 2023, the California Department of Financial Protection and Innovation closed Silicon Valley Bank. The state agency appointed the Federal Deposit Insurance Corporation ( FDIC ) as receiver.

At the time of closure, SVB was reportedly the second largest bank failure ever. Leading up to the bank run on SVB, it was the 16th largest bank in the U.S. with around $209 billion in assets and $175 billion in deposits as of year-end 2022.

While Silicon Valley Bank fell to its knees, there is still hope for entrepreneurs looking to thrive in this market, even as the Fed continues to try and cool inflation to a target of 2%.

Silicon Valley Bank and Signature Bank Failures Effect on Lower Middle Market Companies

Over the last month, headlines around the world focused on the bank failures of start-up focused lender Silicon Valley Bank and Signature Bank along with increased scrutiny on the overall health of the banking system. The uncertainty has rattled financial markets the past several weeks and larger banks have reportedly begun to tighten lending .

Current Challenges

On top of the current banking turbulence over the last year, we’ve seen market headwinds that continue to affect middle-market companies. Higher interest rates and tightening credit aside, continued fears of a prolonged recession persist. Owners we talk to continue to struggle to fill open positions in a tight labor market. Some sectors are beginning to feel the effect of these challenges .

Beyond the Headlines

With the current backdrop, owners are concerned about the frothiness of selling the business in light of all of the economic factors. While the Private Capital Markets are not immune to the economic circumstances, we’ve found the lower middle market has not been affected by the turbulence as much as their larger counterparts have been. The headlines you hear or read about are focused on the struggles of those larger companies.

For companies that are well run with great cultures , strong management teams, and a plan for growth, the lower middle-market remains very active with prospective buyers offering strong multiples. The market feedback for the strength is a result of three contributing factors.

Factors Contributing to Strong Multiples

There’s still a lot of cash that has been accumulated by strategic buyers , while financial buyers have monetized investments through the strong market and have capital to deploy on new investments. In turbulent times strategic buyers tend to return to the market ready to deploy cash from the balance sheet. They look to capitalize on the uncertainty and grow through acquisition of competitors or similar companies.

Secondly, with the upper end of the middle market challenged to finance deals, larger financial buyers are coming to the lower middle market to put their funds to use. The larger buyers have the ability to buy several companies over a short period of time and combine the companies. This creates an enterprise that is attractive and positioned for continued market growth. In essence they can buy smaller companies, build an enterprise and achieve healthy returns for their buy and build strategy, when they exit.

Finally we’ve been working with buyers that have cash on their balance sheets ready to deploy. In several cases they have decided to acquire companies without the use of debt financing to close the transaction. They have the patience and ability to wait for the financial markets to achieve a more steady state, at which time they will leverage the acquisition and return their equity investment. The returned equity will be used to make another acquisition and grow the portfolio holdings.

As businesses seek to remain competitive and adapt to evolving market conditions, mergers and acquisitions are not merely a way for entrepreneurs to transition ownership of their businesses – M&A serves as a power growth tool for entrepreneurs to make their companies more profitable and easier to manage while increasing market share.

At Strategic Exit Advisors , our senior-level deal team members have seen it all and are ready to guide you to your next chapter of success. We listen to you, understand your transition goals, and tailor our process to execute a clearly defined outcome. Call us anytime (215) 489-8881 or schedule a conversation here .

SEA’s “Pay It Forward” Program Supports The Delaware Children’s Museum in Wilmington, DE with a Generous Gift

Wed, 29 Mar 2023 09:27:05 GMT

March 22, 2023 After the successful sale of Environmental Alliance to Montrose Environmental last month, Strategic Exit Advisors made a charitable contribution to The Delaware Children’s Museum as a part of its “ Pay It Forward ” program.

SEA’s Pay it Forward program is designed to give back to community endeavors that are important to our clients. It continues to be overwhelmingly received by our entrepreneur clients who generously donate their own time and money to both global and community charities. By Paying it Forward we hope to play a small part in making the world a better place.

Bill Smith, Environmental Alliance’s owner and President, directed an $8,000 donation to the Delaware Children’s Museum (DCM), where Jen Bush and her team use the power of playful learning to develop creative minds for kids like Christian, our friend in the cover picture.

Reflecting on being able to take part in SEA’s Pay It Forward initiative and support the DCM, Bill Smith remarked, “I am proud to be a founding member of the Delaware Children’s Museum. The DCM is a tremendous place for youngsters to stretch their imaginations. And, the organization’s management and staff are growing the museum with great innovation, heartfulness and integrity.”

SEA

Delaware Children’s Museum

The Delaware Children’s Museum (DCM) provides children and their families from diverse backgrounds with a comfortable, accessible, fun and stimulating environment where they enjoy spending time together; develops innovative ways to help children learn through play and to complement the learning that takes place at home and at school and presents content across multiple disciplines in a way that invites exploration, encourages learning and creates connections between visitors and the world.

Strategic Exit Advisors supports successful sale of Environmental Alliance to Montrose Environmental Group, Inc. (NYSE: MEG)

Thu, 23 Mar 2023 09:47:35 GMT

March 20, 2023 Strategic Exit Advisors (SEA) is proud to announce the successful sale of Environmental Alliance , a leading environmental engineering and consulting firm in the Mid-Atlantic, to Montrose Environmental Group, Inc. (NYSE: MEG), a national leader in environmental services with over 2,500 employees across 75 locations around the world.

Environmental Alliance established its position as a leader in environmental remediation and assessment primarily in the Mid-Atlanta area, particularly in the State of Delaware. The company has a premier track record as an environmental engineering and consulting firm, providing high-quality, responsive, and cost-effective environmental services to public and private sector clients in a six state region.

Bill Smith, Environmental Alliance’s owner and President, remarked, “I am thrilled for the future of our company and our people as part of Montrose. SEA was a trusted advisor in helping me sell my business, which I founded in 1991 and built with my good friend and partner, Paul Miller, along with my outstanding team.”

As a member company of Montrose, Environmental Alliance is operating with all its employees and with Montrose, is able to expand and provide additional services previously not offered to their clients. The sale to Montrose also presents growth experiences for all of Alliance’s associates and creates an exciting time for them to expand their professional expertise.

Tony Parisi and Bob Cahill, Managing Directors, and Peter Hissey , Associate, at SEA, led the sale process for Environmental Alliance. Tony reflected, “We are enormously grateful to have served Bill and his excellent team. Bill built Environmental Alliance to be consummately reliable and yet dynamic in its growth. We were fortunate to work with a client who had great foresight for his company and employees. Montrose Environmental Group was an excellent partner.”

Montrose Environmental Group: Montrose is a leading environmental services company focused on supporting commercial and government organizations as they deal with the challenges of today and prepare for what’s coming tomorrow. With more than 2,500 employees across over 75 locations around the world, Montrose combines deep local knowledge with an integrated approach to design, engineering and operations, enabling the company to respond effectively and efficiently to the unique requirements of each project. From comprehensive air measurement and laboratory services to regulatory compliance, emergency response, permitting, engineering and remediation, Montrose delivers innovative and practical solutions that keep its clients on top of their immediate needs – and well ahead of the strategic curve. For more information, visit montrose-env.com .

SEA

Strategic Exit Advisors’ Managing Director Tony Parisi Receives Skip Lange Award

Wed, 15 Mar 2023 08:39:31 GMT

March 9, 2023 Strategic Exit Advisors is pleased to announce that Managing Director Tony Parisi was honored by his Vistage Trusted Advisors 1298 colleagues as their annual Skip Lange Award recipient. Jim Lucas , Vistage Master Chair, presented the award to Tony at their recent meeting.

The Skip Lange Award is given to the member who has provided “exceptional personal and professional contribution to the group and to individual members.”

With over 25 years of experience, SEA Managing Director Tony Parisi has worked within companies and with clients to raise capital, grow revenues, optimize operations and close deals. In reflecting on this recent accomplishment Mr. Parisi remarked, “I am grateful to be a member of our group of excellent professional advisors who are also fantastic people. The praise of the praiseworthy is the highest reward.”

Strategic Exit Advisors (SEA) is an investment bank that understands the emotional journey entrepreneurs face, focusing our work with business owners and founders to find the right buyer to align synergistically with teams, cultures, and values. SEA helps entrepreneurs transition their businesses, maximize value and protect their legacy.

Vistage is the world’s largest executive coaching organization for small and midsize businesses. For more than 65 years, Vistage has helped CEOs, business owners and key executives solve their toughest challenges through a comprehensive approach to success.

Benefits of M&A: Unlock Value, Grow Your Business and Transition Ownership

Mon, 13 Mar 2023 07:14:29 GMT

When transition of ownership occurs through a merger or acquisition, the reasons behind the transaction can vary . However, one thing remains clear: with the right guidance from investment bankers, entrepreneurs seeking the benefits of M&A are able to unlock significant value. Whether an organization is on the buy side or the sell side of a transaction, understanding the benefits of M&A helps to define priorities and maximize value.

Is M&A Right For My Business?

After a lifetime of hard work, M&A can provide entrepreneurs with a rewarding financial exit from their business. Alternatively, entrepreneurs seeking to increase their capabilities are able to do so through a merger or acquisition by gaining access to new technology, resources, a business vertical, or even a more professionalized management team – among other benefits.

M&A Drives Growth

When strategic or financial buyers acquire a business, they are able to leapfrog years of potentially slow, organic growth and overcome organizational challenges such as:

Capital Fundraising & Debt Financing
Cash Flow
Building a Successful Culture
Attracting & Retaining Top Talent

Preparing for the transition of ownership can be overwhelming. A strong advisory team understands the different motivations between financial and strategic buyers and therefore is able to lead the decision-making process to mitigate any potential weaknesses while maximizing deal value.

M&A Can Provide Access to a Defined & Robust Culture

An often overlooked but integral part of entrepreneurship and ultimately a driving factor in M&A, is a successful company culture. A clearly defined sense of a company’s vision and values helps articulate business priorities – or the how and why work gets done. If you’re a quality company with a robust company culture, not only have you witnessed this value drive profits at your organization, what you may not realize is how valuable your business is in the eyes of an investor.

A successful culture can demonstrate how an organization acts or reacts to new initiatives and changing market conditions. Culture isn’t a sidebar in business – it’s everyone’s business in an organization. Understanding culture early on in the process has the potential to avoid difficulties during integration.

When it comes to M&A, successful outcomes hinge on the ability to properly align and combine business cultures . In order to manage cultural integration properly, the merger team must also ensure that the right messages and behaviors are propagated throughout the new organization.

M&A Expands Revenue and Increases Value

By acquiring another business, a company can expand revenue and increase its value quickly by:

Gaining access to intellectual property such as software, trademarks, research and development
Extending product lines with an enhanced offering of products and services
Eliminate a competitor – buy the competition
Enhance economies of scale and buying power
Financial leverage
Obtain infrastructure with access to supply chain, facilities and labor

An increase in market share can allow a business to expand their customer base and gain a larger presence in the marketplace. However, it takes time to sell a business, and an experienced advisory team will ensure to effectively pace the process to avoid deal fatigue and common mistakes .

As businesses seek to remain competitive and adapt to new market conditions, mergers and acquisitions are not merely a way for entrepreneurs to transition ownership of their businesses – M&A serves as a strategic growth stimulant for entrepreneurs to make their companies more profitable and easier to manage.

At SEA , we listen to you, understand your transition goals, and tailor our process to execute a clearly defined outcome. Call us anytime (215) 489-8881 or schedule a conversation here.

New Law Makes it Easier for Small Businesses to Buy, Sell & Merge

Mon, 13 Feb 2023 10:29:19 GMT

Understanding the Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2021

After two decades on the “Campaign for Clarity,” on Friday December 23, 2022 the U.S. House of Representatives concurred with the U.S. Senate and passed H.R. 2617 , the Consolidated Appropriation Act, 2023 – funding the federal government for FY2023. The $1.7 billion omnibus spending bill signed into law by President Biden enacts H. R. 935 : “Small Business Mergers, Acquisitions, Sales, and Brokerage Simplification Act of 2021.”

H.R. 935’s Impact for Small Business M&A

H.R. 935 makes it easier for small business owners to sell their businesses or merge with others so that their companies can continue expanding while supporting job growth.

Previously, the Securities and Exchange Commission’s (SEC’s) 2014 “ no-action letter ” (“2014 NAL”) addressed what was a gray area in the regulatory landscape for small business M&A transactions. The new law, which takes effect at the end of March, removes the requirement for M&A advisors to be registered Broker Dealers through the SEC in qualifying private company M&A transactions. Qualifying private company transactions are defined as seller earnings and revenue of less than $25 million or $250 million, respectively.

For business owners, this means there is more freedom to transition your company via an asset or stock deal while working with an M&A advisor who focuses exclusively in your area of the lower middle market.

Support from the National Small Business M&A Community

With strong bipartisan support as well as support from the North American Securities Administrators Association ( NASAA ), the law provides broad exemptions and guidance following a decades-long effort to codify regulatory relief addressed by the 2014 NAL and later adopted as a NASAA model rule in 2015.

History and Development of this Historic Effort

Previously, in the 2014 NAL from the SEC there were no size restrictions to private market transactions and regulation for who was required to be a Broker Dealer. The Small Business Mergers, Acquisitions, Sales and Brokerage Simplification Act effectively amends the Securities Exchange Act of 1934 to exempt Broker Dealer registration of M&A advisors performing services in connection with the transfer of ownership of smaller privately held companies.

Originally enacted by Franklin D. Roosevelt’s administration, the SEA of 1934 granted the SEC broad authority to regulate all aspects of the securities industry. The SEA of 1934 closely followed the SEA of 1933, which was created and passed into law to protect investors in public companies after the disruptive stock market crash of 1929. It is important to note that the new 2023 amended law provides added protections against fraud and other misconduct, i.e. “ Bad Actors .”

This law provides exemptions to M&A advisors and investment bankers involved in transactions with private companies that do not have any class of securities registered with the SEC and are not required to file periodic reports.

Making it Easier for Small Businesses to Buy, Sell & Merge

The team at SEA has supported this legislation since its inception and continues to advocate for business owners seeking to transition ownership of their businesses. This effort represents a significant win for the M&A community and in SEA’s ability to help small business owners and founders who are ready for the next chapter of their entrepreneurial journeys.

When it comes to understanding the M&A landscape and prioritizing clients’ needs, the experts at SEA are prepared to help business owners take the right path on their entrepreneurial journeys. To learn more about how SEA can help guide you through the next chapter of your success, schedule a conversation here , or call us anytime (215) 489-8881.

The Readiness Roadmap to Value Part 2

Thu, 12 Jan 2023 11:22:42 GMT

Determining Readiness to Sell

In Part 1 of The Readiness Roadmap to Value , we looked at how transferring ownership of a business through a sale is perhaps one of the most overlooked, yet intensely valuable aspects of entrepreneurship.

Being prepared to sell your business will save you time, money and in the long run, help ease the emotional stress of selling the business. And we’ll say it again because it’s important: your company should always be ready to sell.

Transitioning your business through a sale means increased scrutiny on every aspect of what you do and how you do it. Entrepreneurs should always prioritize building a strong organizational and financial foundation by maintaining disciplined management practices. Owners and founders that have done so – while also building strong culture and values – will always be more attractive to buyers or investors. It’s also important to note that costly mistakes can be avoided by bringing on an advisory team early on in the process.

Unlocking Value: Beyond the Readiness & Value Assessment

As an entrepreneur, if you’ve completed SEA’s Readiness & Value Assessment , you have taken the first step toward understanding opportunities to close value gaps and possible blindspots of unrealized value. Without a cost or commitment this initial discovery call takes less than an hour. If your business is ready to sell, then it’s time for prospect positioning to identify key client characteristics to expand the scope of potential buyers with strategic interest to drive a competitive sale.

However, if a Readiness & Value Assessment reveals disappointing or underwhelming results, it’s likely that your organization has significant value gaps. As a result, a deeper dive is needed via SEA’s Value Gap Analysis . This helps entrepreneurs by

Determining critical business strengths & weaknesses
Dialing in on value areas that require improvements

The path to value beyond the Readiness & Value Assessment is created through SEA’s Readiness Roadmap. The Readiness Roadmap provides an actionable plan, on a defined timeline, that empowers entrepreneurs to bridge significant value gaps negatively impacting the outcome of the sale.

It’s important to remember that selling a business is a process and not an event. SEA works with sellers to establish a specific timeline, with a customized process, to increase value and go to market with the strongest value proposition. The advisors at SEA developed a sell-side process to help entrepreneurs achieve their ultimate exit. During this process, the SEA team

Identifies strategic buyers
Stages the release of company information
Drives a competitive process to sell your company
Negotiates and closes a deal that meets your objectives
Achieves financial independence

Your Priorities & Your Transition Goals Guide Our Process

At SEA, we listen to your story to understand the transition goals for your business. Our success together is defined and led by your priorities. Whether your business is ready to sell or there’s work to be accomplished through our Readiness Roadmap – our work prioritizes your personal and financial goals to

Earn the best value for your business
Protect your legacy
Plan for your ultimate exit
Take care of your people during the transition of ownership
Make certain the business’ culture endures

Is Your Business Ready to Sell?

SEA’s Readiness Roadmap helps businesses to organize, prioritize, and delegate tasks in an effective way to prepare for a successful sale and ultimate exit.

SEA guides and facilitates the process with emphasis on accountability: our team will keep tabs on everything your team members need to do and why they need to do it, while making certain everyone is on the same page. Transitioning ownership of a business can be challenging but ultimately, one of the greatest rewards of entrepreneurship.

We are ready to help you on your entrepreneurial journey. Call us anytime (215) 489-8881 or schedule a conversation here .

The Road To Building Value

Tue, 13 Dec 2022 11:19:04 GMT

Build generational wealth
Continue the business legacy
Provide continued employment and growth opportunities for employees
Fund your next entrepreneurial pursuit or retirement

Why Are Investment Bankers Essential When Selling a Business?

When it comes to transferring ownership of a business, investment bankers serve as confidential, expert guides in the selling process that help entrepreneurs avoid common and costly mistakes . These mistakes can make your business receive a subpar valuation or worse, cause the deal to fall apart! More importantly, your investment bank is able to drive value by developing and implementing a competitive process to identify strategic buyers who will pay more for your business .

It’s not just about finding a buyer – the process is designed to find the right buyer that aligns with your company’s culture and values , while being compatible with the buyer’s priorities. Listening to bad and ill-informed advice from the wrong people – maybe your buddies at the country club – adds confusion and hurts your chances of achieving your best exit. A confidential and dedicated investment bank will understand your career and financial goals before developing a process tailored to your priorities.

What Does Being Ready to Sell Your Business Look Like?

Deciding when the right time to sell your business is not a chance decision, although in some circumstances – such as illness or death of a key stakeholder – the timing might be beyond your control. Business owners often ask, “How long in advance should I begin to prepare my company for sale?” The answer is your company should always be ready to sell . However that’s not always the case.

Readiness to sell goes beyond a simple ‘desire to sell’ by transforming and showcasing the best version of your business to interested and competitive buyers. Again, the choice to sell your business should not only align with your career and financial goals, it should reflect a deep care and understanding for the future of your management team, culture, and the legacy of your business. Ensuring that your company is best prepared for a sale will ensure your financial and career goals can be realized.

Strategic Exit Advisors’ Building Value Roadmap helps to prepare business owners for success by providing a Readiness and Value Assessment to estimate the business value and identify significant value gaps.

Unfortunately, sometimes when business owners decide it’s time to sell, there’s a significant amount of work that needs to be done in advance of taking your business to market. This will protect you from receiving an unreasonably low valuation that wastes your time and deal terms that don’t meet your goals. This also saves you the financial heartache of not being able to sell your business or the setback of false starts, failed attempts and endless information requests and negotiations.

For decades, Strategic Exit Advisors has helped entrepreneurs to improve their value posture, building a strong investment proposition that meets market demands. A Readiness & Value Assessment tells you if there will be a market for the business. SEA’s Readiness Roadmap helps business owners with a clear and actionable path to improve their companies – making them more profitable, easier to manage the business, and as a result improving value.

What’s a Readiness & Value Assessment and How Can I Get One?

In part 2 of this series, we will lay out each stage of how our process builds from the Readiness & Value Assessment of your business to a successful sale. As you now know, there’s a significant difference between wanting to sell your business and actually being prepared with a solid, competitive business posture that’s valuable to strategic buyers.

We are ready to help you on your entrepreneurial journey. Call us anytime (215) 489-8881 or schedule a conversation here .

Strategic Exit Advisors Supports Sale of TPI

Thu, 17 Nov 2022 08:50:58 GMT

Strategic Exit Advisors Supports Sale of TPI Environmental to Summit Drilling – Expanding Services and Geographic Footprint in the Lehigh Valley Area

November 3, 2022 Strategic Exit Advisors (SEA) is proud to announce the successful sale of TPI Environmental of Easton, PA to Summit Drilling, a leading drilling contractor in Bridgewater, NJ. The sale represents a strategic move to increase Summit Drilling’s capabilities and more effectively service customers. Currently, Summit Drilling provides a wide range of drilling services to the environmental, engineering/construction, utility infrastructure, and aggregate mining industries.

Regarding the acquisition, Summit Drilling’s President & CEO Ron Bucca remarked, “the team, services, and organizational culture at TPI are a great fit for us. Together, we are a stronger and more valuable contractor for customers in this region.”

Frank Fendler, President of TPI Environmental was equally enthusiastic and expressed, “joining the Summit family of companies is a great opportunity for us and for our customers.”

For 25 years, TPI Environmental has provided drilling, utility locating geophysics and remedial injection services to similar industries. Their large fleet of GeoProbes® and remedial injection capabilities bolsters and complements Summit Drilling’s current services, while adding geophysics, such as ground penetrating radar, line locating and magnifying electron microscopes (EM) to Summit’s list of internal capabilities.

Heading into the deal, Strategic Exit Advisors (SEA) Managing Director Rob Waring supported TPI Environmental’s search for the right buyer and was thrilled by the opportunity to work with Fendler and his team. Regarding the sale, Waring commented,

“At SEA, we are truly grateful to have worked with Mr. Fendler of TPI Environmental to find the right buyer. As one of the top environmental consulting and engineering firms in the Mid-Atlantic region, it’s been a privilege to honor their professional and financial goals, while making sure that the team, services, and organizational culture at Summit Drilling were a great fit. They were amazing partners in this deal.”

At the closing, Fendler enthusiastically added:

“We have built a great reputation here and can now offer more value through Summit’s extensive drilling technology and talented field teams. Their drilling technology, such as sonic, enables us to deliver a broader range of capability to customers while creating new career growth opportunities for our people. The future looks very bright.”

TPI provides top-notch geophysical and drilling services to geologists, engineers, and consultants throughout PA, NJ, MA, CT, RI, and NH.

Summit Drilling uses state-of-the-art environmental drilling, direct push, injection, and vacuum excavation equipment while providing industry-leading expertise to their customers.

Blueprint for M&A Success: Avoid These Common M&A Mistakes

Thu, 17 Nov 2022 07:05:12 GMT

What Does Success Look Like in M&A?

When two separate businesses become one to create a new entity, what is gained? More importantly, what’s at stake that could potentially be lost? A thoughtful and successful M&A touches on every aspect of a business – from HR to finance, legal, marketing and more.

For quality companies, deal multiples remain high as the current marketplace is creating opportunity for investors despite headwinds caused by inflation, interest rate hikes, and the unrest caused by Russia’s invasion of Ukraine. Private Equity and strategic buyers with a large amount of liquidity – and consequently, no need to borrow at high interest rates – are expected to take strategic advantage of buying opportunities.

When it comes time for entrepreneurs to grow or transfer ownership through a M&A, the importance of the deal team cannot be overstated. As your advisory counsel, the deal team oversees the flow of information, reporting, and navigates what is a highly-detailed, complex, and often lengthy process to ensure not only a strong posture before going to market, but success throughout the deal and post-merger integration. Every deal is unique and while common obstacles have tactical and strategic solutions, effective planning and management of the M&A process early on can avoid all too common mistakes.

Vision Without Execution

At a high level, the integration of two very different company cultures is one of the major challenges of any successful M&A. If the imagined synergies that led to the deal are never realized this could cause both financial loss and reputational damage.

The importance of clearly defined priorities, a defined communication strategy, and focused plan to ensure successful integration is crucial, whether the deal is $10 million or $10 billion.

M&A can be a long, sometimes unpredictable and often uncomfortable journey. The emotional journey for entrepreneurs represents a tremendous opportunity to not only get paid for hard work, but also allows for the opportunity to pass the torch onto the next generation of ownership.

There is, however, a common thread running through most botched M&As: failed cultural integration. Building a successful business means building a successful company culture . And, a successful M&A strategy involves a deep dive into understanding the target company and what it will take to make the relationship work.

When it comes time to sell your business , or take on an equity partner , it’s critical to have an advisory team that understands your business and your professional and financial goals.

What Causes M&A Activity to Suffer?

The global economic uncertainty caused by Covid-19 caused an initial contraction in M&A activity in 2020, followed by record breaking M&A activity in 2021 . While the ink on these deals is still drying, it’s easy to see 2022 as a slight pullback in deal volume at a macro level as cross-border deals are down . As companies scrutinize activity with concerns over inflation, rising interest rates, and market volatility, it’s easy to focus on inflammatory news cycles that sell doom and gloom to viewers. In the lower-middle and middle markets, there is still plenty of capital out there looking to be put to work, as deal multiples remain strong for quality companies. Avoiding these common mistakes as you begin your M&A journey will dramatically improve your deal success regardless of market conditions.

Top Common M&A Mistakes

#1 No M&A Plan

Defining your professional and financial goals – whether it’s geographic expansion, diversification or talent acquisition – puts guardrails on your efforts and guides every decision from choosing your advisory team to fine tuning your ROI model.

# 2 Valuation Errors – Overpaying

When valuation errors are made, buyers may overpay for the business which is part of the reason why more than 70% of M&A transactions perform poorly in terms of meeting their ROI targets.

#3 Insufficient Due Diligence

Due diligence can be one of the most complex steps of M&A. A lack of due diligence and value-destruction that comes with it, is all too common.

#4 Assuming Too Much Debt

Be careful not to take on more than you can handle. Interest rate changes and your monthly principal can increase causing stress in your ability to service your debt obligations.

#5 Overestimating Growth

A clear growth model helps provide a vision of what you’re expecting post M&A, though often ego and emotion can cloud a clear and realistic model of growth. A little bit of humility might go a long way.

Be Prepared

Your business is valuable, but what is your business worth to a buyer? Are you ready to sell? SEA’s Readiness Roadmap can prioritize areas of focus, bridge value gaps, and develop a timeline with accountability to optimize value before your business goes to market.

People, culture, and above all, communication represents the lifeblood of every M&A deal. The willingness to properly prepare for an M&A deal determines your ability to succeed. Establishing a clear deal thesis with your advisory team is often an indicator of success, as it enables business owners and your deal team to not only see the finish line, but to cross it together.

When it comes time to navigate the next chapter of your entrepreneurial journey, Strategic Exit Advisors (SEA) has the resources and experience to help you. Call us anytime (215) 489-8881 or schedule a conversation here .

The SEA Co-op Experience with Drexel University

Mon, 31 Oct 2022 09:42:00 GMT

The SEA Co-op Experience

Beginning in 1919, Drexel University’s cooperative education program has empowered students to succeed, allowing them to graduate with up to eighteen months of full-time experience in a professional environment. Since 2020, Strategic Exit Advisors (SEA) has provided meaningful co-op experiences for five Drexel students: Erum Hamid , Brandon Yan , Aayush Desai , Shivani Patel and Matthew Delman .

Our firm’s history with the co-op program dates back to Curt Cyliax , Managing Director at SEA, who is a Drexel graduate and former co-op participant. As a partner in this program, SEA’s goal is to provide two weeks of on-the-job training, gradually integrating the co-op participant into live deals and prospect outreach.

“We want to make the training as interactive as possible,” said Managing Director, Rob Waring. “For example, the best way the co-op can learn how to recast financials is to provide a case study where they get to apply what was taught.”

SEA is a growing firm and is always looking to improve. “What makes a great co-op is someone who not only helps push deals forward, but one who improves our processes and the co-op experience for future generations,” said Peter Hissey, who manages the co-op program at the firm.

Preparing Students for the Real World

Our previous co-op, Shivani Patel, is a rising senior at Drexel. Patel is studying Finance and Economics and is a great example of an individual that has added value to our team, having worked with Peter to help improve communication and training for future co-ops. Before she finished the program, we asked Patel to reflect on her experiences at SEA.

“I completed my first co-op at Comcast HQ with a team of project managers who deployed sales tools, so when I began my second co-op at SEA, I didn’t have an ounce of background knowledge about the world of M&A. SEA’s differentiator is that they have built a learning environment that integrates the co-op analyst as a team member rather than an intern. This allows them to gain hands-on experience on live deals and face-time with clients, which better prepares them for the real-world working environment.”

Aayush Desai completed his co-op at SEA from September 2021 to March 2022. He learned the ins and outs of investment banking by working on live deals, attending prospective and engaged client calls, visiting clients and researching multiple industries across various sectors. Desai recalls,

“During my time at SEA, I was treated as another member of the team and was given meaningful work all throughout my six months there. As a student interested in the world of investment banking and the greater finance sector, I had many opportunities to ask SEA’s talented and experienced team questions and advice about the field.”

Our first co-op, Erum Hamid, helped us craft the program and refine our training and overall co-op experience. She trusted SEA to provide a great experience and we are thankful for contributions to the firm from a professional as well as cultural lens. During her experience, Hamid remembers,

“SEA taught me the importance of culture and community as a professional. During my co-op, I was able to plan and participate in community outreach that aligned well with my personal values. I achieved a true sense of belonging within the firm and felt encouraged to continue my pursuits of creating an impact as a young professional within the investment banking industry and the broader community.

The goal of the Drexel co-op program is to prepare students for work in a real-world environment.

At SEA, we recognize that meaningful work can extend well beyond the traditional boardroom or balance sheet and we are committed to helping future business leaders succeed. As partners in Drexel University’s Co-op Program, SEA ensures a learning environment that fully integrates the co-op analyst as a team member. We’re thankful for our five excellent co-ops we’ve had to date and look forward to the future of the program!

To learn more about Strategic Exit Advisors or this program, call us anytime (215) 489-8881 or schedule a conversation here .

Functional Foundations: When Someone Else’s Business Becomes Yours

Thu, 27 Oct 2022 07:34:16 GMT

What Happens When You Buy a Business?

For entrepreneurs, the path toward success is often a complex and emotional journey that is not for the faint of heart. From Main Street to Wall Street, businesses of all sizes experience everything from the frustrations of start-up mode, to the marathon sprint of building a profitable business and thriving company culture .

Often, the pangs of organic growth can last much longer than most businesses owners would expect. Besides being slow, organic growth can be risky and inefficient. When a company desires growth, a well-planned M&A strategy creates the opportunity to amplify earnings potential and operational capabilities.

Knowing the right time to buy a business is as important as knowing the right time to sell a business . Savvy entrepreneurs and Private Equity firms use M&A as a way to skip the foundational groundwork of building a business, allowing them to leapfrog the competition.

M&A offers both aspiring and seasoned entrepreneurs the ability to take ownership of a successful business without years of fledgling trial and error. The competitive advantage of making someone else’s business your own – through M&A – allows entrepreneurs to bypass the common obstacles of building a business from the ground up. These obstacles include:

Capital Fundraising & Debt Financing
Cash Flow
Attracting & Retaining Talent
Operational Refinement

For entrepreneurs and Private Equity Firms that acquire businesses through M&A, these transactions represent not only the opportunity to purchase a wealth-generating business but its corporate culture as well. When someone else’s business becomes yours, you gain access to the operational backbone of success, including:4

Intellectual property and off-market talent
Enhanced economies of scale
Stronger balance sheets

Is This a Good Deal? New & Additional Capabilities Through M&A

Executives see M&A as an opportunity to increase operational capabilities without the foundational costs associated with research, development, and years spent building brand recognition. A significant challenge when starting a business is in proving the unproven concept. Yes, your idea seems great on paper but how will the market react? Is it scalable? Do you have a customer base? Identifying an established company with consistent revenue and profitability might just be the easiest way to go into business for yourself.

With the support of a seasoned deal team to evaluate the foundational aspects of the business in question, buyers gain a better understanding of:

Current Operations Plans
High Level Financial Model forecasting next 3-5 years
Organizational & Hiring Strategies
Is the current IT Infrastructure ready and capable of successful integration

The advantages and disadvantages of buying an existing business will vary depending on your existing skill set as an entrepreneur and the business under consideration. Success is not guaranteed but the odds can be in your favor with the right deal team to shape the best deal.

And while acquiring another business can last anywhere from 12-18 months, it is essential to have a strong team that understands your business, your career goals, and your financial expectations.

When another business buys your business, it’s important to know how you’ll be evaluated by this potential buyer. Often specific criteria beyond deal terms will identify whether or not competitive gaps are filled, cultural needs are met, the cost benefit and ultimately, how difficult the purchase and integration process will be. Every deal is different and whether you are on the buy side or the sell side , the success of the deal depends on clear, consistent and strategic communication to ensure earning the highest multiples and that post merger integration is a success.

Want to learn more about how the M&A process can help your business? At Strategic Exit Advisors, we look forward to continuing to be your trusted partner.

Call us anytime (215) 489-8881 or schedule a conversation here .

The Difference Between a Financial Buyer and a Strategic Buyer

Thu, 13 Oct 2022 04:48:57 GMT

What Motivates an Acquisition?

Despite recent disruptions, M&A executives are ready to explore post-Covid Era dealmaking environments with a focus on acquisitions, divestitures, and alternative M&A strategies.

According to C-suite executives around the world, a driving factor of recent M&A activity has been in the ability to increase operational capabilities . New or additional capabilities can help organizations reshape their business model to adapt to changing market conditions and in some instances, entrepreneurs divest to streamline portfolios to better align with shifting priorities while sharpening focus.

Still, different types of buyers have different motivations – even when business fundamentals may be similar, such as a desire for sustained growth. However, variable timelines and different motivations can impact the deal in different ways.

When it comes time to sell your business , it’s more than essential to have a talented advisory team to help navigate this next stage of your journey. The emotional aspects of a deal can be overwhelming. After all, as an entrepreneur you’ve built a successful company and a successful company culture – moving past this is no small challenge.

Whether you’re a seasoned entrepreneur or selling for the first time be sure to,

Have clearly defined priorities
Have a defined communication strategy
Have a strong advisory team to help overcome obstacles
Have an understanding of what makes the right buyer and the right deal

Additionally, understanding the different motivations between a financial buyer and strategic buyer is an important step toward earning the highest multiples and ensuring your best exit.

What is a Financial Buyer?

Often, a financial buyer can see a path toward increasing growth quickly, by using opportunities to create efficiencies, increase economies of scale, or by investing in growth marketing. As investors, financial buyers often use acquisitions to quickly and significantly increase the overall value of their holdings and their goal(s) might include growing cash flow, reducing expenses and/or overhead through economies of scale.

Financial buyers are also able to form partnerships with minority stakeholders with greater flexibility – including the opportunity to learn about legacy operations. Financial buyers can be agnostic , often running a variety of companies across differing industries. Most often they are interested in acquiring a company for a period of time, building it up, and then flipping it.

What is a Strategic Buyer?

On the other hand, since a strategic buyer is usually already operating in the same industry, the acquisition represents the identification and absorption of a company with products, services, and culture that closely align with theirs.

Why do most sellers seek out a strategic buyer?

Strategic buyers will pay more than financial buyers because put simply, strategic buyers understand that your company is likely worth more, with the perceived value being much higher.

The acquisition most likely provides cross-selling opportunities immediately, but having similar cultures is important to having a successful integration long term.

Key Differences Between Financial & Strategic Buyer

Whether considering a sale of your business now or preparing for a future transaction , understanding the mindset of different types of buyers is critical to your preparation and decision-making processes. For businesses motivated to sell, but aren’t quite ready, Strategic Exit Advisors’ Readiness Roadmap helps to close any valuation gaps and improve the overall posture of your business to maximize deal value.

Again, while financial buyers look for returns out of the gate and an existing and functional path toward revenue, strategic buyers understand a deeper value in the acquisition of your business – capable of seeing higher future gains – and as a result will pay higher multiples.

The best buyer for your company will be contingent on your short-term and long-term goals and ultimately, with both your career and financial goals.

Want to learn more about how the M&A process can help your business? At Strategic Exit Advisors, we look forward to continuing to be your trusted partner.

Call us anytime (215) 489-8881 or schedule a conversation here .

Changing the Private Equity Playbook: When PE is a Strategic Buyer

Tue, 27 Sep 2022 06:23:53 GMT

Private Equity on the Prowl

Even as the Fed continues to raise interest rates , Private Equity (PE) firms are still benefiting from historically low, Covid-era interest rates , as well as record fundraising – last year fundraising in global private markets grew 20% to reach $1.2tn . That’s a lot of dry power to be put to work.

Unlike Venture Capital (VC) firms who usually don’t buy out entire companies, PE sometimes referred to as ‘Buyout Firms’ often look to acquire entire companies. This gives PE the advantage of having controlling interest in management and/or operational decisions. PE buyouts often happen as leveraged buyouts , in which only a fraction of the capital requirements are put up in cash – the remainder is secured in loans against the acquiring company’s assets.

Deployable Capital is Ready and Waiting

Private equity generated $512 billion in buy out deal value during the first half of 2022 and while PE has been known for huge deals, increasingly private equity firms are targeting smaller, family businesses with the potential for higher median ROI.

Inflation-recession cycles can be short lived and research suggests that investing during a recession is a smart and valuable investment. If PE sees the current market through the lens of growing profits, share and firm value, the current moment makes for an exceptional time to put capital to work, especially as debt becomes more expensive.

When is Private Equity a Strategic Buyer?

When SEA represents our clients on the sell side , and private equity is on the buy side, a PE firm is a technically proficient buyer that is usually looking to acquire 100% of the company.

In some instances, the acquiring PE firm can use funds from a company it already owns to purchase and develop synergistic relationships with said target company. Strategic Buyers are often similar to the seller they find – this includes the seller’s markets or geography, processes, services or products additive to their strategic holding. Their sights are set on future returns and therefore, they’re willing to pay a higher price as a “strategic buyer,” acquiring, reinvesting to grow the company before exiting in any where from 5 years to 15+ years.

When PE is a strategic buyer their focus relies on synergies and integration capabilities, while financial buyers look to make cash straight out of the gate with a focus on earnings growth. A strategic buyer pays more because they see greater ROI down the road, while having access to deeper resources and funding.

Choose the Right Deal Partner

When it comes time to choosing the right deal partner, it’s obvious that money talks. However, it’s critical to understand that a deal aligned with culture and values has the greatest potential to satisfy both buyer and seller.

When PE works with an investment bank as a strategic buyer, financial leverage is key. On occasion, an owner/CEO might stay on as minority stakeholder to help during cultural integration but PE still has the flexibility to offer an all-cash or leveraged buyout when the time comes.

Even though Private Equity has been changing their playbook – with increased interest in smaller strategic targets, and value-creation – the game remains the same.

Strategic Buyers backed by Private Equity Helps our Clients

Tue, 13 Sep 2022 13:43:22 GMT

In recent years, Private Equity has been on fire, surpassing $500 billion in deal value, with 2021 hitting-never-before seen records. Furthermore, the market size of the Investment Banking & Securities Dealing industry is expected to increase 17.6% in 2022 . While global M&A is down – relative to the record setting surge – the overall outlook is robust with plenty of capital to be put to work and opportunities abound for smart entrepreneurs.

Private Equity & Investment Banking

With greater access to higher quality data, buyers are increasingly more sophisticated and possibly, more demanding than ever when it comes time to mergers and acquisitions.

Where does that put you as an investor or entrepreneur?

For entrepreneurs ready to optimize the value of their life’s work, Strategic Exit Advisors (SEA) provides investment banking services for companies with EBITDA ranging from $1 million to $10 million.

When Strategic Exit Advisors works with Private Equity, we work on the sell-side , on behalf of our clients, to drive interest with investors and maximize their exit. And while every entrepreneur’s journey is unique to their industry and circumstances, opportunities await business owners and founders ready to achieve their ultimate exit.

Private Equity firms seeking investment opportunities view SEA as a pipeline to opportunity, as entrepreneurs ready to exit their businesses work with SEA to bring their businesses to market.

If and when a company wants to work through an M&A deal, investment banks often encounter private equity groups looking to expand their portfolios. SEA represents our clients on the sell side, guiding them through every aspect of the deal.

Before The Deal

SEA’s Readiness Roadmap is focused on identifying and improving value gaps that restrict maximum value. At SEA, our team develops an actionable plan to help owners prioritize areas of weakness and recapture lost value, with the top 5 value areas being:

Scalability
Sales & Marketing
Customer Diversity
Corporate Culture
Management Team

Our proven, streamlined process maximizes time and money by identifying and mitigating risks on a case by case basis before a company moves forward – carefully and confidentially working to improve the posture of businesses before bringing it to market. This provides general partners the opportunity to improve management, operational efficiencies, or otherwise close the valuation gaps to increase profitability and yield higher deal multiples.

M&A is a Team Sport

In addition to increased synergies through expert industry knowledge and networks, when it comes time to put a deal together, investment bankers have superlative accounting capabilities, communication skills, and the capacity to work diligently to ensure deal success and cross the finish line together. Collaboration in every aspect of the deal produces exceptional outcomes during M&A.

SEA is motivated to work diligently on the sell side of our clients, while collaborating with private equity on the buyside to build the best deal possible.

At Strategic Exit Advisors, we look forward to continuing to be your trusted partner. Call us anytime (215) 489-8881 or schedule a conversation here .

When is the Right Time to Sell My Business?

Wed, 24 Aug 2022 14:12:35 GMT

An Entrepreneur’s Journey

As an entrepreneur, taking an idea and turning it into a successful business takes an enormous amount of effort and courage . It isn’t easy to overcome the growing pains of scaling , while staying profitable and retaining talent.

If you are a seasoned, serial entrepreneur, taking on this challenge repeatedly and succeeding requires not only strong business acumen, but the ability to learn quickly. More importantly, having access to a strong advisory team to collaborate with not only provides a deep bench of experts, it helps to unlock valuable insights when engaging with prospective buyers, investors, and clients.

“When Should I Sell My Business?”

When an entrepreneur has realized their vision and produced a consistent and increasing revenue stream, the idea of parting ways with their business can be an overwhelmingly emotional process . Yet increasingly, savvy business owners and founders realize the value of knowing how and when to maximize their efforts through a sale.

It’s essential to understand that your advisory team is there to help you seize the right opportunity. When purchasing power and market demand are in alignment, it could be the right time to sell. Ensuring that your books and finances are in order and accurate will put you at an advantage to receive a realistic valuation.

As a business owner, if you’ve decided it is the right time to sell your business, it’s also critical to keep a high level of confidentiality and let your advisory team handle the heavy lifting to maximize the value of the deal.

Sell-Side M&A: Investment Banking for Entrepreneurs

Sell-side M&A provides business owners with the opportunity to optimize the financial and emotional value of building a successful business and maximize ROI through the sale of their business.

At Strategic Exit Advisors (SEA), our collaborative process allows us to work closely with entrepreneurs, and focus on identifying strategic buyers willing to pay higher multiples.

The process of selling a business takes time, but it also requires the ability to properly pace the process to avoid deal fatigue as the race is both a sprint and marathon. If someone suggests it’s an easy process, or a fast one, it’s likely that they’re not being honest with you.

Ensuring that culture and values are a good fit is also essential. If the culture of the buyer and the seller are misaligned, the post-integration merger could fall apart. Overall, clear and consistent communication throughout this collaborative process provides the framework for successful, client-defined outcomes.

Outsourced M&A: Succession, Unexpected Offers, & pre-M&A Readiness Roadmap

Outsourced M&A supports businesses with a dedicated advisory team to help entrepreneurs make their companies more profitable, easier to manage, and increase the company’s value when it comes time to:

Transition your business to family or management through succession
Respond to an unexpected offer(s)
Prepare your business for sale

Regardless of the specific situation your company is in, you have options and opportunities whether your intention is to pass your business to family members or existing management, respond to unexpected offers, or calibrate your business to optimize a sale.

Succession

During succession, the process often goes beyond ‘the numbers’ and can be a complex and emotional process when dealing with family or management.

Collaborating with an advisory team works to address concerns from you, stakeholders, and key players to ensure your personal and financial goals are met while keeping stakeholders satisfied.

Unexpected Offers

What if you’ve received an unexpected offer? As an entrepreneur, it might be the first time you’ve received an offer, but if your organization is valuable, it certainly won’t be your last. Competitors, strategic partners, and financial buyers like to take advantage of great opportunities: quality companies don’t go unnoticed for long. SEA helps entrepreneurs understand the true value of their business and properly vet and negotiate with the buyers’ M&A team.

Pre-M&A Readiness Roadmap

For entrepreneurs who aren’t quite ready to sell, SEA’s Readiness Roadmap can guide and prepare business owners and founders through a comprehensive process focused on changes to improve the value of their business that yield the highest ROI.

Bringing on an advisory team to represent your business early on in the process will provide you with a competitive advantage, comprehensive understanding of the markets and the ability to provide strategic thought leadership. Owners and founders are able to achieve their best exit when working with investment banking services, as they are able to:

Create markets for your business
Unlock unrealized value
Source strategic buyers willing to pay higher multiples
Cross the finish line together as a team

The Emotional Journey of Selling a Business

Successful businesses are built by people who care at every step of the entrepreneurial journey and chances are if your company is successful, you have created a strong culture with values that have not only driven your financial success, but also managed to attract, retain and engage with top talent. The emotional aspect of selling your business can be significant and the reasons that owners and founders decide to sell their business can include,

You’ve outgrown your business
You don’t want to reinvest your own capital
Retirement, Relocation, or Readiness to move onto next endeavor
Derisk your position

For entrepreneurs looking to fully liquidate their position and transition ownership, a deal aligned with their priorities presents a strong opportunity to honor the work involved in starting a business and successfully growing it.

Just because an investor or buyer reaches out doesn’t mean you will close a deal. You’ve worked hard to build up your company and when someone with deep pockets is prepared to make you an offer, that kind of recognition can be flattering. It’s essential to understand your options, work closely with an advisory team, and make a decision that aligns with your personal objectives and your financial goals.

Although the best time to sell a business is when it’s doing well, every business has unique value propositions. At Strategic Exit Advisors (SEA), our advisory team is ready to help you with your entrepreneurial journey. Call us anytime (215) 489-8881 or schedule a conversation here .

Culture, Values, and Competitive Advantages for Entrepreneurs in M&A

Thu, 04 Aug 2022 10:55:57 GMT

Status Update: How Strong Are Culture & Values in your Organization?

Building a successful business means building a successful company culture. When driven by a strong sense of purpose and supported by strong values, entrepreneurs can capitalize on the sum total of their efforts when looking to make an exit.

However, a significant growth obstacle for some organizations can be in their ability to successfully attract, engage and retain talent . But, is this a failure of company culture?

For entrepreneurs seeking an acquisition, a deal aligned with culture and values can create an opportunity to upgrade talent across an organization, providing instant access to an ‘off-market’ talent pool to close the talent gap , as in an increasingly competitive job market, M&A has become a strategic advantage for growth.

M&A is Set to Continue

It’s well known that global M&A activity set records in 2021, surpassing pre-pandemic activity and climbing towards peak levels reached in 2015 and 2007 .

While the disruptions caused by the pandemic may have primed the market for increased activity and consolidation, founders and business owners who have been able to build businesses around strong values and culture continue to be rewarded for their efforts.

While cycles of boom and bust remain, the momentum of the pendulum – in either market cycle – can be capitalized on by savvy entrepreneurs ready to turn their hard work into a desirable valuation and sale.

Building A Culture of Continuous Improvement and Growth

As businesses increasingly focus on the digital transformation of their operational environments, the scale at which infrastructure upgrades have increased will continue to be an important factor and competitive advantage when bringing your business to market. Put simply, having the ability to present a roadmap for a successful data integration may be a previously unrecognized driver of success for integration post-merger.

Lead with Emotional Intelligence

The emotional aspects of a deal can be overwhelming and the importance of clearly defined priorities, a defined communication strategy, and plan to carry the deal over the goal line cannot be underestimated.

Over-communicating or remaining silent until a deal closes can be a costly misstep . It’s essential to share the right information, at the right time with a trusted advisory team to maintain deal momentum with expertise and emotional intelligence. Moreover, understanding the cultural differences between organizations can be the secret sauce to the enduring success of the deal.

Internal and external forces, as well as hard and soft synergies play a crucial role in shaping beliefs and values that inform the culture of an organization. Important questions to consider include,

How can a post-merger environment best honor the legacy of your efforts as an entrepreneur when it comes to a marriage of cultures?
Will the transition and implementation period work with existing cultures to prevent an exodus should priorities shift?
What considerations can minimize disruptions while maximizing and fostering employee engagement post-merger?

When it comes to doing the heavy lifting and staying engaged, SEA helps owners throughout the M&A process ask the right questions and uncover the right answers to make informed decisions and help entrepreneurs achieve their ultimate exit.

We are ready to help you on your entrepreneurial journey. Call us anytime (215) 489-8881 or schedule a conversation here .

How Will Fed Rate Hikes Affect The State of M&A?

Thu, 21 Jul 2022 03:20:19 GMT

Calm Waters Never Made a Good Sailor

At Strategic Exit Advisors, we have weathered many storms. And while fluctuations and cycles in the market have made some investors skittish, true entrepreneurs have always been able to capitalize in both fair and foul weather.

We specialize in helping entrepreneurs achieve their best exit because we have one goal – to help entrepreneurs sell their businesses. And, well into our 16th year, our success has no signs of slowing down.

As we turn the corner on Q2, many entrepreneurs are wondering what to expect for the remainder of the year.

M&A Through Q2

As continuing Covid-era supply chain and labor issues linger – and amidst the ongoing war between Russia and Ukraine – the pressure on markets has been felt across the board. In recent weeks, fossil fuel prices are climbing as inflation in the US has reached a 41-year high.

The Consumer Price Index is up 9.1% since June of last year, with the biggest pain points being food and energy costs. Groceries are up 12% on the year. Energy prices are up 41.6% annually .

Even as the Fed looks to turn up the dial on interest rates and cool inflation, the doom and gloom amplified in news cycles can paint an unrealistic picture for investors and entrepreneurs ready to exit their business or start a new chapter in their lives or career.

This market cycle is like other storms in the past – all of which have come and gone. The way to navigate this uncertainty is with expertise, while ignoring many of the talking heads who are theatrically reaching for the panic button.

Deal Making Will Endure

The emphasis of Q1 2022 was not what buyers were willing to pay for a deal, but rather, which deals actually closed. With interest rates on the rise and an uncertain market, deals in private equity will push through bearish times, but it’s likely they’ll continue with greater scrutiny.

Yet, there’s more dry powder than ever as Private Equity and Venture Capitalists sit on cash reserves. While overall Q2 2022 year-over-year quarterly VC deal count was down, it still exceeded pre-2021 quarterly totals .

The fact remains: if a business is profitable and expected to remain profitable, focusing on value will be key. As for the time being, business buyers outnumber sellers as consolidation continues across industries. This is to say, a record amount of usable capital remains in the market and is ready to be put to use, and multiples have remained steady.

Where multiples in some high-demand industries have grown, quality has become ever important as buyers become more discerning.

Even with interest rate hikes, labor shortages, mounting inflationary pressures and supply chain disruptions, eager sellers are finding eager buyers to put capital to work. This signals that valuation, leverage, and deal terms are more important than ever. As a result, M&A activity may continue steadily into late 2022 and early 2023.

Capital That Needs To Be Put To Work

Business owners looking to sell in the current market should look at optimizing their internal processes, governance, and financial performance before heading to the market. And even if a deal comes knocking at your door, an interested buyer does not necessarily guarantee the right buyer.

Understanding the market and what motivates a strategic buyer vs. a financial buyer will be essential in maximizing the value of the deal.

Regardless of the economic environment, timing and preparedness is critical when it comes to successfully exiting your business. When a firm is enjoying quarter after quarter and year after year of sustaining growth, it may be the optimal time to exit, as a crucial driver of value is growth – in revenue, cash flows, and profitability.

Identify Strategic Buyers for Your Business

As the cost of debt increases due to interest rate hikes from the Fed, it’s critical for business owners to align their organization with value drivers in their industry.

It’s also essential to understand how inflation, rising interest rates and a possible recession could affect your company: be ready to educate potential buyers as to how your business is sheltered from this risk or adequately hedged against it.

Despite possible headwinds, opportunities for entrepreneurs with strong values and clearly defined priorities remain; they will continue to be rewarded in today’s M&A environment when supported by the right team of professionals, who are capable of identifying strategic buyers willing to pay higher multiples.

At Strategic Exit Advisors, we look forward to continuing to be your trusted partner. Call us anytime (215) 489-8881 or schedule a conversation here .

ABOUT STRATEGIC EXIT ADVISORS

Strategic Exit Advisor is an investment bank for entrepreneurs. We help owners achieve their ultimate exit by focusing our process on buyers willing to pay higher, strategic multiples. We understand what you’ve been through building your business and make certain you get paid for it. At Strategic Exit Advisors, we focus on the transition, as well as the transaction.

Shivani Patel Join Strategic Exit Advisor

Mon, 09 May 2022 06:18:50 GMT

Strategic Exit Advisors is pleased to announce that Shivani Patel, through Drexel University’s co-op program , has joined the firm as an Investment Banking Analyst.

Shivani’s previous experience working for a Fortune 100 Company makes her an asset to the Strategic Exit Advisors Team. Because she understands how a successful company functions, Shivani will also make an immediate impact on the entrepreneur company for which Strategic Exit Advisors serves.

Curt Cyliax, Managing Director of Strategic Exit Advisors, says, “As a small, client-focused investment banking firm, Shivani will have the opportunity to get hands-on and real-world experience. We welcome her and know she will be a great help.”

Shivani is an Honors student at Drexel University’s LeBow College of Business studying Finance, Economics, and Philosophy.

Along with her studies, Shivani serves as a delegate on the Dean’s Student Advisory Board where she is currently developing an interactive workshop series to educate college students about the importance of financial literacy. Prior to her role as an Investment Banking Analyst at Strategic Exit Advisors, Shivani worked at Comcast with a team of project managers who deployed sales tools. She learned how to manage the end-to-end processes of complex projects using project management tools such as Gantt charts, RAID logs, and Work Breakdown Structures. A native of Fairless Hills, PA, Shivani enjoys painting, hiking, reading, and spending time with her family.

ABOUT STRATEGIC EXIT ADVISORS

Strategic Exit Advisors Proudly Supports the EBOD Foundation

Tue, 26 Apr 2022 08:55:06 GMT

Strategic Exit Advisors established its “Pay it Forward” program in 2020 as the pandemic was wreaking havoc on non-profit organizations. Because essential contributions were in decline, Strategic Exit Advisors decided to launch the “Pay it Forward” program supporting causes important to the firm and its clients. Since its inception, Strategic Exit Advisors has donated tens of thousands of dollars to organizations focused on youth financial literacy, entrepreneurship, education, and other local and international organizations aligned with the firm’s core values. Most recently, Strategic Exit Advisors donated $500 to EBOD Foundation in Chesterbrook, PA.

Founded in 2001, EBOD is focused on supporting research for a cure for Dementia/Alzheimer’s as well as helping Philadelphia-area veterans and young people have the opportunity to fulfill their potential, regardless of their circumstances.

Rob Waring, Managing Director of Strategic Exit Advisors, says, “It is an honor to support EBOD Foundation in their mission to find a cure for dementia and Alzheimer’s. There are so many that have been impacted by challenges associated with these disorders and know the resulting pain for both the patients and their loved ones. On behalf of the Strategic Exit Advisors’ team, we are thrilled to Pay it Forward to Joe Clark and EBOD Foundation.”

Joe Clark commented, “Every dollar counts when you are trying to help those battling dementia and Alzheimer’s. One of our most exciting partnerships is with The McKeown House for Respite Care, which will allow caregivers to drop off their loved ones at a warm homelike environment to take a break from the brutal stress of caregiving. We are very grateful to our friends, Rob, Tony, and the team at Strategic Exit Advisors for their support.”

ABOUT STRATEGIC EXIT ADVISORS

Strategic Exit Advisors Continues to Pay it Forward at St. Michael's School

Tue, 05 Apr 2022 14:05:22 GMT

Founded in 1890, St. Michael’s School and Nursery is Delaware’s oldest early childhood program and one of the oldest in the nation. The mission of St. Michael’s is committed to the growth and support of children’s development in mind, body, character, and spirit. The school provides an exemplary program of affordable early education and childcare in a nurturing atmosphere.

Tony Parisi, Managing Director of Strategic Exit Advisors, says, “Fortunately, Bill Dugdale, my good friend, an Advisor with AB Bernstein and a St. Michael’s Advisory Board Member, introduced me to the school’s Executive Director, Lucinda Ross. Lucinda shared St. Michael’s history and mission with me. Her words, and the work they are doing, certainly impressed and moved me. So, on behalf of the Strategic Exit Advisors’ team, we are thrilled to Pay it Forward to St. Michael’s.”

Ross adds, “Studies show that education is the second most important social determinant of health after economic stability. Since economic stability isn’t easily fixed for children, the next best determinant of long-term health and future success is early childhood education. Our goal is to give our treasured students a great start in life.”

ABOUT STRATEGIC EXIT ADVISORS

Strategic Buyers Will Pay More for Your Business

Tue, 29 Mar 2022 13:37:08 GMT

The team at Strategic Exit Advisors has one goal – helping entrepreneurs sell their businesses. However, we do not advise they sell to just any interested buyer. We focus on finding strategic buyers who understand the value proposition of our client’s company. Because when strategic buyers see the value in the seller’s business, they will pay higher prices.

A key part of our process is creating a market of interested, strategic buyers who will compete to:

Pay a high price multiple;
Agree to terms that fit the entrepreneur’s transaction goals; and
Provide a great future and opportunities for employees aligned with our client’s culture and legacy.

Entrepreneurs want to know that we will find the “right” buyers in the sale process. And sometimes, our clients are surprised to hear that direct competitors can make the worst buyers. Why? Because they are typically buying only market share and seldom want to pay for what makes our client’s business different or unique. Also, the seller may or should be concerned when sharing confidential information with direct competitors.

So, how do we find buyers who recognize our clients’ strategic value?

At SEA, we use our proprietary and custom-built process to identify strategic buyers for each client. The process starts with mapping companies that are similar to our clients in one or more of three dimensions:

Products/Services
Clients/Markets
Technology/Systems

As shown in the Venn diagram below:

^{Next, we use another Venn diagram to describe which aspects of our client’s business are most interesting and valuable to other companies. These diagrams match our client’s value proposition with prospective strategic buyers. By identifying prospects in the overlapping circles, we identify the highest valued opportunities for our clients.}

^{Then, our team does a lot of thoughtful and old-fashioned digging through our comprehensive contact lists of corporate and financial buyers and our databases of deals and buyers. The result is a targeted yet expansive universe of prospective, strategic buyers. This is an iterative process in which we work closely with our clients.}

^{In our next article, we will share an example of how we use our process to find strategic buyers. Until then, please call us if you have any questions or want more information about how we can help you sell your business.}

Strategic Exit Advisors Pays it Forward to Young Entrepreneurs

Thu, 03 Mar 2022 09:01:17 GMT

Through its “ Pay it Forward ” initiative, Strategic Exit Advisors (SEA) recently donated $500 in prize money to the EO-Philadelphia Global Student Entrepreneur Awards (GSEA). GSEA is the premier global competition for students who own and operate a business. Nominees compete against their peers from around the world in a series of local and national competitions in hopes to qualify for the GSEA Global Finals.

Bob Cahill, SEA Managing Director and GSEA Judge, says, “It was such an honor being involved in this year’s GSEA. The energy, ambition, creativity, and maturity of the young entrepreneurs in the competition were beyond impressive. Although they are still students, every presenter exhibited that entrepreneurial spirit that we see in our most successful clients. Lastly, on behalf of my colleagues at SEA, we appreciate our partnership with EO-Philadelphia and thank them for including us.”

ABOUT EO

Since its inception in 1987, members of Entrepreneurs’ Organization (EO) have been building a global network to serve the unique needs of the complete entrepreneur. This innovative process has sustained a growing organization that has withstood—even flourished—during times of economic uncertainty, and now with a global footprint in more than 61 countries.

ABOUT STRATEGIC EXIT ADVISORS

Strategic Exit Advisor is an investment bank for entrepreneurs. We help owners achieve their ultimate exit by focusing our process on buyers willing to pay higher, strategic multiples. We understand what you’ve been through building your business and make certain you get paid for it. At SEA, we focus on the transition, as well as the transaction. To learn more, Let’s Talk .

Creating Value for Your Business Post COVID-19

Thu, 17 Feb 2022 10:59:51 GMT

As we move into March of 2022, the two-year anniversary of COVID-19, concerns that we are hearing a lot from business owners is whether the pandemic will ever be over and how to maximize value today. While the pandemic hasn’t officially moved into the endemic phase, businesses now have processes in place to handle COVID interruptions, which means it’s time to focus on planning and strategy post-COVID-19.

At the center of the discussion is where work will happen – remote or in-person. The race to find top talent has grown more elusive than ever, with an estimated 47 million people quitting their jobs in 2021 as a part of the now named “Great Resignation.” Employees prefer to work from home or embrace a hybrid work/remote model. Major companies have thrown dates on the calendar of employee returns to the office with seemingly less accuracy on each turn.

As business owners look ahead to 2022, let’s focus on what we’ve seen from some of the most successful companies. These are companies that have been able to retain and attract talent, grow their business, and scale. It’s also important to note that not all jobs can be done from home. A study by a Stanford economics professor estimated that 50% of jobs will always have to be in-person, i.e., the “essential services” jobs. Our discussion focuses on the other 50% of employment – companies that were remote during the initial stages of the pandemic and can easily transition between the office and home.

1. Focus on the Business – we see and hear about many businesses that spend significant time on where employees are working and not what they are doing. Much of the discussion comes back to trust. Companies that have been able to thrive during these times have strong trust in their employees and focus on the following questions to guide them:

i. Is the work being done well?

ii. Can/are employees going above and beyond expectations?

iii. Is there camaraderie on the team?

iv. Is there cross-pollination between people and groups?

v. Can employees grow and take on additional responsibilities.

2. Adaptability – We had an owner/operator tell us half of his office had the Omicron variant in early January. No one was overly sick, but they still could not come to the office. Situations like this require adaptability. Businesses must be prepared to work remotely at a moment’s notice and not lose a step. Systems, processes, and technology must be in place to make working from home a quick pivot. Work and productivity can’t stop because the office is shut down.

3. Employee Engagement – Engage the employees on what they need while working from home and where they see the future of their work. The office helps build camaraderie naturally, but remote work models need to prioritize it. Make sure their growth and development aren’t suffering. If you’re out of the office, allow time and space for mentorship and professional growth opportunities. Some ideas for increasing engagement are to involve your team in different ways, such as rotating the planning of events between team members or adding a short icebreaker to meetings. It’s also important to share your appreciation with your workers. A recent poll conducted by Robert Walters, a recruitment professional, found that 87% of remote workers feel added pressure to be extra productive and prove their case for work from home. Remind employees to take breaks during the day and maintain healthy habits. Sometimes it’s essential to state the obvious – encourage employees to take time for lunch and breaks throughout the day.

Whatever your company decides regarding an in-person, remote, or hybrid work model, a focus on the business, adaptability, and employee engagement are crucial to helping your company grow and thrive post-pandemic. The companies that excel now are the ones who will be market leaders in the future.

As an investment bank for entrepreneurs, Strategic Exit Advisors helps owners achieve their ultimate exit by focusing our process on strategic buyers willing to pay higher, strategic multiples. The first step to your ultimate exit is just a phone call away!

In the meantime, reach out to us for our complimentary SEA Readiness Assessment™. This tool will help prepare your company for a successful sale today, tomorrow, or in 10 years.

Strategic Exit Advisors Makes Donation to Continue Support of the Drexel University’s Close School of Entrepreneurship

Tue, 01 Feb 2022 09:35:49 GMT

Strategic Exit Advisors (SEA) recently donated $500 to continue its support of the Drexel University’s Close School of Entrepreneurship’s growing program through our “Pay-It-Forward” initiative.

Curt Cyliax, SEA Managing Director, says, “We started our Pay-it-Forward program to provide financial support for community organizations focused on youth financial literacy, entrepreneurship, and other organizations aligned with the SEA core values. Clearly, Drexel University’s Close School of Entrepreneurship is a worthy recipient. Over the years, we have hired smart and ambitious students from Drexel. And as an alum of Drexel, it warms my heart to give back when we can. On behalf of SEA, I know our relationship with them will last for years to come and appreciate all that they do.”

“Thank you for your continued support of the Close School. Together, I know that we will continue to move the needle in entrepreneurship education. The Princeton Review, for the first time, has developed a regional rankings system, and Drexel’s undergraduate entrepreneurship program at the Charles D. Close School was ranked 4th regionally for 2022, with our graduate programs ranked 8th regionally as well,” said Donna DeCarolis, Ph.D., Dean, Charles D. Close School of Entrepreneurship.

ABOUT STRATEGIC EXIT ADVISORS

Strategic Exit Advisor is an investment bank for entrepreneurs. We help owners achieve their ultimate exit by focusing our process on buyers willing to pay higher, strategic multiples. We understand what you’ve been through building your business and make certain you get paid for it. At SEA, we focus on the transition, as well as the transaction

Strategic Exit Advisors Continues Growth with Addition of an Associate

Tue, 18 Jan 2022 14:11:45 GMT

Strategic Exit Advisors is pleased to announce that Peter Hissey has joined the firm as an Associate.

Hissey says, “I am excited to be joining the impressive team at SEA. From my time here as a summer intern in 2018, I learned the value that SEA brings to their clients as well as to the community. I share their mission of helping entrepreneurs get the best deal for their lifetime of work. I also thrive in entrepreneurial environments and was really blown away by SEA’s Pay it Forward program that helps charitable organizations. I’m excited to start contributing to the firm’s success, serving both entrepreneurs and the community.”

Adds SEA Managing Director, Curt Cyliax, “Peter comes to us after a few years on Wall Street. Before that, he was a professional baseball player. In both roles, he was a part of successful teams and knows how to get a group moving in the right direction always focused on the goal. His work ethic, positivity, and unique experience allow him to connect with our clients while accomplishing excellent results. We welcome Peter to the SEA team.”

ABOUT PETER HISSEY

Hissey, a former SEA Summer Intern, has been working in the Investment Banking industry for the last 2 and a half years. Prior to joining SEA, he worked in the Investment Banking Public Finance Group for Bank of America Merrill Lynch. At Merrill Lynch, he helped price, structure, and execute municipal bond transactions as a part of the #1 ranked underwriter on Wall Street. Hissey worked on multiple senior-managed transactions with an aggregate value of approximately $7 billion for clients in the Atlantic Region and Puerto Rico. These clients included the City of Philadelphia, Philadelphia School District, State of Maryland, Commonwealth of Massachusetts, and the Delaware Valley Regional Finance Authority.

In 2008, Hissey was selected in the 4th round of the MLB First-Year Player’s Draft by the Boston Red Sox out of high school and played seven years in their organization, making it up to the AAA level. After his playing career ended, he attended the Wharton School of the University of Pennsylvania where he graduated with Suma Cum Laude as well as Beta Gamma Sigma Honors with a concentration in Finance.

Hissey resides in South Philadelphia with his wife and two young children. He is active in his local church and serves on the Board of an anti-human trafficking foundation in Ecuador called Casa Dunamis International.

ABOUT STRATEGIC EXIT ADVISORS

Strategic Exit Advisor is an investment bank for entrepreneurs. We help owners achieve their ultimate exit by focusing our process on buyers willing to pay higher, strategic multiples. We understand what you’ve been through building your business and make certain you get paid for it. At SEA, we focus on the transition, as well as the transaction.

Strategic Exit Advisors is pleased to announce that Peter Hissey has joined the firm as an Associate.

2022 M&A Economic Outlook

Wed, 12 Jan 2022 07:28:33 GMT

While not a prognostication, let’s reflect on what we have witnessed firsthand in the M&A markets from the entrepreneurial business owners we work with on a daily basis regarding 2021 performance. And let’s look ahead to see what 2022 might bring us.

The year 2021 will likely be remembered for headlines of the pandemic and the change in the administration in Washington. The news was filled with topics from the vaccination rollout and the emergent of virus variants, to supply chain difficulties, ending the year with inflation concerns. The concerns about inflation are: is it a short-term blip, is it due to supply & demand issues or is it greed by corporate suits? Will inflation ease in 2022, or are we returning to the 1970s?

With all the negative headlines, M&A activity in 2021 bounced back stronger than expected following a tumultuous 2020. Both the number of deals completed and the aggregate value of those deals were at their highest levels in the last decade.

With the incoming administration’s plan to enact higher tax rates, entrepreneurs who expected to sell in the future expedited their plans before tax increases substantially reduced after-tax proceeds from a business sale. By late spring owners were flocking to the private capital markets in an effort to complete a sale by the end of the year. Concerns that the rush to close by the end of the year would negatively affect valuations in the 4th quarter (mimicking the tax increase with the Affordable Care Act) were not substantiated. In November, when the House passed the Build Back Better Act, those concerns were significantly reduced as the House agreed to more modest increases.

Fundraising for Private Equity remained strong in 2021 with mega-funds dominating the market. The use of Special Purpose Acquisition Companies (SPAC) by Private Equity remained strong in 2021. However, it is expected to hit some turbulence as the administration looks to tighten SPAC regulations.

As the 2021 pandemic recovery navigated the virus variants, shutdowns, and labor shortages, entrepreneurs adjusted operations to compete in the ‘new normal’. According to a survey by JP Morgan|Chase, entrepreneurs “found innovative ways to run their companies and flex their entrepreneurial muscles. As a result, many of these companies are stronger today than they were before the pandemic”. ¹

Earnings multiples continued their strength in 2021. The private capital market continued to be a Seller’s market. Competition for quality businesses, the availability of liquidity, the cost of money, and the continuing economic rebound supported strong multiples.

The market strength we foresaw last year panned out for sellers with well-run companies. As 2022 begins, we expect to see continued improvement in economic conditions tempered by rising interest rates, a tight labor market, and inflation concerns.

We also expect the number of deals and multiples will continue to be strong through 2022 and into the foreseeable future. Well-run companies will have plenty of competition for buyers in 2022 due to the expectation of strong multiples.

If you’re prepared to take chips off the table, you should get started in 2022 before this favorable environment changes. If you’re not sure how prepared your company is for the private capital market, Strategic Exit Advisors offers a complimentary Readiness Assessment. It takes less than an hour to complete and will illustrate where to improve your company’s attractiveness to the market. Call or email us today at info@se-adv.com to schedule a video call.

Strategic Exit Advisors continues our growth as we enter our 16th year. Our historical selling successes with a high rate of closing on favorable terms are expected to continue in 2022. This is indeed good news for our entrepreneurial business owners. With this momentum, we anticipate another prosperous year for our current and prospective clients.

We believe 2022 will be a better year than last year. At the very least, it certainly should be another exciting year!

We look forward to Strategic Exit Advisors continuing to be your trusted partner. We’re available for a call anytime (215) 489-8881.

¹ 2022 Business Leaders Outlook, 12 ^th annual survey

Strategic Exit Advisors Makes $35,000 Donation to Mirror of Hope Enabling Impoverished Students to Attend High School Tuition-Free

Wed, 22 Dec 2021 09:39:07 GMT

Strategic Exit Advisors (SEA) recently represented Precision Solutions in its sale to Applied Technical Services, which activated SEA’s Pay It Forward Program. In concert with owner Dan Kendra, SEA donated $35,000 to Precision Solutions’ charity of choice – Mirror of Hope Foundation, of which Dan’s wife, Adele Kendra, is a founding Board Member.

Mirror of Hope Foundation enables students in Nairobi, Kenya to attend and complete four years of high school on a tuition-free basis (free schooling is only available through 8th Grade). The Mirror of Hope philosophy is “A Hand Up Not a Hand Out”, and Mirror of Hope also specializes in vocational training for women and providing essential food and healthcare supplies.

Dan Kendra remarked “I couldn’t have been more proud to designate the Mirror of Hope Foundation as the recipient of Strategic Exit Advisor’s Pay it Forward Grant as a result of the successful sale of my business. It was truly a pleasure working with Tony and Curt, and I applaud their efforts to give back to those in need through this program.”

A year of high school (with room and board) is funded with a donation of just $750. A donation of $15-25 funds other necessities. Please visit mirrorofhopefoundation.org to learn some Mirror of Hope success stories and to consider a donation.

Adele Kendra reflected “This donation will provide educational access to many grateful and deserving children in Kenya, where opportunity to attend school is lacking. The poverty is heartbreaking, but the spirit, the hope, the appreciation for education and what a difference it can make are just overwhelming!”

Through SEA’s Pay It Forward Program, when a client of the firm closes on the sale of their business, SEA invests in the charity of their client’s choice.

“SEA’s Pay it Forward Program was designed to share our success with our client’s philanthropic endeavors. We support our entrepreneur clients as they positively impact people in need. We are thrilled to support the mission of Mirror of Hope through Pay It Forward,” said Curt Cyliax, SEA Managing Director.

ABOUT STRATEGIC EXIT ADVISORS

Strategic Exit Advisor is an investment bank for entrepreneurs. We help owners achieve their ultimate exit by focusing our process on buyers willing to pay higher, strategic multiples. We understand what you’ve been through building your business and make certain you get paid for it. At SEA, we focus on the transition, as well as the transaction.

Business Sellers - Own the Process with Leverage

Wed, 08 Dec 2021 06:30:05 GMT

A business has an innate transaction value that is derived through market research, comparable analysis, and insight into previous similar transactions. However, there is one key aspect that this approach fails to capture within the valuation process – leverage.

Leverage is a crucial aspect of the sell-side process. It can change the value of a deal by hundreds of thousands or millions of dollars (depending on the size of the business and the nature of the transaction). For example, sellers are often approached with flattering offers from larger companies hoping to establish leverage within a deal, causing an anchoring effect. The anchoring effect is a reference point set by the initial offer in a negotiation.

You are negotiating against a team of professionals that work for the buyer with the buyer’s best interest in mind. You, as the seller, must be prepared to engage with the buyer. If you fail to do so, there are three key places where you could be losing value.

Without stirring up interest or professional marketing for the company, there will be no potential competitors, or bidding wars, to drive a higher sale price.
Because of #1, the potential buyer owns the process. Therefore, the buyer can continue to drive down the closing price through deal terms in the pre-LOI / due diligence stage.
The financials or representations of the company are not optimized and are picked apart by the buyer.

To own the process and maintain leverage, it is important to do your own market research and due diligence. Your financials also need to be in order and presentable. Lastly, and most importantly, engage an investment banking advisor you can trust. The investment banker will navigate you through each step of the process and bring you across the finish line.

When working with the SEA team, the seller gets experienced M&A professionals who can talk to the buyer’s representatives. We will tell you what to expect, what is “normal,” and what is not. We’ll actively check the market while negotiating for the deal structure and price you want and deserve. And we’ll make sure to close the deal with integrity.

Strategic Exit Advisors Helps Sell Precision Solutions, Inc.

Tue, 23 Nov 2021 13:10:14 GMT

November 23, 2021 – Strategic Exit Advisors (SEA) is proud to announce the successful sale of Precision Solutions, Inc., a leading provider of calibration products and services, to Applied Technical Services (“ATS”), a national leader in calibration, engineering, testing and inspection services and a portfolio company of Odyssey Investment Partners.

Precision has an outstanding tradition of establishing trust in performing calibrations and providing products and integrated solutions that facilitate their customers’ most vital operations.

Dan Kendra, Precision’s owner and CEO, stated, “I am thrilled for the future of Precision and our people as part of the ATS family. SEA was a trusted advisor in helping me sell my business, which was founded by my father, Ray, in 1968 and where I have led for over 40 years.”

As a member company of ATS, Precision is operating with all of its employees and is expanding into additional calibration fields. With the acquisition of Precision, ATS continues to realize its vision to become the industry leader in providing expert consulting calibration, engineering, laboratory testing and inspection services.

Curt Cyliax and Tony Parisi, Managing Directors at SEA, led the sale process for Precision. Tony reflected, “We are enormously grateful to have served Dan in his deal. Dan built Precision to be consummately reliable and yet dynamic in its growth, on the shoulders of the business that his father created. We were fortunate to work with a client who had great foresight for his company and employees. ATS was a super partner.”

About Applied Technical Services: Applied Technical Services, LLC (ATS) is an engineering, laboratory testing, inspection and calibration company founded in 1967. Please visit www.atslab.com.

SEA is an investment bank that serves entrepreneur and family-owned businesses. SEA enables its clients to achieve their financial and other personal goals by creating a competitive process with strategic buyers.

DIY Has Its Place, But Not When It Comes to Selling Your Business

Wed, 10 Nov 2021 10:07:26 GMT

DIY, or Do It Yourself, is popular for many things: car repair, patios, home renovations – to name a few examples. However, selling your business should not be one of them. As an owner who decides to sell, the most important concern should be maximizing the operations of the business. In other words, the deal process shouldn’t distract you from running your company. Regardless of the situation, when selling your business, you should always have a trusted advisor to quarterback the transaction. Selling your business is a long and emotional process, so choosing the right investment banker who will do the heavy lifting can make all the difference in the outcome.

To give further insight on this, we were fortunate enough to interview an executive who tried to run his own deal after receiving an unsolicited offer from a local competitor. This offer from the local competitor caused the executive to seriously consider selling the business. For this reason, he reached out to his own network and started receiving calls with interest from other companies. After three months of running the process, he received six LOI’s. Eventually, he whittled the offers down to one potential buyer leading the executive to pursue serious discussions. This buyer said all the right things until they were negotiating the purchase agreement. The lack of clarity in the previous discussions and the LOI regarding employment agreements led to a stalemate that, in the end, killed the deal.

Back to square one! With a hundred thousand dollars spent in legal fees and the enormous amount of time spent (away from the business) negotiating and cobbling together due diligence materials, the executive was exasperated. He realized that the process left him consistently stressed, both at work and at home. Trying to manage the buyers while still managing the business was a near-impossible task, stressful, and turned out to be a waste of time.

This time, instead of running the deal process under a DIY model, the executive engaged an investment banker. The banker informed the executive of the fee structure and, much to his surprise, there was a minimal cost for the upfront work. The investment banker took care of many of the pain points the executive experienced, such as the lack of transparency, managing due diligence, and vetting offers.

After his DIY experience, the executive gave two recommendations based upon what was learned through the process. First, before starting the deal process, make a priorities list of needs and wants as part of the transaction. For example, a need could be having an employment agreement allowing the executive to leave the acquiring company two years after the transaction. An example of a want is a corner office with a nice view in the company’s building. Second, hire an investment banker since the fees are worth the value the banker adds when the deal closes. When choosing an investment banker, the executive recommended picking the person instead of the firm. Because you will be spending a lot of time with the investment banker during the deal process, choosing the right person will make all the difference.

Running a deal is emotional, complex and should be done with an experienced investment banker. When hiring a banker, start with your network to find one. If one is not available, take serious time and consideration choosing the right firm. At the end of the day, nobody will know your business better than you. When it comes to selling your company, nobody will know transactions better than your investment banker.

The moral of the story is that DIY is not an ideal way to sell your business. When you exit, you need someone who understands your goals, your years of hard work, and the difficulties of selling a business. As an investment bank for entrepreneurs, Strategic Exit Advisors understands that you still need to run your business and do not have time to waste. Plus, we help owners achieve their ultimate exit by focusing our process on strategic buyers willing to pay higher, strategic multiples. The first step to your ultimate exit is just a phone call away! Give Strategic Exit Advisors a call today – there is no need to Do It Yourself.

Curt Cyliax of Strategic Exit Advisors Interviews in the Deal Makers Series

Wed, 03 Nov 2021 10:52:12 GMT

Curt Cyliax, Managing Director of Strategic Exit Advisors (SEA), was recently interviewed in Conscient Strategies’ Deal Makers Series. In the interview, Curt discusses SEA’s philosophy in helping sellers achieve their ultimate exit. Specifically, he stresses the emotional journey that every owner goes through during the transaction.

He says, “When an owner has been dedicated to a business for 30 to 40 years, and suddenly, they are out of a job and feel a lack of relevance—that emotional process is one we continue to learn about. In our world, money is important, but understanding the emotions an owner goes through as they make decisions, journey through the process, and ultimately turn over the keys to their business can be a real roller coaster.” Likewise, he stresses that most business owners want to know that their employees will be taken care of after the deal closes. And, Curt adds, “Establishing trust, keeping it, and staying honest are the most important pillars of due diligence.” To access the entire interview, please click here .

Leaders, experts, and innovators in the Merger & Acquisition and the Private Equity space are interviewed about how they get successful deals done in the Conscient Strategies Deal Makers Series. The series highlights perspectives of investors, corporate development executives, and buy and sell-side advisors working across industries and geographies.

About Strategic Exit Advisors: Strategic Exit Advisor is an investment bank for entrepreneurs. We help owners achieve their ultimate exit by focusing our process on strategic buyers willing to pay higher, strategic multiples. We understand what you’ve been through building your business and make certain you get paid for it. At SEA, we focus on the transition, not the transaction.

Strategic Exit Advisors Once Again Among the Philadelphia100®

Fri, 22 Oct 2021 09:24:50 GMT

Strategic Exit Advisors (SEA) is proud to announce that we have been named among the top fastest-growing Philadelphia100® companies for the second year in a row. This year, SEA was named #9, climbing the list from #28 in 2020.The Philadelphia 100® is run by the Entrepreneurs’ Forum of Greater Philadelphia and honors the 100 fastest-growing, privately held entrepreneurial companies in the Greater Philadelphia Region.

Winners were announced on September 30th at the Philadelphia100® CEO Breakfast, which took place at Lincoln Financial Field, and the top 100 rankings were unveiled on October 21st at the Live! Casino & Hotel Philadelphia.

Curt Cyliax, Managing Director of SEA, says, “It is an honor to be once again among so many impressive companies. This year’s list includes such a diverse group of businesses across a wide range of industries. Each awardee should be proud of this accomplishment, especially in light of what we all dealt with in 2020. On behalf of the entire SEA team, I congratulate them and wish continued success to all. Lastly, we thank the Entrepreneurs’ Forum of Greater Philadelphia for again including us.”

About Philadelphia100®: What started as an idea to bring recognition to the region has emerged as a new standard – a standard of excellence. The Philadelphia100® is a merit-based program. Only companies that are among the fastest-growing, privately held companies are awarded the Philadelphia100® designation. The integrity of the process and the resulting list make the Philadelphia100® one of the most sought awards in the region.

Proposed Tax Increases Cause Business Owners to Reconsider How to Exit

Thu, 07 Oct 2021 10:23:55 GMT

“If I’m a business owner, I’m walking away from this week with. . . thoughts. . . if I don’t plan on continuing to hold the business for the long-term, I better expedite my exit strategy when capital gains, the Net Investment Income tax, and tax surcharge become law.”

The House Ways and Means Committee has recently issued its income tax proposals that will help fund the Biden Administration’s new government investments. These potential changes to the corporate income and capital gains, and other income-based taxes, could have significant implications on small businesses and their owners. If implemented, many of these provisions will go into effect retroactive to September 13, 2021, and others are effective January 1, 2022. Therefore, business owners that have been looking to sell their businesses should plan now before an additional increase in taxes is added to the proposal. Failure to act can severely diminish the proceeds from the sale of the business.

The current plan suggests raising the corporate tax rate for C Corporations from 21% to 26.5% (graduated). This proposal would be effective for taxable years beginning after December 31, 2021. If C Corporations are indeed subject to a higher corporate tax rate, there could be a reversal in how small businesses incorporate in the future. Karen Kerrigan, President of the Small Business & Entrepreneurial Council, believes that these tax increases will significantly hurt small businesses, especially those just getting back on their feet after the pandemic. “The foundation is established for a great economic recovery and bounce back to pre-pandemic levels but toying with tax rates at a time like this has a dampening effect,” says Kerrigan. Small to mid-sized businesses want to operate in a stable environment, but this tax uncertainty makes it difficult to plan.

Another proposed change, beginning in 2022, is a 20% pass-through deduction for S Corporations and partnerships at a maximum allowable deduction of $400,000 for single taxpayers and $500,00 for married filing joint taxpayers. This, combined with the proposed increase in the top individual rate from 37% to 39.6% in 2022 for income over $400,00 for single taxpayers and $450,00 for married filing joint taxpayers, poses major tax planning issues for 2021 and beyond.

Along with raising the corporate income tax, the House Ways and Means Committee plans to increase rates for long-term capital gains from 20% to 25%, imposing a Net Investment Income Tax of 3.8% (to include income derived from a trade or business), and add a new 3% surcharge on all income over $5,000,000. The sum of these changes could increase taxes on the sale of a business by 50% or more! Business owners looking to exit should seriously consider planning the structure of a business sale to take advantage of the tax changes.

Let’s look at an example. Say you’re selling your business for $10 million with a basis of zero. Because income is over $5 million, half of the proceeds will have a 3% surcharge. If you were to sell in 2022, $10 million (business sale proceeds) – $10 million of capital gains being taxed at 25%, a 3.8% Net Investment Income Tax surtax of $ 380,00, and a 3% surcharge (on the amount over $5,000,000). This yields over a $3 million tax bill on the sale. If the business were to sell before the end of 2021, the $10 million of gain would be taxed at just 20%, causing only $2,000,000 to be owed. In this scenario, structuring the sale to take advantage of the proposed tax changes obviously results in significant tax savings. We have the tax professionals that can walk you through your taxable event and structure a deal to minimize the taxes you pay, allowing you to ‘retire in the lifestyle’ you’ve earned.

When you exit, you need someone who understands your goals, your years of hard work, and the difficulties of selling a business. As an investment bank for entrepreneurs, Strategic Exit Advisors understands the complexity of the proposed tax changes. We help owners achieve their ultimate exit by focusing our process on strategic buyers willing to pay higher, strategic multiples. The first step to your ultimate exit is just a phone call away!

Give Strategic Exit Advisors a call today.

Strategic Exit Advisors Hires Investment Banking New Analyst

Mon, 20 Sep 2021 13:04:29 GMT

Strategic Exit Advisors (SEA) is pleased to announce that Aayush Desai, through Drexel University’s co-op program , has joined the firm as an Investment Banking Analyst.

Curt Cyliax, Managing Director of SEA, says, “Aayush’s previous experience of working for a start-up business makes him an asset to SEA. He understands the various nuances of entrepreneurship, allowing him to connect with our client base on a personal and professional level.”

Aayush is currently studying Finance and Business Analytics at Drexel’s LeBow College of Business. He is also a member of the University’s Pennoni Honors College and the Professional Fraternity, Delta Sigma Pi. Before joining SEA, Aayush was a Business Development Associate at Vette.io , an HR-related start-up business. While there, he learned the various operational processes of a start-up venture. Additionally, he led a risk management analysis for the company. A native of Montville, New Jersey, Aayush enjoys spending time with his family, watching movies, and is interested in photography and cars.

ABOUT STRATEGIC EXIT ADVISORS

Strategic Exit Advisor is an investment bank for entrepreneurs. We help owners achieve their ultimate exit by focusing our process on strategic buyers willing to pay higher, strategic multiples. We understand what you’ve been through building your business and make certain you get paid for it. At SEA, we focus on the transition, not the transaction

Hey Business Owner - Your Financials Can Tell A Compelling Story And Uncover Startling Revelations

Tue, 13 Jul 2021 07:21:22 GMT

Storytelling is one of the most powerful forms of communication. It allows the audience to understand the context and relate to the information with which they are being presented. As investment bankers, we wear many hats. One of the important roles that we play is helping our clients create and communicate an effective story from their financial information. This is essential because, without proper context, readers of your financial information will create their own story. Therefore, you need to control the narrative so the audience does not make incorrect assumptions and draw the wrong conclusions.

When we engage with prospective clients, one of the first things we do is collect their financial data. As we begin to review the data, we keep an eye on the compelling story that needs to be told. While diving deeper into the financials, we start crafting the “story behind the numbers.” We are also able to reveal the questions or objections buyers will likely pose, so we (our client and SEA) are prepared to respond. Our review also gives more profound insights into the business’s operations and health, which sometimes can uncover things otherwise unaware to the business owner.

Real-life Example

A business owner reached out to us after being approached by a potential buyer of their business. This owner asked if we could represent them in the negotiations and help them prepare a response to an information request list provided by the suitor. One of our first steps was to collect the necessary financial information and begin our deep-dive analysis. Again, this helps us understand the story being told by the financials. While going through our review, we became a bit stymied. The numbers didn’t match the story the owner was telling us, and the owner didn’t have clear answers to our questions. As we worked with the owner to probe deeper, we discovered that the company’s controller was in way above her head. She had been following an accounting process that had been put in place decades ago which was no longer relevant to the current business. It created wild fluctuations in the way margins were presented, causing the company’s leaders to make decisions based upon wrong information.

We recommended bringing in outside accountants to help with a few items. First, the books and records needed to be cleaned up. Second, the accounting processes required a review and update to ensure that the financials were clean and accurate going forward. The business owner took our recommendation. As a result, not only did this process accomplish these two primary goals, but it also opened a Pandora’s box of other issues. The outside accountants confirmed that the controller did not understand why she was doing things the way she was. More importantly, they also revealed that the controller had been stealing from the company for years.

The controller was immediately terminated, and competent financial professionals were put in place at the company. Following an extensive clean-up and numerous one-time write-offs, the company is now generating accurate, defensible financial information. Management is now making solid operational decisions based upon reliable data, with the company being on track to have its strongest year ever.

The moral of the story? Make sure you understand the story that your numbers tell – you never know what you might learn.

Need help crafting your story? One that will be compelling to buyers of your business. Or do you want to know if your financial information is even in a condition to tell a story? We can help. The first step to your ultimate exit is just a phone call away! Let’s schedule that call . It will be worth your time.

Container & Packaging - M&A Advisor - Q2 2021

Thu, 27 May 2021 11:24:00 GMT

Executive summary

Because of COVID, some of the key drivers of the industry may continue affecting the performance of plastic manufacturers. Despite consumer spending which is expected to increase against 2020, it will not reach pre-pandemic levels. Otherwise, the demand for food manufacturing is increasing since last year, which is why sales of plastic packaging products are anticipated to grow in 2021.

A large portion of the general manufacturing sector has been deemed essential by federal guidelines from the Cybersecurity and Infrastructure Security Agency (CISA). Since plastic film and packaging is critical to ensuring sanitary trade of goods, many industry players are expected to maintain operations through the pandemic period.

Globalization has increased in recent years, particularly in the plastic film and sheet packaging segment. US operators with foreign operations include Berry Global Group Inc., Sealed Air Corporation, Bemis Company Inc., and Printpack Inc. Foreign-owned operators with US operations include Rio Tinto Alcan Inc. and Amcor.

Spotlight of Packaging Machinery Manufacturing – Market conditions

Source: IBIS World, Freedonia

The Packaging Machinery Manufacturing industry is projected to expand at a solid pace of 1.9 percent per year to $8.1 billion in the five years to 2025. After the pandemic, increased consumer spending will fuel sales of food, beverage, and pharmaceutical goods, driving up demand for packaging equipment to prepare such products for the market.

This will not only increase demand for consumer goods but also will lead to an expansion of industrial production capacity.

Packaging machinery demand is expected to grow at a 4.5 percent annual rate to $60.4 billion by 2023, due to: first, advances in the most relevant markets like production of food and beverages, household goods manufacturers, and pharmaceutical manufacturers. Second, the wide variety of packaged goods manufactured around the world in categories as filling and form/fill/seal equipment; labeling and coding machinery; etc.

Packaging equipment capacity

United States has high quality and new manufacturing plants. Therefore, foreign companies will seek to buy packaging machinery from US producers. As a result, exports are expected to rise an annualized 2.2% to $1.3 billion over the five years to 2025, making up a projected 15.2% of industry revenue.

Nevertheless, one of the most challenging scenarios for the US economy is the increase of import penetration. The manufacturing potential of packaging equipment is concentrated in five countries: China, Italy, Germany, the United States, and Japan. As a result, domestic market players are forced to concentrate on innovation and technological advancement to maintain a quality-based competitive edge. Domestic operators are now willing to invest more in quality and production processes as customer trust and economic conditions improve, allowing them to better compete on price and quality. Manufacturing production will be concentrated in industrialized economies, and as a result, business operators will search for ways to expand through exports.

Finally, the industry’s growth will be supported by the ongoing recovery of downstream economies, with increased consumer spending driving up demand for food and beverage products as well as household goods. However, since the industry is mature, new revenue streams would be restricted in the domestic market.

Spotlight of Packaging Machinery Manufacturing – M&A Landscape

Source: McKinsey & Co., PWC and Capital IQ

M&A has demonstrated to be an effective technique for both Private Equity firms and strategic packaging companies. Excess Private Equity capital would raise the demand for packaging deals; dry powder for Private Equity companies has reached an all-time high, and in today’s world, acquisition growth is often easier than organic growth.

A variety of companies have made acquisitions to boost their positions in the global packaging machinery market. For example, between 2017 and 2019, Italy’s IMA acquired a 60% stake in EUROSICMA, a 70% stake in Ciemme, a 70% stake in Italy’s Spreafico Automation, and a 61.5 percent stake in Argentina’s Tecmar. At that time, it also acquired Tissue Machinery (Italy).

More recently, in 2020 there were 289 packaging company acquisitions. Buyers broadened their manufacturing capabilities by concentrating on specialty and custom packaging solutions to provide a wider variety of services to customers. In terms
of transaction volume, it is one of the most productive sectors in the world.

As a result of this strong and continuing demand, packaging M&A multiples have risen by approximately a fifth over the last five years. We are currently seeing transactions with Enterprise Values ranging from 8 to 10 times EBITDA. While valuations have weakened slightly in recent months, M&A activity has remained high in terms of the number of transactions.

Market movers

Top acquirers (Source: Pitchbook)

Owner and operator of a technology conglomerate intended to manufacture equipment for the production, packaging, and distribution of food products. The company, through its subsidiaries, offers a plethora of products such as ice creams, cheese, dry foods, fruits, vegetables, pet food, equipment, and systems for milk production and animal husbandry, pet packaging services as well as blow molding, filling, and bottling equipment, enabling clients to achieve sustained growth and profitability in sectors such as production, packaging, and distribution of food products and equipment.

Krones AG offers machinery and systems for filling, packaging, and producing beverages. Part of its product portfolio is information technology and planning associated with logistics and production lines. In addition to packaging, the company has cellar systems to treat and store sensitive beverages.

Manufacturer of machinery for packaging, corrugating, sheeting, and paper converting industries. The company provides packaging technologies such as pouch packing, capping and seaming, cartooning and sleeving, case and tray packing to their clients. It seeks to acquire other companies whose businesses will complement its existing operations and those that make packaging equipment and paper processing equipment.

Robert Bosch is a German multinational engineering and electronics company that provides technology and services worldwide. The company was founded by Robert Bosch in Stuttgart in 1886. It operates through four segments: mobility solutions, industrial technology, consumer goods and energy, and building technology segments. The Corporate Development team of Bosch acquires companies that are in the same line of businesses.

Manufacturer of packaging machinery. The company engages in the design, manufacture, sale, and service of cartoning and robotic solutions machinery, product handling, feeding, distribution, and storage systems, flow wrapping applications, roll-stick wrapping machines, case packing, shrink wrapping, and end-of-line packaging machinery, such as film wrapping and board packing. The company operates manufacturing sites in North America and Europe.

Designer, manufacturer, and seller of automated machinery, packaging materials, industrial process solutions, and precision gears to the aerospace, consumer goods, electronics, healthcare, luxury goods, pharmaceutical, and tobacco industries. The company’s products include aseptic filler machines, package opening and closing systems, production control systems, in-line printing equipment and others.

Strategic Exit Advisors Assisted with the Sale of SS Industries

Tue, 18 May 2021 14:15:59 GMT

May 17, 2021 –

Previously, Strategic Exit Advisors (SEA) proudly announced that we successfully closed the sale of a Direct-to-Consumer Building Products Company to a Strategic Buyer. Now, we are able to identify the parties.

Our client, SS Industries, a direct-to-consumer building products company was sold to Marwin, a portfolio investment of Validor Capital.

SS Industries has revamped the way building products are designed, built, and shipped throughout North American from a single manufacturing facility. SS Industries’ digital marketing approach has transformed the traditional model utilized for the distribution of building products.

Under new ownership, SS Industries continues to operate with existing management and all its employees, including the previous owner. With this transaction, the company is positioned to accelerate the rapid growth of its product lines and to acquire additional lines adaptable to the company’s proprietary digital platform.

Tony Parisi, Managing Director, led the sale process for SEA. He reflects on navigating the market during the pandemic, “We adapted the sell-side process for our client when the crisis struck. We were fortunate to work with a client who responded to the pandemic in an agile and effective manner and with a buyer that was similarly resilient. After a short pause, we completed the sale in a timely period with a great result for both parties.”

ABOUT STRATEGIC EXIT ADVISORS

Recasting Financials for COVID – What’s standard & accepted

Tue, 11 May 2021 08:50:23 GMT

Nearly every business has been impacted in some way by COVID and the resulting economic shutdown. There are a fortunate few that are operating in sectors that saw an increase in business. However, most have experienced challenges in the form of lost or delayed revenues, lost productivity, staffing shortages, supply chain problems, and new costs associated with remote working and safe reopening requirements. For many of these companies, economic stimulus, primarily in the form of forgiven PPP loans, have helped to offset some (if not all) of these losses.

One year ago, shortly after the beginning of the shutdown, we published an article , advising owners to document with as much detail as possible the financial impact of the shutdown on their business. With 2020 behind us and a strong M&A market for sellers, we are now working with our business owner prospects and clients to help them “normalize” the presentation of their earnings for prospective buyers. In comparison to 2019, many have lower revenues without corresponding reductions in expenses, and almost all show income from PPP loans that were forgiven prior to the end of 2020.

Crafting this presentation in a realistic way, supported by data, is key to maintaining credibility with buyers. It requires really digging into the company’s numbers, its industry dynamics, and the many factors that may have impacted performance during this time. Including PPP income in the final presentation of profit and expecting buyers to value the company based on that will raise eyebrows. This will likely bring a quick end to the conversation. Buyers want to truly understand the impact that the shutdown had on the business and, more importantly, what the company will look like going forward – after all, they are buying the future, not the past.

The areas where we are seeing the greatest impact, and requiring documented support include the following:

Incremental Expenses – Any expenses that your business incurred that it would not have otherwise incurred but for COVID-19. These might include video conference services, legal fees for CIVID-related HR issues, technology, sanitation costs, etc.
Capital Expenditures – Did you invest in any assets that you would not have if it were not for COVID-19 such as laptops for remote workers, video conference equipment, etc.?
Loss of productivity – Did you capture any costs that you incurred that did not generate any return for the company such as paying employees with no work, loss of deposits for travel, conferences, vendor and supplier issues that impact company productivity, etc.?
Loss of Revenue – While this may be more difficult to quantify for some, try to document cancelled orders/projects or any other data that can help you quantify lost revenue such as stalled pipeline or prospects who no longer have a budget to buy your products or services.

We are talking with buyers every day. As such, we can help you create a presentation that will let their attention and pique their interest in your business. If you have any questions, please don’t hesitate to reach out. The first step to your ultimate exit is just a phone call away! Give SEA a call today.

Strategic Exit Advisors Hires New Investment Banking Analyst

Mon, 19 Apr 2021 12:58:16 GMT

Strategic Exit Advisors (SEA) is pleased to announce that Brandon Yan, through Drexel University’s CO-OP program, has joined the firm as an Investment Banking Analyst.

Curt Cyliax, Managing Director of SEA, says, “Brandon’s previous experience with the buy-side of the M&A process will work well with SEA’s approach to helping our entrepreneurial clients successfully exit their businesses while preparing them for what comes next.”

Yan is currently studying Finance and Business Analytics at Drexel University. In addition to his studies, he is a member of Sharing Excess which is a non-profit focused on eliminating food insecurity. He is also a member of the Sigma Phi Epsilon fraternity and is co-founder/lead analyst of the Drexel SigEp Investment Fund. Prior to his role as an Investment Banking Analyst at SEA, he worked as a Private Equity Analyst at Bellator Trust, LLC., a search fund based out of San Antonio where he learned the ins and outs of the M&A process from the buy side. A native of Katy, TX, Brandon enjoys traveling with his family, trying new restaurants with friends, listening to country music, and working out.

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Don’t Wait – Sell Your Business Before Tax Increases

Fri, 05 Mar 2021 10:04:28 GMT

At some point, virtually all business owners will come across an opportunity to exit their business. Hopefully for them, the opportunity to exit means selling the business for a significant price to the right buyer. However, choosing when to sell remains a million-dollar question for which the answer evades most people. Time this wrong and you could pay more in taxes, get a bad multiple, not close, or sell to just any buyer instead of the right buyer – one who shares your values and vision. Just as important as choosing when to sell is having a robust plan in place when you go to sell and exit your business. While a good exit plan takes time to prepare, it will make the transition much easier for you. One of the key parts of any exit plan in business is to account for your taxes. The goal is to limit how much tax you pay whilst playing by the rules of the game.

Taxation is at the center of any of company upon its formation and, quite frankly, through the years of operating the business. However, it becomes even more important as you exit. After years of sleepless nights and challenging days, business owners want to know one thing,” How much am I walking away with?” As an entrepreneur, you know the effort it took build your business and now you deserve to reap the benefits.

Let us look back to 2012, when we faced a similar situation regarding taxes. There was a good amount of uncertainty surrounding business owners during this time. The Affordable Care Act caused uncertainty with regulatory complexity and an increased tax burden on business owners looking to exit. According to GF Data, the amount of middle-market deals from Q3-Q4 of 2012 nearly tripled from 30 deals to 89 deals in expectation of 2013 tax increases for sellers of businesses. This push for liquidity came at a price with the average EV/EBITDA multiple decreasing from 6.9x to 5.9x over this period.

This year we have another situation where we know that taxes will need to be increased from a fiscal standpoint. The need to increase taxes is clear given the recent deficits in the budget and the increased need for spending. Owners selling their businesses are likely to be targeted again as, over the past 5-10 years, it has become more palatable to tax business to foot the bill. What does this mean for you? Although it is uncertain to what extent that taxes will go up on sellers in the next 18 months, it is likely to affect how much you walk away with if you risk selling later. If you have thought about selling your business and were looking for a sign from the market to sell, this is it.

When you go to exit, you need someone who understands your goals, your years of hard work, and the difficulties of selling a business. As an investment bank for entrepreneurs, Strategic Exit Advisors gets it. We help owners achieve their ultimate exit by focusing our process on strategic buyers willing to pay higher, strategic multiples. The first step to your ultimate exit is just a phone call away! Give SEA a call today.

Container & Packaging M&A Newsletter - Q1 2021

Wed, 03 Mar 2021 11:11:57 GMT

Executive summary

Spotlight of Plastic Film, Sheet & Bag

Market conditions (Source: IBIS World)

This industry converts plastic resins into various films, sheets, and bags. Industry products are used by manufacturers for packing and storing products, by retailers for transporting merchandise, and by consumers for household purposes.
Industry operators also form, coat, or laminate plastic film and sheets into single-wall or multiwall plastic bags. In the past five years, this industry has experienced a consistent decline. The Plastic Film, Sheet & Bag industry saw a decrease at an annualized rate of 0.7% over the past five years, totaling $43.5 billion in sales in 2020. Just in the last year, however, 2020 saw an 3.6% increase bucking the annualized industry decline. This increase is a direct result of the pandemic.

COVID-19 has caused different effects on the revenue growth of the industry since domestic demand for single-use plastics is expected to surge as a sanitary measure against coronavirus. Moving forward, industry revenue is expected to grow at an annualized rate of 0.4% to reach $44.5 billion over the next five years. As the US economy expanded for much of the last five-year period, increased consumer spending fueled demand for industry products. However, the ongoing environmental debate surrounding the use of single-use plastic bags has proved a challenge, and the industry was forced to contend with local governments that aim to limit the use of single-use plastic bags, among other industry products. For example, prior to the coronavirus pandemic, California and New York have passed bans on single-use plastic bags.

However, increased focus on sanitation among businesses from all sectors has forced policymakers to temporarily suspend these restrictions.

Consumer spending is expected to grow at an annualized rate of 3.8% between 2020 and 2025, requiring increased volumes of plastic film, sheets, and bags. Similarly, e-commerce sales are forecast to increase over the coming five years, benefiting operators directly involved in shipment packaging. Nonetheless, an expected resurgence in the value of industry imports will intensify external competition for industry operators, enabling a larger portion of domestic demand to be satisfied by international substitutes.

Spotlight of Plastic Film, Sheet & Bag

M&A Landscape (Source: Pitchbook)

The US market for Plastic Film, Sheet & Bag industry increased PE activity from 2015 to 2019. In this period, the capital raised has a CAGR of 17.2%. Just in 2019, the capital raised fell by 55.2% vs the previous year. In 2020, the same metric decreased by 47.0%. However, the increase in consumer spending and the growing demand for sustainable and biodegradable packaging materials will require significant funding for business development in the short-term.

In M&A activity, the number of deals has decreased in 2019 (24.7% vs 2018) and decreased in 2020 by only 4% vs the previous year. Deals also have decreased the median deal size in 2020 ($350M) by 60.9% against 2019 ($895M) and 2018 ($543M). Nevertheless, in 2021, hygiene and food safety concerns continue to grow as consumers navigate the pandemic. Packaging for end- users, as well as products for warehouses and e- commerce suppliers, will continue to be a driving force, that is why this year the M&A activity is expected to increase.

Market movers

Top acquirers (Source: Pitchbook)

Sigma Plastics Group is a manufacturer of extruded polyethylene films and bags. Some of its products include stretch films, machine wrap films, mono-layer bags, horizontal FFS films, co- extruded bags, and liners. It looks forward to taking over other companies that manufacture and supply plastic packaging films, perforated sheets, polyethylene films, polypropylene films, and other plastic packaging materials.

Berry Global Group Inc. manufactures and sells plastic packaging products in three segments based on the product type. The consumer packaging segment, which generates the most revenue of any segment, sells containers, plastic drink cups, prescription vials, and printed bags for food products. The health, hygiene, and specialties segment sell baby diapers, feminine hygiene products, and substrates for dryer sheets. The engineered materials segment sells tapes, retail trash bags, plastic films used to wrap meat, and shrink films.

Printpack Inc. (Printpack), founded in 1956, is privately held and headquartered in Atlanta. Printpack is a major flexible and specialty rigid packaging manufacturer known for its expertise in flexographic and rotogravure printing. The company’s other major products and services include adhesive and extrusion lamination, metallization, blown and cast films, cold seal, bag making, thermoforming, and wax coating. The company also produces bags and pouches, cereal liners, cold seals, and atmosphere packaging. Customers include Frito-Lay Inc., The Hershey Company, Georgia-Pacific LLC, and General Mills Inc.

Inteplast Group maintains three divisions – AmTopp, Integrated Bagging Systems (IBS), and World-Pak – covering a full range of customer needs. The company provides biaxially oriented polypropylene (BOPP) and stretch-wrap films, plastic concentrates and compounds, grocery, merchandise, and garment bags, trash can liners and institutional products, fluted and corrugated-plastic sheets, XF cross-laminated films, and the TUF board line of synthetic wood products. The company seeks to expand its business operations through mergers and acquisitions.

Thiele Technologies (BW brand) is a designer and manufacturer of special purpose packaging equipment. The company designs manufacture and integrate placing, bagging, cartoning, case packing, and palletizing systems for various industries. It was founded in 1931 and is headquartered in Minneapolis, Minnesota. The company continues to grow by making periodic small acquisitions.

Strategic Exit Advisors Pays It Forward to the Domestic Violence Center of Chester County

Wed, 24 Feb 2021 09:17:01 GMT

February 24, 2021 – Mighty Moose Hockey Club and Strategic Exit Advisors (SEA) have proudly provided matching gifts to the Domestic Violence Center of Chester County (DVCCC) .DVCCC empowers survivors of domestic violence by providing intervention, education, outreach, advocacy and programs. Last year, DVCCC provided 12,491 hours of counseling, provided legal advice to 1,043 individuals, gave refuge with 8,780 nights of emergency shelter and bridge housing and found independent housing for 42 people. Please consider supporting DVCCC Make an Impact .

Mighty Moose Hockey Club builds bonds and empowerment for girls and women through the game of ice hockey.

“It is SEA’s honor to support DVCCC as part of our Pay It Forward Program. And, it is our pleasure to team up with Mighty Moose Hockey, a club of dynamic women and girls,” says Tony Parisi, SEA Managing Director.

Danielle Dougherty, DVCCC’s Director of Philanthropic Partnerships is pictured below, along with Mighty Moose President Paula Jorgenson and players Claudia LaTorraca and Sophia Parisi, as well as SEA Managing Director Tony Parisi, who also heads the coaching staff of the Mighty Moose.

About Strategic Exit Advisors: SEA is an investment bank for entrepreneurs. We help owners achieve their ultimate exit by focusing our process on strategic buyers willing to pay higher, strategic multiples.

Selling Your Company: An Emotional Journey

Wed, 17 Feb 2021 13:53:43 GMT

The final decision to sell a business is one of the most difficult decisions an owner will make, and the process is extremely demanding. Although there are a number of financial and operational milestones, there is an entirely separate and often overlooked aspect that makes the process unique – the emotional volatility that can consume every bit of the owner’s energy.

In her book The Seller’s Journey, Denise Logan (The Seller Whisperer, Psychologist, and Attorney) shares her wealth of experience and insight into the emotional obstacles that business owners face when exiting their business. The overarching theme is to not underestimate the emotional toll associated with the process of selling a business. Here are three takeaways for business owners:

You must have a post-life plan before selling, and you need to ask yourself tough questions. A few questions would be: “what is my plan after I sell this business?”, “what does my business actually mean to me?”, and “do I have the right people around me to make this successful?”. Also, ask yourself who will you be after you sell: will you spend more time with loved ones, or find a new hobby? How will you fill the void of not running your business? Travelling and playing golf after selling may not suffice. Going through the sale process without answering these questions will cause more stress and uncertainty.
When choosing to sell, immediate financial decisions need to be made; a deal team will be created consisting of investment bankers, lawyers, and accountants. It is imperative to be surrounded by trusted advisors and those who will emotionally support you throughout your journey. In the book, the main character client repeatedly states that he never realized how much support he needed throughout the entire sales process; not just financial help, but also emotional help. By instilling trust and communicating to his team, he reached the end zone.
Selling a business is not just a transaction – it is a life transition that will require sharing your vulnerabilities. Thinking about letting go is often the most common one, and this fear elicits a range of emotions. When you feel isolated, scared, and want to quit, communicate to your team and let them in – it will help you “garner a sense of respect.” That authenticity will help you feel comfortable during an uncomfortable process. Ultimately, it will lead you to success – knowing that you made the right decision for you.

If you are a business owner and are serious about selling, the journey you are about to embark on will be an emotional roller coaster. Recognize and conquer the emotional toll – you will make the process smoother and more successful.

SEA is proud to announce the successful sale of Vitiello Communications Group to Huntsworth

Mon, 25 Jan 2021 08:47:01 GMT

January 20, 2020 – Strategic Exit Advisors (SEA) is proud to announce the successful sale of its client, Vitiello Communications Group (VTLO) to Huntsworth – the UK-based international healthcare and communications group. SEA acted as the exclusive financial advisor to Vitiello Communications Group throughout the process, providing sell-side investment banking services.

Under new ownership, Vitiello will become part of The Creative Engagement Group (TCEG) bolstering its fast-growing employee engagement agency Forty1, which is led internationally by Richard Burton. The acquisition strengthens the group’s ability to deliver a wide range of integrated employee engagement solutions to clients in North America and globally — and capitalizes on TCEG’s extensive range of creative capabilities in film, digital and experiential.

Russ Lidstone, Group CEO of The Creative Engagement Group said, “I’m delighted to welcome Vitiello to The Creative Engagement Group. Jill and the team are really talented, great people and their addition gives our Forty1 employee engagement division even greater ability to service our global clients. It also underpins our commitment to creating moments that inspire lasting change and helping our clients to build organisational capability.”

Reflecting on the process, Jill Vitiello, Founder and Chief Executive Officer of Vitiello Communications Group said, “SEA’s professionalism, expertise and guidance are extraordinary. The team’s ability to read the market and expertly lead our process through a pandemic allowed us to achieve the best outcome. SEA identified a great partner in TCEG, enabling Vitiello to continue its growth and expand it service offerings to clients.”

About Vitiello Communications Group

Established in 1990 by founder and CEO Jill Vitiello, headquartered in North Brunswick, NJ, Vitiello Communications Group provides specialist services to large pharmaceutical companies focused on enhancing the employee experience. The team at Vitiello works closely with internal communications, human resources, and business leaders to develop communication strategies and create change management and culture-related content to help drive long-term business performance. For more information, please visit https://vtlo.com

About Strategic Exit Advisors

Strategic Exit Advisors (SEA) is an investment bank for entrepreneurs. SEA helps owners achieve their ultimate exit by focusing their process on strategic buyers willing to pay higher, strategic multiples. Since 2007, SEA has advised owners of privately held businesses in the middle market to execute the successful sale of their businesses.

2021 M&A Outlook

Thu, 07 Jan 2021 07:32:50 GMT

The year 2020 will likely be remembered for the historic health and economic toll of the pandemic, but the promise of a brighter 2021 may be on the horizon, thanks to newly developed vaccines and federal stimulus’ that could help cure what has been ailing the nation physically, psychologically, and economically. While not a prognostication, we thought we’d reflect on what we have witnessed firsthand from the pillars of industry, Entrepreneurs!

The economy started off very strong in 2020. The pandemic hit, shutdowns began, and uncertainty ensued. After the shock of the pandemic passed an unexpected rebound happened for many but not all sectors. A bifurcated market arose as the economy began to strengthen. While certain industries were prepared for these uncharted waters and others pivoted with the prevailing winds, clear damage had been done to many sectors of the economy.

We believe 2022 will be a better year than last year. At the very least, it certainly should be another exciting year!

We look forward to Strategic Exit Advisors continuing to be your trusted partner. We’re available for a call anytime (215) 489-8881.

¹ 2022 Business Leaders Outlook, 12 ^th annual survey

2020 is NOT the Same as the 2008 Downturn

Wed, 09 Dec 2020 07:37:39 GMT

It has been almost 12 years since the United States officially entered a recession.

In 2008, large institutions declared bankruptcy, unemployment rates rose to 10%, stock markets crashed, and global governments scrambled to support faltering economies. Sound familiar?

On the surface, 2020 appears to repeat the events of 2008. We have seen 33 million jobs lost since the crisis began, single-day stock market dips of 15%, and the passing of a $2.2 trillion stimulus package. While these similarities between the two downturns may offer important lessons to policymakers and businesses, it is still important to note the differences this time around.

The unexpected onset, cyclical nature, and liquidity availability of COVID-19 contrasts with the gradual, systematic roots of 2008. Based upon this information, it is likely that this downturn will present businesses with more opportunities than the last.

Systematic Problem vs. Black Swan Event

The differences between 2008 and 2020 begins with their origins. 2008 was a systematic financial crisis: subprime mortgages, unstable institutions, and high levels of consumer credit had accumulated for over a decade without notice. These unsustainable systematic imbalances ultimately triggered a market collapse that began in the U.S. but reverberated throughout the world. In other words, 2008 exposed fundamental flaws in the economic and financial systems that would take years to correct.

Meanwhile, the present downturn is a black swan event – unpredictable and impactful. Unlike the Great Recession, 2020 conditions stem from a health crisis. The shutdown triggered by the COVID-19 pandemic has had a relatively small effect on banks: recently, Goldman Sachs beat analyst earnings estimates by $3.5B. The repercussions from 2008 forced many institutions to better equip their balance sheets for future downturns, mitigating problems within our financial systems. Therefore, due to 2020’s lack of systematic issues and unexpected nature, it is predicted that the U.S. will experience a quicker economic recovery than expected in 2008.

Gradual Reaction vs. Immediate Response

Another difference between the two downturns is speed: how fast monetary and fiscal policies were put in place and how quickly the economy reacted to recession triggers.

Although the Great Recession officially began at the end of 2007, TARP (The Troubled Asset and Relief Program) was not passed until October 3, 2008. Meanwhile, the CARES Act was signed into law on March 27, 2020 – only a few weeks after the virus began to take its toll on the U.S. economy. The speed of government response to this downturn is an important factor in shielding the economy from short-term impacts of the pandemic, though long-term effects are still up for debate.

Comparing the 2008 and 2020 stock markets, we also identify the same pattern. In 2008, the stock market lost 40% off its peak through the course of one year and did not fully recover until 4 years later. In 2020, the S&P500 fell by 34% between February 19th and March 23rd, the fastest fall into a bear market in US history. Shortly thereafter, it began to grow again and has since almost caught up to pre-pandemic levels. The subsequent growth is a good indicator of investor confidence for the future of our economy, signifying a quicker return to normal. Knowing this information, many companies are already preparing to take advantage of the post-pandemic M&A market.

Debt vs. Liquidity

Near the end of the 2008 recession, an M&A window opened, during which the few companies who were prepared, liquid, and risk-tolerant made strategic purchases that helped them outperform those who did not.

This time around, investors are much more stable, prepared, and liquid. Cash on corporate balance sheets is at $2.4 trillion, interest rates are near zero and corporate tax rates are at 21% (the lowest they have been since the 1930s). Additionally, PE dry powder – a strong indication of investor sentiment – is at its highest ever: $2.5 trillion. Whereas 2008 saw PE activity drop off by 72%, PE deal volume only dropped by 36% in 2020 and is already growing again. These vital differences show a market that is gearing up for acquisitions upon signs of recovery.

An abundance of liquidity, quick external responses, and non-systemic roots support that the 2020 downturn will be different than 2008. But what does this mean for your business? If you want to learn more about market conditions and their implications, reach out to Strategic Exit Advisors today. As an investment bank for entrepreneurs that was founded during the Great Recession, we can help you gain much-needed clarity and take advantage of important business opportunities during these pressing times.

Strategic Exit Advisors Proudly Supports Close School of Entrepreneurship from its “Pay it Forward” Program

Tue, 01 Dec 2020 08:58:20 GMT

December 1, 2020 – Strategic Exit Advisors is pleased to announce its support for Drexel University’s Close School of Entrepreneurship. Through SEA’s “Pay it Forward” program, the firm made a financial contribution to the Close School.Bob Cahill, a Managing Director of SEA and Drexel alum, says, “We started our “Pay it Forward” program to provide financial support important to both our clients and our community. We chose the Drexel University Close School of Entrepreneurship for its commitment to helping young people become tomorrow’s entrepreneurs.”

Donna DeCarolis, founding Dean of the Close School of Entrepreneurship, adds, “The Close School provides focus on the person and process in its unique curriculum designed to build resilience, confidence, and leadership in budding entrepreneurs. The program has been growing and includes a required minor. It’s Entrepreneurship Co-op gives the student the experience in starting a business where failure is not frowned upon.”

Drexel University’s Close School of Entrepreneurship is the nation’s first freestanding school of entrepreneurship to offer degrees. Building on an outstanding foundation of curriculum, programming and thought leadership at Drexel, the Close School is the engine driving the expanded culture of entrepreneurship envisioned by the University’s strategic plan. Drexel students can benefit from several Close School programs, including Entrepreneurial Co-ops, offering mentoring and financial support to students who spend a co-op period working in their own business.

About Strategic Exit Advisors: SEA is an investment bank focused on mergers and acquisitions in the Life Sciences, B2B Services, and other industries, helping CEOs with revenues of $5 to $100 million. SEA delivers the same rigorous M&A process to firms that the Fortune 500 companies enjoy by matching sellers with strategic buyers from around the globe. Since 2007, SEA has advised owners of privately held businesses in the middle market to execute the successful sale of their businesses. SEA offers complimentary consultations to business owners regarding the M&A process and the value of their businesses.

Strategic Exit Advisors Hires New Analyst

Wed, 18 Nov 2020 13:07:39 GMT

Strategic Exit Advisors (SEA) is pleased to announce that Erum Hamid, through Drexel University’s C0-OP program, has joined the firm as an Investment Banking Analyst.

Curt Cyliax, Managing Director of SEA, says, “Erum brings a unique perspective to the M&A landscape by leveraging her ground-level knowledge of business development and operations to help entrepreneurs navigate the exit process and prepare them for the next chapter of their lives.”

Hamid is currently studying economics and finance at Drexel University. In addition to economics and finance, she is passionate about learning world history, architecture, and aviation. Prior to joining SEA, she worked at Vanguard as a financial operations intern. She has also worked at the Yunus Center as a social business intern to alleviate poverty levels in Bangladesh.

About Strategic Exit Advisors: SEA is an investment bank focused on mergers and acquisitions in the Life Sciences, B2B Services, and other industries, helping CEOs with revenues of $5 to $100 million. SEA delivers the same rigorous M&A process to firms that the Fortune 500 companies enjoy by matching sellers with strategic buyers from around the globe. Since 2007, SEA has advised owners of privately held businesses in the middle market to execute the successful sale of their businesses. SEA offers complimentary consultations to business owners regarding the M&A process and the value of their businesses. Strategic Exit Advisors (SEA) is pleased to announce that Erum Hamid, through Drexel University’s C0-OP program, has joined the firm as an Investment Banking Analyst.

We're proud to announce the sale of a Direct-to-Consumer Building Products Company to a Strategic Buyer

Thu, 05 Nov 2020 09:41:29 GMT

November 5, 2020 – Strategic Exit Advisors (SEA) is proud to announce that we successfully closed the sale of a Direct-to-Consumer Building Products Company to a Strategic Buyer.

Our client, the Seller, has revamped the way building products are designed, built, and shipped throughout North American from a single manufacturing facility. The company’s digital marketing approach has transformed the traditional model utilized for the distribution of building products.

Under new ownership, the company continues to operate with existing management and all of its employees, including the previous owner. With this transaction, the company is positioned to accelerate the rapid growth of its product lines and to acquire additional lines adaptable to the company’s proprietary digital platform.

All details of the transaction remain confidential at this time. SEA will release additional details as permitted by both parties.

About Strategic Exit Advisors: SEA is an investment bank focused on mergers and acquisitions in the Life Sciences, B2B Services, and other industries, helping entrepreneurial companies with revenues of $5 to $100 million. SEA delivers the same rigorous M&A process to firms that Fortune 500 companies enjoy by matching sellers with strategic and financial buyers from around the globe. Since 2007, SEA has advised owners of privately held businesses in the middle market to execute the successful sale of their businesses.

Strategic Exit Advisors Among the Philadelphia100®

Wed, 28 Oct 2020 05:12:04 GMT

Strategic Exit Advisors is proud to announce that we have been named #28 among the top Philadelphia100® companies. The Philadelphia 100® is run by the Entrepreneurs’ Forum of Greater Philadelphia and honors the 100 fastest growing, privately held entrepreneurial companies in the Greater Philadelphia Region.

Winners were announced virtually on October 21 where keynote speaker, Loree Jones, CEO of Philabundance, shared a dynamic story about being a leader and entrepreneur.

Curt Cyliax, Managing Director of SEA says, “It is an honor to be among so many impressive companies and I congratulate each one of them. This award means a lot to me and my team. We thank the Entrepreneurs’ Forum of Greater Philadelphia. We also thank our many terrific clients and friends. These folks are the true life-blood of SEA.”

The Philadelphia100® is a merit-based program. Only companies that are among the fastest growing, privately held companies are awarded the Philadelphia100® designation. The integrity of the process and the resulting list makes the Philadelphia100® one of the most sought awards in the region.

Waiting Too Long To Sell

Wed, 07 Oct 2020 11:14:16 GMT

“Next year,” you told yourself, “I’ll be ready to sell then.”

These same words have been echoed by hardworking entrepreneurs across the country; by people who aim to sell their businesses, retire to an island in the Bahamas, even out their golf swings, and spend well-deserved time with family. But now, the pandemic has complicated that possibility. A global health crisis and consequent economic downturn have put some individuals out of business while others are stuck conducting remote Zoom calls, navigating cost-saving strategies, and assessing future risks for their companies.

As an investment bank for entrepreneurs, Strategic Exit Advisors has directly witnessed the challenges and unknowns COVID-19 has created for small and mid-sized businesses across the United States. Unfortunately, pandemic aside, this is not the first time that we have seen the repercussions of waiting too long. As exemplified by the following war stories, business owners who are not mentally, financially, and structurally ready to sell often see the value of their businesses decline.

Think Logically

Entrepreneurs are optimists by nature. No one knew this better than Bill, a small-business owner, and risk-taker. After 32 years of running his company, Bill had one objective: to fund his retirement. Despite optimal market conditions, stable operations, and advice from his business coach, he decided to wait 2 more years. Although he could not articulate any concrete objectives, he believed that his business had not reached its full potential COVID came, he lost a valuable employee, encountered fierce competition, and saw his revenues decline. By listening to his gut over reason, Bill missed his window.

Know your Numbers

Madeleine and Terry, two young business owners, were ready to sell their company and embark on new projects. However, upon reviewing the business’s financial statements, it was revealed that a basic bookkeeping system and unorganized data hindered their ability to supply necessary information in a timely manner. The solution was a costly and time-consuming financial audit. Then, the pandemic hit, and the non-essential business was rendered useless after the lockdown. Immediately, revenues dropped, and all employees were laid off. Operational unpreparedness had caused delays in Madeleine and Terry’s selling process, resulting in an unexpected loss.

Pay Attention
Joe ran his company for 25 years before he decided that it was time to exit. He believed that he had a liquid business, stable structure and strong management team. But when his advisors reviewed his materials, they found outdated operating systems, falling annual revenues, and noncontributing employees. Joe’s business would not withstand due diligence because it had deteriorated with time, a problem that could have been avoided by consulting with an investment banker sooner.

Bill, Madeleine, Terry, and Joe are a few examples of numerous business owners who waited too long. Their war stories highlight the importance of being mentally, financially, and structurally prepared. Because, in the end, you cannot predict the exact timing of a global pandemic, economic recession or new product innovation – you can only act early. So, if you are thinking about selling your business – don’t tell yourself “next year,” tell yourself “now.” Take our 18-hole survey or connect with a SEA managing director to see whether you are ready to sell.

*all names referenced are fictional

Sellers - Don’t Miss Your Window of Opportunity

Tue, 15 Sep 2020 13:57:38 GMT

COVID-19 has posed a significant challenge to the global economy. In the United States, a report conducted by RSM found that middle market firms have reported a hiring decrease of 46 percent and a gross revenue decrease of 61 percent. Despite the headlines, however, many sectors are experiencing an increase in M&A activity, and companies that have performed well through the pandemic are receiving premium valuations. Business owners who have considered selling their business in the last year would be wise to evaluate their options to take advantage of this window of opportunity.

As a response to the economic suffering endured by the United States, both the federal government and Federal Reserve have created measures aimed at supporting the economy. According to the Washington Post, roughly $6 trillion has been spent to date, and Congress is drafting an additional spending bill to further combat the recession. While economic stimulus can be viewed as a necessity to prevent further economic downturn, it should also be noted that the money has to come from somewhere – taxes. Tax rates will have to increase to prevent the exponentially widening budget deficit, while interest rates cannot continue to fall as they are already at zero percent. Both of these policies will serve as headwinds to the M&A industry, as low tax and interest rates have helped fuel deal making since the Great Recession. Additionally, the development of a vaccine will be closely monitored, and a full economic recovery likely depends on its creation and widespread administration. According to research performed by Mckinsey, even if a vaccine comes to fruition, the short-term economic outlook is bleak, and it may take until 2024 for some sectors to fully recover to their pre-Covid-19 GDP. Despite this unfavorable outlook, businesses that are insulated from this damage are receiving premiums from acquirers.

While M&A activity has slowed from a record high, it has not completely disappeared. In fact, a Private Equity report conducted by Bain & Company shows that deal activity has rebounded from May to June and should continue to increase. A large reason for this increase is the massive amount of cash that Private Equity firms are holding. Even though investable capital is at an all-time high, PitchBook, a financial data and software company that tracks transactions, states that there are “over 8,100 privately backed companies were approved for loans of $150,000 or more from the Paycheck Protection program.” Private Equity funds need to actively invest that cash and generate returns for their investors. They have done so through the increasing use of Add-On Acquisitions, where one of their portfolio companies strategically acquirers another company in the same industry. According to PitchBook, these types of acquisitions were responsible for over 70% of all Private Equity Buyouts in the second quarter of 2020 and will most likely continue to increase. Therefore, premiums will likely be paid to target companies, further substantiating that the time has come for business owners to strongly evaluate their options.

COVID-19 has caused severe health and economic damage, and while the pandemic refuses to come to a halt, the global battle towards normalcy continues. This has been witnessed in the United States, with many businesses experiencing drastic hiring and revenue decreases. Although the government has enacted lofty spending policies to support the economy, people need to realize that those funds need to come from higher taxation. Combined with the inability to drop interest rates further, the economy will not return to pre-Covid-19 levels for a while. The M&A market will continue to be active in the short-term, and should signal to business owners that now may be the right time to sell. So, take advantage of this window of opportunity; do not sit back, wait, and miss it. Take the first step, call us to explore your options.

Top 5 PPP Pitfalls in M&A

Wed, 02 Sep 2020 11:33:03 GMT

In March 2020, Congress passed the CARES act to provide much needed economic relief to individuals and businesses injured by the economic shutdown. For over 5.2 million US small businesses, this relief came in the form of the SBA’s $525 billion Paycheck Protection Program (PPP) which provided a critical lifeline to weather this challenging time. If not for this stimulus, many of these businesses would have been forced to close their doors and fire many (if not all) of their employees.

The necessity to deploy these funds rapidly to boost the economy combined with the intention that many of these loans, if used properly, would be forgiven, many conditions typical of business “loans” were not required. As examples, no fees were paid, no collateral or personal guarantees were required, and some documentation typically required to receive loan approvals was not used. But like all things, there were some strings attached.

In our world, one of the most significant of those strings comes into play when the company that received the PPP loan is involved in a sale. In a standard business sale, any loans on the business are typically paid off prior to or at the time of the closing. Since PPP funds are structured as loans but intended to be forgiven, selling a business that is carrying a PPP loan creates a unique set of challenges. Yet, the SBA has provided no direct guidance on how to handle the sale of a company with a PPP loan.

Here are the most important challenges and how to address them when selling a business:

Lender Consent to the Sale
The sale of a business, whether a stock sale or an asset sale, is deemed an event of default under the terms of a PPP loan. In every instance, Sellers can expect that they will need to obtain consent to the business sale from their lender. We advise that business owners and their advisors engage in dialogue with the lender early on. This will allow the lender time to obtain the necessary approvals so that the deal is not hindered.
Escrow and Indemnification
It is very likely that the lender and the buyer will require that a portion of the sale proceeds equal to the amount of the PPP loan balance be put in escrow until such time as (and to the extent that) the PPP loan is officially forgiven. Buyers will likely want broad indemnifications to protect them from any future liabilities that could arise from the PPP loan such as audit expenses, penalties, or alleged fraud.
Control Over the Forgiveness Process
After the sale, particularly if it is in the form of a stock sale, the Buyer may want to have some say in the loan forgiveness application process. On the other hand, the Seller will likely want to have full control of the process. It will be important for the Buyer and Seller to agree on who will have control over the loan forgiveness application process after the sale of the business.
Public Relations and Deal Announcements
The haste with which the PPP program was put into effect has resulted in controversy. The existence of high-profile borrowers (some of whom returned the loans), public pressure resulting in further disclosure of many of the PPP recipients, and cases of fraud have created something of a cloud over the PPP program. Although the PPP program stipulate that borrowers of less than $2 million are not required to prove their absolute need to borrow under PPP, Buyers and Sellers, concerned over public perception, may prefer to keep the deal under wraps in the near term rather than risk public misconceptions over the need for the loan.
Round 2 of PPP?
While the first round of PPP loans closed on August 8, 2020 and the measurement period for the use of those funds has passed, Congress is currently contemplating a second round of PPP loans in the HEALS Act. If a business obtains a PPP loan under the HEALS Act, and the business is sold during the measurement period, control over the use of the PPP funds will be critical. How those funds are used during the measurement period can significantly impact the forgiveness amount, Therefore, Sellers will want to retain control over spending until the end of the measurement.

The issues identified here are based on our experience in working with multiple sellers, conversations with top transactional attorneys, CPAs and other Investment Bankers, and our own research. These are but a few of the pitfalls that owners will face in the sale of their business. None of these challenges are deal breakers, but it is critical that business owners with a PPP loan who are exploring the sale of their business, avoid critical missteps. Additionally, with the SBA continually adjusting the rules and issuing updated guidance on the procedures for PPP loan forgiveness, there is an ever-changing landscape to navigate. We would be happy to have a conversation about these topics or any other issues that you might have.

Let’s talk.

Life Science Outsource Advisor - July 2020

Wed, 12 Aug 2020 14:03:20 GMT

SEA is pleased to provide our Life Science Outsource Advisor – dedicated to keeping our readers up to date on key developments in the world of mergers and acquisitions for outsource providers to the Life Sciences industry.

Executive Summary

The rise and fall (and rise) of vertical integration in Life Sciences…

Prior to the 1980s, the Life Sciences industry was dominated by large, vertically integrated pharmaceutical companies. Everything from early stage drug discovery through clinical operations to commercialization was handled in-house. Competitive pressures forced the industry to take a hard look at the inefficiencies inherent in this “one-stop-shop” approach. Many areas with variable workloads (such as clinical trials management) were outsourced to smaller specialists who could do the work better, faster, and cheaper. This pattern of outsourcing fueled itself. As big pharma reduced headcount through outsourcing, displaced employees grew the outsource industry, allowing pharma to outsource even more. The Life Science Outsource industry grew rapidly as the large biopharmaceutical companies focused on their core capabilities.

More recently, industry dynamics are forcing the outsource industry to rebuild much of what big pharma spent decades dismantling. Large biopharma companies continue to move more of their purchasing decisions to procurement departments, many of which look to reduce the number of vendors they work with. This allows them to negotiate more favorable pricing and terms by increasing the volume of work that they direct to an individual vendor. This dynamic, coupled with consolidation among many of the large Life Science companies has left the outsource providers with a need to expand their offering to meet growth objectives. This has been a primary driver of M&A activity among the big outsource providers as they look to acquire additional services to sell to their biopharma clients. Much of this has been led by the major CRO’s who are attempting to integrate vertically and become “one-stop-shops” for their biopharma clients. Sound familiar? Time will tell how long this cycle will last but growth and diversification of services through acquisition appears to be a trend we expect to continue for the foreseeable future.

Spotlight on Contract Research Organizations

Market Conditions (Source: IBISWorld)

The US CRO industry has experienced strong growth over the five years to 2019, benefiting from rapidly increasing R&D expenditures. Industry revenue grew at an annualized 6.1% to $18.4 billion during the five-year period, including growth of 3.8% in 2019. During this same period, total R&D expenditures increased at an annualized rate of approximately 3.0%. Given the increasing costs of drug development, there is high demand for the services provided by CROs. Many pharmaceutical companies have lost revenue due to patent expirations, driving them to outsource aspects of the drug development process to CROs to reduce costs. However, the industry is beginning to show signs of maturing, with industry revenue growth slowing in recent years. Over the past five years, the CRO industry’s largest players engaged in a series of consolidations and actively courted strategic partnerships with pharmaceutical companies.

Prior to the COVID-19 pandemic, IBISWorld was forecasting revenue growth for the CRO industry to slow slightly but remain relatively robust, driven by anticipated increases in industry R&D spending. Since the beginning of the pandemic, numerous clinical trials were halted or scrapped as patient engagement became impractical or dangerous and the industry’s focus shifted to finding treatments and a vaccine for COVID-19. It will be some time before any realistic forecasting can be done for the CRO industry but you can expect the focus of services and offerings to shift based on what the industry learns about attempting to manage clinical trials through a global pandemic.

According to IBISWorld, the following trends will be key dynamics impacting the CRO market:

The industry has expanded at a rapid pace by moving toward a full-service model
The growth of a few dominant operators has led to an increasing level of concentration
The biomedical field is likely to play an important role in the continued success of CROs
Strategic partnerships are expected to increase over the next five years
The push toward strategic relationships will keep industry consolidation relatively high

M&A Landscape (Source: Pitchbook data)

The US CRO M&A Landscape has been robust over the last decade with several outliers in the data worth noting:

In 2011, PPD was acquired by The Carlyle Group for $3.9B through a public-to-private LBO.
2015 saw Labcorp’s entry into the CRO market via its $6.1B acquisition of Covance.
In 2016, the $10.4B merger of Quintiles and IMS Health, Cinven’s $1.4B acquisition of Bioclinica and inVentiv Health’s sale to Advent International for $1.9B drove the market.
2017 was marked by Parexel’s $5B public to private acquisition by Pamplona Capital Management and the $4.3B merger of INC Research and Inventiv Health to form Syneos Health.
In 2019, the major deals of note were the sale of Medidata to Dassault systems for $5.6B and the $3.2B LBO of WIRB – Copernicus.

The first half of 2020, with the onset of the COVID-19 pandemic, has experienced a dramatic slowing of M&A activity for the CRO industry. While this somewhat aligns with an overall slow-down in M&A activity in the first half of 2020, the industry wide disruption in clinical trials has likely amplified the impact of the shutdown on the CRO industry. While the broader M&A market is optimistic for a strong second half of 2020, the CRO market may be slower to move until there is more clarity around restarting/resuming clinical trials.

* through June 30, 2020

Market Movers

The companies profiled below represent some of the most active Strategic Buyers in the CRO Market based on the number of acquisitions completed during the last twelve months. These are currently some of the most acquisitive companies in the CRO industry:

WIRB–Copernicus Group (WCG) offers services in the areas of clinical and human gene therapy research, laboratory bio-safety consulting, human research protections, clinical research support and online learning. WCG completed 3 acquisitions during the last twelve months including PharmaSeek in August 2019, Waife & Associates in November 2019 and Statistics Collaborative in January 2020.

ICON provides contract clinical research services to the global pharmaceutical industry and manages clinical studies in addition to providing data management, regulatory, and central laboratory services. ICON completed 2 acquisitions during the last twelve months including Symphony Clinical Research in September 2019 and Medpass International in February 2020.

Charles River Laboratories is a provider of drug discovery and development services and is the leading provider of animal models for laboratory testing. About half of the company’s revenue comes from drug discovery and preclinical testing, and one fourth comes from the manufacturing support segment. Charles River completed 3 acquisitions during the last twelve months including Hainan New Source Biotech in August 2019, PathoQuest in September 2019 and Hemacare in January 2020.

Velocity Clinical Research provides support to the pharmaceutical, biotechnology, and medical device industries in the form of research services outsourced on a contract basis. Velocity completed 4 acquisitions in the last twelve months including Rapid Medical Research in November 2019, Advanced Clinical Research in November 2019, Omega Medical Research in June 2020 and Buynak Clinical Research in June 2020.

IQVIA is the result of the 2016 merger of Quintiles and IMS Health. The CRO segment focuses primarily on providing outsourced late-stage clinical trials for pharmaceutical, device, and diagnostic firms. IQVIA has completed 7 acquisitions in the last twelve months, most notably the $200m acquisition of GCE solutions, a CRO serving the bio-metrics sector in September 2019.

About Strategic Exit Advisors

Strategic Exit Advisors is an investment bank focused on mergers and acquisitions in the Life Sciences and B-to-B Services sectors. We help CEOs with company revenues of $5 to $100 million. We the same rigorous M&A process that Fortune 500 companies enjoy to firms your size (www.se-adv.com). Let’s talk.

What’s Next for Your Business?

Wed, 29 Jul 2020 11:10:43 GMT

Many business owners are contemplating how the next few years will impact stability of revenues, profitability and their long-term financial security.

If you feel you are at a crossroads in considering what the future holds for your business, your employees and your family, then we can offer insight.

At SEA, entrepreneurs are our clients. We recognize that you have invested in your business in ways that go well beyond financial assets. Our senior bankers have decades of both operating experience and investment banking experience; and we have first-hand knowledge of what it means to help a CEO run a business. That means that we can help you navigate the potential sale or acquisition of your business, which will be one of the most important transactions of your life.

How do you protect all that you have built and optimize your exit, in current market conditions?

Now might be a good time to consider your options. Rebuild, invest your assets and time into weathering current economic conditions, or contemplate an opportunity to gain financial security by selling your business.
What are your goals for the next 5 – 10 years? Selling now can provide financial security and opportunity for you to pursue other interests, that you’ve not had the time for, with the day-to-day operations of your company. Continuing to invest in your company could mean more upside down the road. SEA can help you make your vision for the future attainable.
Valuations are critical. We thoroughly assess our clients’ businesses and promote potential vs. black and white spreadsheets. Getting your operations in order and showcasing your company culture are paramount to getting you the best outcome available.
Some industries and businesses are thriving. Strategic buyers are looking for acquisitions, and this promotes a seller’s market. The timing could be right for you to consider selling to active buyers.
You deserve the same due diligence and preparation that enabled you to establish your company and thrive. SEA brings that same mentality to every transaction. We cast a wide net when seeking potential buyers. We do our homework and rely on our past experience to navigate your opportunities.
SEA is committed to a team approach, and provides each client with two senior bankers on their deal team at all times. Our dedication is to your best interests, not just completing a transaction. Trust, collaboration and hard work are the cornerstones of our success, and ultimately your success.
Negotiations are most successful with insight, flexibility, and perseverance. SEA’s approach is to focus, prepare and find potential buyers who are aligned with the culture of your business. We believe that you are owed the time and commitment to finish strong.

Contact SEA for an assessment of your business and readiness to sell. We’ll share our analysis and guide you through your options. Challenging times can present opportunities. Let us help you get what you deserve for your business. This could be the right time for action.

Fact or Myth: Deals can Still be Done in a Pandemic

Mon, 13 Jul 2020 10:28:21 GMT

The first quarter of 2020 got off to a great start for many companies. But in March, businesses around the globe were delivered a blow to the gut. This is not the first time in history we’ve experienced an economic downturn, and it certainly won’t be the last! No one is immune from a sudden economic downturn like we have weathered. Without recent pandemic history, no one really knows what 2020, 2021, and beyond holds.

While many business owners were forced to deal with business survival, obtaining financing, or understanding the ‘new normal,’ others were in the thick of selling their company. Faced with the tremendous uncertainty of a few months ago, all non-essential businesses were closed. The unprecedented uncertainty demanded patience, perseverance and a bit of tenacity to navigate through.

Through our lens, we have seen some prospective clients disappear as a result of the pandemic; others have successfully mitigated through the disruption. While some have experienced a significant drop in sales, others have maintained sales levels, albeit selling lower margin products or services. In fact, some have experienced growth and expect 2020 to be better than 2019 results.

For many businesses, short-term liquidity became an immediate obstacle. With the advent of the SBA’s PPP loan program, businesses that received funding survived the downturn as the business adjusted staffing levels to support a reduction in operations.

SEA was in the middle of the storm with several clients and has successfully migrated through. While no one has all the answers, we wanted to share what we’ve learned from being on the front lines.

After approximately six weeks of a ‘cooling off’ period following the national emergency shut-down, companies pivoted to new operating guidelines and new M&A activity virtually disappeared. Unless the company was deep in the process, deals were put on hold while certainty began to return. As restrictions eased and some of the uncertainty began to abate, transaction activity began to return. Interest in opportunities has remained strong following the same ‘cooling off’ period.
Valuation expectations have been minimally impacted as earnings have temporarily been affected. ¹ Despite the impacts to earning, overall valuations remain healthy. According to Axial’s survey of deal professionals, “many deal professionals have decided that valuations may remain somewhat unchanged.” ² How long will a negatively-effected business remain is truly an unknown. Some buyers require increased certainty of the effects of the pandemic on the long-term economy, while others continue to press ahead, anxious to ‘get the deal done.’
Deal structures have been affected by the uncertainty. With the historical tightening of credit in past economic disruptions, there remains concerns over current credit tightening. Although we have not witnessed it just yet, we’ve heard credit tightening is beginning to happen and is expected to continue until there is greater economic certainty. While valuations have been minimally affected, deal structures have changed from the first quarter of 2020. Structures today have a greater focus on preservation of cash in case of future uncertainty or should the COVID virus return. Long-term liquidity continues to be more uncertain and how traditional lenders will react this time remains uncertain. If credit tightening continues unabated, we expect the market will develop alternative financing for successfully repositioned companies. And in some cases, we expect the PPP forgiveness should help 2020’s profitability for well-managed companies.

In summary, deals continue to get through to closing. According to Axial, ‘While much of the market was forced to push pause in Q2, it has created a lot of potential for the remainder of the year. There is still an abundance of dry powder that needs to be deployed.’ ²

If you would like to learn more about the current market conditions, please connect with a Managing Director.

1 How COVID related costs/earnings decline is handled in recasting is a topic we’ve discussed here.

2 The Path Forward: Ten Takeaways from Q2, Kristina Payne, June 18, 2020

Strategic Exit Advisors Adds Tony Parisi to Its Investment Banking Team

Mon, 29 Jun 2020 05:15:12 GMT

Doylestown, PA – Strategic Exit Advisors (SEA), an investment bank specializing in mergers, acquisitions and other strategic advisory services for middle market business owners, is pleased to announce that Tony Parisi has joined as a Managing Director.

“We serve our clients by providing advisory services grounded in extensive transactional and operational experience, which makes Tony a great addition to our firm,” said Curt Cyliax, Co-Founder and Managing Director of SEA.

Tony will be part of the SEA client deal team and will use his extensive experience in transactions and financial operations to maximize value for SEA’s clients.

“I have joined SEA in order to help entrepreneurs optimize the value of their life’s work,” reflected Tony.

“SEA is continuing to serve our entrepreneur clients, creating opportunities and managing risk, during this unprecedented market, even as we add top talent to our team,” commented Rob Waring, also a Managing Director of SEA.

Tony brings 30 years of serving clients in a diversity of industries, including technology, cable/telecom, manufacturing, construction and renewable energy. He also joins SEA with corporate experience as a CFO and Treasurer, as well as extensive background in commercial banking. Tony is a graduate of Brown University.

Strategic Exit Advisors Adds Three Summer Interns to its Roster

Tue, 23 Jun 2020 06:12:50 GMT

Doylestown, PA – June 23, 2020. Strategic Exit Advisors (SEA) is pleased to announce the hiring of three summer interns.

“The opportunities afforded these young adults is invaluable,” says Bob Cahill, Managing Director of SEA. “We provide them with real-life scenarios of the investment banking industry … something these students would not be exposed to in the classroom or a larger banking institution.”

SEA Class of 2020

Chad Pingatore

Amy Sun

Mike Ufberg

“We believe it’s important to offer opportunities to our future leaders, which is why we invite interns to join our team each summer. I’m especially excited about this year’s class, as they are an enthusiastic, energetic and intelligent group of young adults,” states Curt Cyliax, Managing Director of SEA.

 Learn more about our 2020 Summer Interns.

The Rising Role of Family Offices in the Private Market M&A

Mon, 18 May 2020 13:21:59 GMT

Businesses and private equity funds have long dominated the mergers & acquisitions (M&A) world. Recently, however, a new player is emerging in a big way — the Family Office. When a family builds significant wealth, whether through a family-owned business or a successful corporate career, they often establish a Family Office to manage this wealth. A Family Office functions as an operating organization for a family’s assets, offering more privacy and personalized service than most traditional wealth managers. The Office will often manage the family’s financial and legal operations and build an investment team to preserve and grow the family’s substantial wealth for generations to come. The Family Office works closely with the family when making investment decisions and is often headed by a member of the family. Ernst & Young estimates that there are “at least 10,000 single-family offices” around the world that manage over $4 trillion of investable assets.

Family Offices have almost always participated as investors in the private market through venture capital and private equity funds as Limited Partners. However, in recent years, Family Offices have been investing in the private market more independently. Instead of relying solely on investment funds to put their money to work in the private market, they’ve been investing in private companies directly. Over 60 percent of Family Offices with private equity investments have a portion of them in private assets. The families behind Family Offices often have valuable operating business expertise, so this trend makes a lot of sense. The same knowledge that allowed them to build their fortune through their family ventures will enable them to capitalize on opportunities in the private market today. This is a realization that many families and their Family Offices are having, and it’s making them pull out their checkbooks. Angelo Robes, Founder and CEO of the Family Office Association notes, “We’re seeing direct investing playing a larger and larger role in the portfolios of a growing number of single-family offices. Looking worldwide, all indications are that single-family offices are pouring billions upon billions of dollars into buying privately held businesses.”

What does this mean for business owners? Well, it means that when an entrepreneur decides the time is right to exit their business, Family Offices should be on their prospective buyer list. More than that, though, it means that they need to consider whether a Family Office’s investing style is a match for the objectives and goals for themselves and their business. Family Offices tend to prefer investing in companies for which they can play a proactive and involved role. Sixty-four percent of Family offices cited “level of control” as one of the most important factors they consider when investing in a private company. This is great for entrepreneurs looking to exit their venture and owners who’d like to take a step back from the operations of their firm. On the other hand, business-operators looking for just a bit of growth capital might find that their goals don’t align well with those of some Family Offices. Family Offices, unlike many other private equity investors, are often long-term in their investment horizon. “As patient capital providers, family offices are content to hold investments that are performing well, while looking beyond short-term fluctuations.” This means that after business-owners sell their company, they’ll make decisions with the best intentions for sustaining the firm for the long-run, which provides some peace of mind for business owners who worry about their company being “stripped and flipped” or their employees losing their jobs.

Finding the right buyer for a business is just as much about the cultural and strategic fit as it is about the numbers. Irwin Latner, a partner in the Corporate and Securities Practice Group of Pepper Hamilton LLP, points out that, when it comes to Family Offices, “these are really operating guys, not financial market investors. They want to own companies and build companies again.” When it comes time to step away from the company that they’ve spent so many years building, many business owners want to ensure they pass it on to capable and caring hands. Family offices have the right intentions and deep experience to take on that challenge, making them an excellent option for many business owners to consider when they’re ready to divest their company. Because of this, your investment bank should consider Family Offices among their buyer-set when marketing your company. A skilled investment bank will have access to resources allowing them to evaluate Family Offices and other buyers not just by size requirements but by industry focus and expertise, ensuring that your business ends up in capable hands with people who know the worth of what you’ve built.

¹ Shell, Adam. “Rising Rich Boost Stature, Growth of Family Offices.” InvestmentNews, 12 Apr. 2019, www.investmentnews.com/article/20190412/FREE/190419974/rising-rich-boost-stature-growth-of-family-offices.

² UBS, and Campden Wealth. UBS Global Family Office Report 2018. Campden Wealth Limited, 2018, UBS Global Family Office Report 2018.

³ Prince, Russ Alan. “Global Single-Family Offices Are Buying Up Companies Throughout The World.” Forbes, Forbes Magazine, 6 Sept. 2018, www.forbes.com/sites/russalanprince/2018/09/05/global-single-family-offices-are-buying-up-companies-throughout-the-world/#2d1ebd2c171b.

⁴ UBS & Campden Wealth, 2018

⁵ “How Family Offices Are Investing Directly in Businesses.” Point Of View, 4 Aug. 2017, www.raymondjames.com/pointofview/how-family-offices-are-investing-directly-in-businesses.

⁶ Latner, Irwin M., and Stephanie Pindyck-Costantino. “Family Offices Direct Their Own Private Equity Investments.” Lexology, 29 Oct. 2015, www.lexology.com/library/detail.aspx?g=66d6ad69-e79e-4377-b9c8-a7c3ba396ab7.

SEA Helps Nooney Controls Acquire a Growth-oriented Partner, Assists the RI-based Company in Selling to a Strategic Buyer

Wed, 22 Apr 2020 09:39:24 GMT

Doylestown, PA: Strategic Exit Advisors (SEA) today announced that its client, Nooney Controls Corporation (Nooney), was successfully sold to a strategic buyer. SEA acted as the exclusive financial advisor to Nooney throughout the process, providing investment banking services for a sell-side M&A transaction.

“We are pleased with an extremely thorough process that helped us identify a number of potential partners and ultimately led us to a firm that will allow us to increase growth in our domestic and international footprints,” says Jim Nooney, President and CEO of Nooney.

Using the same investment banking process employed for large national and international companies, SEA provided a structured approach that helped close the deal on time. “The outcome of the transaction highlighted our preparation, focus, and teamwork, as we executed within our agreed upon timetable,” said Curt Cyliax, Managing Director, who led the deal for SEA. “With the help of Rob Waring and Bob Cahill, SEA delivered on our commitment to Jim Nooney, Nooney Controls, and its employees.” This sentiment is echoed by Jim Nooney: “I commend SEA’s hard work in leading the process to a successful outcome and ensuring a well-run deal. Their counsel and assistance in articulating our value proposition and guiding us through due diligence was invaluable.”

About Nooney Controls Corporation: Established in 1982, and headquartered in North Kingstown, RI, Nooney specializes in the integration of high-quality, customized valve automation systems for the Power Gen, Bulk Gas, and other industries. The systems are engineered and built to withstand extreme operating conditions at the clients’ sites. www.nooneycontrols.com

Beware of Knights on White Horses

Wed, 08 Apr 2020 07:11:22 GMT

The last several years have been very good to business sellers. Private Equity Groups raised record amounts of capital, Strategic Buyers amassed cash on their balance sheets, credit markets loosened, and interest rates held at historic lows. Buyers had a tremendous amount of capital at their disposal for acquisitions. Combined with the longest bull market in history, record low unemployment and strong consumer confidence, this created a highly-competitive environment among buyers looking to acquire strong performing companies. This competition led to record setting valuation multiples for business sellers along with significant frustration for many buyers struggling to compete on price and terms.

All of this changed in March 2020. The global COVID-19 pandemic led to the end of the 11-year bull market on Wall Street, a global economic shutdown, and unprecedented levels of uncertainty. Much of the M&A market has hit the “pause” button during this crisis, waiting until there is visibility over what our new normal looks like. However, out of crisis can come opportunity, depending on who you are. At times of sudden uncertainty, buyers will tend to fall into one of 3 camps:

Those who put their pencils down on all M&A activity and focus their resources on protecting what they have
Those who will slow and proceed with caution on M&A activity but who won’t make any commitments until conditions stabilize
Those who are pressing forward and actively seeking acquisitions during this time

That last group tends to see times like this as a time of opportunity. A sudden shift in the markets as we are experiencing now creates significant uncertainty and, since most other buyers are pulling out of the market, the level of competition that active buyers will face will be significantly reduced. There will be many companies that, although operationally healthy, are not capitalized well enough to weather the sudden economic downturn. Business owners’ feelings of fear and uncertainty may very well lead to rash decision making.

We anticipate that during this time of crisis, many buyers will be actively approaching business owners. While a buyer who comes knocking on the door may seem like a godsend, it’s important that the owner recognize this outreach for what it is, a buyer looking for a good deal. There is nothing inherently wrong with this but it’s critical to approach these situations with as much information and leverage as possible in order to maximize a lifetime of hard work.

This is why SEA introduced our Outsourced M&A process five years ago. All too often, we learned of business owners that had been approached by a “prospective buyer,” only to be left at the altar time and time again. When an opportunity seems too good to be true, it almost always is. Consider the following example. Believe it or not, it’s a true story:

A competitor contacts a business owner saying that he is interested in buying the business. Both parties agree on a price, with the stipulation that the buyer works in the business to get to know it better before closing. The Seller agrees since the deal seems attractive on the surface and the Buyer is an industry insider. The Buyer works the business for a period time as a consultant to “get to know the business.” Subsequently, the Buyer approaches the owner about a reduced price while alienating the work force. The Owner does not agree to the reduced price, Buyer walks away, sues for the ‘consulting’ time, agitates the workforce, and puts the ‘word on the street’ that the business is faltering. The owner is left to pick up the pieces and try to rebuild the business.

SEA can help business owners understand their alternatives, evaluate any unsolicited offers they receive, develop and orchestrate the delivery of any confidential materials to potential suitors, and potentially bring additional buyers into a rapid, competitive process designed to give the business owner options and perspective. Most importantly, we bring a process which helps the Seller to retain control and leverage during the negotiations. “The one who controls the process has the leverage.”

If you have received an unsolicited offer or been approached by an interested buyer, please connect with an SEA Managing Director to understand how to evaluate your options and see if we might be able to help. We know what you’ve been through to build your Company, our job is to make sure you get paid for it.

Thinking Ahead in a Time of Crisis – You Won’t Get This Chance Back

Fri, 27 Mar 2020 13:16:06 GMT

Dear friends,

First and foremost, we hope this finds you and those you love healthy. This is an unprecedented time for all of us, and it is during times like this that it can be very difficult to think ahead into the future. Although we do not know how long this will last and how long it will take us to recover, we do know that one-day things will return to a new “normal.” When that time comes, we don’t want anyone to look back and say, “if only.”

As investment bankers, one of the things that we help our prospects and clients do is to develop a “normalized” presentation of the historical earnings of the business. This entails quantifying and adjusting the company’s historical earnings for any anomalies and non-recurring items so that buyers have a clear perspective of the Company’s ability to generate profitability in the future. We anticipate that, for at least the next several years, we will be working with prospects and clients to quantify the financial impact of the COVID-19 pandemic in order to isolate the impact on their recast historical earnings. The more detailed the data that quantifies that impact, the more credible that adjustment will be to future buyers of the business.

We are strongly encouraging business owners to capture now, in real time, as many of the details as possible about the impact of COVID-19 on the financial performance of their business. Talk to your CPA to see if it makes sense to set up distinct accounts to keep track of expenses and capital expenditures associated with the pandemic. Many of those items would include:

Incremental Expenses – Any expenses that your incurring as a business today that you would not have otherwise incurred were it not for COVID-19. This might include video conference services, legal fees to receive counsel re: HR issues, technology, sanitation costs, etc.
Capital Expenditures – Have you had to make any investments in assets that you would not have made if it were not for COVID-19 such as laptops for remote workers, video conference equipment, etc.?
Loss of productivity – Try to capture any costs that you are incurring that are not generating any sort of return for the company such as paying employees with no work, loss of deposits for travel, conferences, vendor and supplier issues that impact company productivity, etc.
Loss of Revenue – While this may be more difficult to quantify for some, try to document cancelled orders/projects or any other data that can help you to later quantify lost revenue such as stalled pipeline or prospects who no longer have budget to buy your products or services.

It’s hard to predict how valuable having this information will prove, but you can be certain that trying to recreate all of it in the future will be difficult or near impossible . Beyond “normalizing” your company’s historical financial performance for buyers, this data may also be needed to support future insurance claims, apply for government assistance programs, to support tax deductions, etc. And, collecting data for analysis and decision-making is a proactive step you can take in this uncertain time.

Again, we know that during times of crisis it can be difficult to think too far ahead. So, we encourage you to focus on real time activity that you can do now, to help your business in the future. You do not want to say, in the future “if only…”.

If you have any questions, please don’t hesitate to reach out. We are here to be a resource to you , to help you now and in the months ahead.

Please stay safe and healthy,

Your friends at SEA

Should You Sell Your Business to a Strategic or Financial Buyer?

Thu, 30 Jan 2020 13:48:57 GMT

In general, there are two types of buyers in a business sale: strategic and financial. Because the buyer types’ strategic objectives, financial goals and cultural fits with organizations differ, it is critical to understand which buyers best suit for your business sale goals.

The Two Types of Buyers

Strategic buyers are companies that want to acquire your business to meet their business needs. They may be interested in entering new geographic markets, eliminating competition, improving their supply chain, or addressing weaknesses in other business areas. They acquire your business to supplement and enhance their current operations.

Financial buyers are investors seeking to acquire your business to generate a return on investment. These investors typically look to purchase your business, operate it for a period, and then “exit” their investment by selling your business for a profit.

Financial Buyers Enter the Lower Middle Market

Historically, financial buyers have focused their investment strategies on large corporations. However, increased competition in that space has driven financial buyer activity to the lower middle market (LMM), causing a surge in demand for businesses with values from $5 to 50 million. Over the past three years in this market, financial buyers have executed an average of over 800 transactions per year at a cumulative value of over $50 billion.

The sheer size of the LMM, which consists of more than 175,000 businesses, and that sellers are mostly event-driven (wanting to retire, liquidity needs, etc.) creates an ideal market for financial buyers to purchase strong, well-run companies.

So which type of buyer is right for you?

Understanding the different strategies of financial and strategic buyers is essential when determining which buyer type best meets your goals.

Cultural Fit
Strategic buyers have a history in the industry, so they understand its challenges and opportunities. Because strategic buyers have similar knowledge and experience to the sellers, the parties tend to establish a stronger connection than with financial investors. This common understanding fosters a friendly environment where you can share past experiences and plans on an emotional level.

On the other hand, financial buyers may not completely understand the industry, but if their financial model suggests they can generate their targeted returns, they are interested. Since financial buyers are often more focused on the financials than the operations, sellers may not feel an emotional connection with them. After all, you will feel differently about a buyer who spews numbers and percentages than one who connects with you on a more personal level.

Since financial buyers do not typically have the management expertise to operate the company, they tend to retain most if not all of the employees to execute the company’s operations. Financial buyers often elect for the seller to remain in a management role to continue to run the business efficiently. In this scenario, part of the deal compensation is typically tied to meeting specific goals, called an earn-out. Strategic buyers may be less likely to retain all of the personnel because they do not wish to duplicate roles in areas such as accounting, sales, and others. Since a strategic buyer may already have employees performing these functions, they can realize value by eliminating the associated costs of those in overlapping roles, which can mean layoffs.

Financial Incentives
Strategic buyers are often willing to pay more for your company due to the value-add opportunities created by combining the companies. The more value a strategic buyer believes your company brings to the table, the more they are willing to pay to achieve it. For example, if a strategic buyer believes that your company will help it capture market share in a new region, it will be willing to pay up for that value-creation.

Financial buyers typically pay less for your company because they are interested only in the company’s earnings and not the value derived from combining two companies. Since they are looking to achieve the highest return on investment, they attempt to do so by purchasing at the lowest price possible.

There isn’t necessarily a “right” or “wrong” type of buyer since it depends heavily on the seller’s goals for the sale. Do you want to maximize value? Do you want to take chips off of the table but continue to work in the business? To answer such questions similar and to satisfy your goals, it is important to consult with your investment banker who can match you with the right buyer for your business.

Press Release - Strategic Exit Advisors announces that its Client, Primetac Corporation, has been Acquired by Akoya Capital Partners and Tecum Capital Partners

Tue, 08 Oct 2019 09:50:19 GMT

Doylestown, PA – August 31, 2019. Strategic Exit Advisors (“SEA”) today announced that its client, Primetac Corporation (“Primetac”, or the “Company”) has been acquired by Akoya Capital Partners, LLC (“Akoya”) and Tecum Capital Partners (“Tecum”) in partnership with the founders and management team. SEA acted as the exclusive financial advisor to Primetac.

“We were very pleased with SEA’s extremely thorough process that ultimately identified such a strong partner for Primetac. Akoya’s strong business acumen, industry knowledge and culture makes them the ideal business partner to help Primetac realize its next phase of growth.” said Peter Feniello, CEO of Primetac. “I could not be happier with SEA’s guidance, as well as the final outcome. Their counsel and assistance in articulating our value proposition and how they dealt with challenges throughout the process was invaluable to us.”

Dave Burger, Managing Director at Akoya, commented, “We are excited to be partnering with the Feniellos to help them achieve the vision of making Primetac a much larger and stronger national supplier of packaging tapes and related products. They have built Primetac into a profitable, well-respected company that offers high quality products delivered expediently to packaging distributors. We plan to build on this solid foundation with investments to increase sales coverage as well as expand service and product offerings. In addition, we see several acquisition opportunities to accelerate growth and add new capabilities.”

About Primetac Corporation Founded in 1992 by Peter Feniello and Ferdinand Lutz and headquartered in Little Ferry, NJ, Primetac is a leading distributor of industrial packaging materials including acrylic, hot melt and natural rubber carton sealing tapes, converted stretch films, strapping tapes, masking tapes, and other related products. For information please visit www.primetac.com .

About Strategic Exit Advisors Strategic Exit Advisors (SEA) is a boutique Investment Bank located outside of Philadelphia, PA. Since 1998, the principals of SEA have advised owners of privately held businesses in the middle market on how to prepare for and execute the successful sale of their businesses, primarily in business-to-business and pharma services markets. For more information, please visit www.se-adv.com or call 215- 489-8881.

Five Things You NEED TO KNOW Before Buying a Company

Thu, 13 Jun 2019 07:44:00 GMT

Buying a business can be intimidating. After all, you need to make many decisions, without having all the necessary information up front. We have broken down the top five things you need to know to ensure you make the most profitable and wise choices.

1. Why Building Rapport Is So Important

For entrepreneurs, selling their business evokes similar emotions to sending their first child off to kindergarten — the worry, the doubt, and the excitement. Just as representatives from a school try to develop a trusting relationship with parents to make them feel comfortable, prospective business buyers should try to build rapport with a seller.

Building rapport requires sympathy, empathy and a willingness to listen to the seller. It’s a two-way street. As a buyer, there’s a lot you can learn by listening to a business owner who knows far more about their operations than you do. For the seller, it’s rewarding to have someone listen to them and learn about the company into which they’ve invested so much of their energy. After their years of anguishing over the business, the people, and the government regulations, it’s a priority to feel comfortable that the buyer will continue the legacy of their business.

2. Have an Excellent Team Ready to Go

There’s no bench in a successful M&A team; everyone is a field player. It’s an all-in decision that requires a group of skilled professionals.

The assemblage starts with an M&A financial advisor who ensures that you are prepared, polished, and confident for every meeting and phone call. Maximize the value your financial advisors can provide by keeping them in the loop on all updates. Remember, no detail is too minor for them.

Your next two field players are your lenders and attorneys. If you develop these two relationships successfully, you will not need to worry about financial and legal concerns because they will take care of them. After all, there is no need to add unnecessary stress. Also, as you get closer to the close date, make sure you don’t leave your due diligence professionals behind.

Hopefully, they’re just the clean-up crew, ensuring that you will not discover any surprises buried in the company.

3. The Intangible X Factor

The Intangible X Factor is the hardest, yet most satisfying aspect of buying a business. Entrepreneurs recognize that the intangibles are what separates a good deal from a great deal.

Many times, business owners have one goal in mind: growth. This is where advisors caution business owners not to settle for a expansion deal that’s just good enough. Instead, see how many avenues for growth you can line up in just one move. It is essential to have four to five different potential directions for an acquisition. If you can get two to three good leads and begin evolving in a couple of sectors with just one company purchase, it is a superb deal. At the same time, it’s important not to spread yourself too thinly. So be on your game and trust your instincts, but keep your eyes open for a bonus sector that offers opportunity.

4. Cultural Fit

Although no two businesses are cultural twins, it’s critical to identify the company culture before going too far down the path to a deal. Social media may provide a glimpse into the culture, but successful entrepreneurs insist that walking through the business and observing behaviors will tell you a lot more about the culture of the company in action.

Also, outreach to suppliers and customers gives insight into how the company’s culture manifests itself outside the company walls. These contacts know first-hand what it’s like to work with your potential seller. Once you have evaluated their company culture, it’s time to dive into the financials.

5. Planning Integration

It’s never too early to start planning for combining duplicate sets of everything existing in the two companies. Plan and prioritize the business integration process from the due diligence phase to pre-closing, day one, month one, and first quarter. It’s better to be over-prepared than to be caught flat-footed when the deal finally consummates.

Start by deciding the results you want to see. Then, enforce forward thinking by delineating the benchmarks you hope to reach and defining measurable goals. Deciding on measures for tracking success is a lengthy, complicated process. So begin early and try to anticipate everything.

A vital step in the integration process is to gather all new and old employees in a comfortable setting to introduce everyone to the future of the company. As the buyer, this is your chance to acquaint your new team with your methods and your company vision.

Entrepreneurs confirm that a systematic and positive approach to buy-side transactions is what creates successful growth through acquisition. So incorporating these lessons into your acquisition will help to ensure a smooth, successful transition.

Integration Planning for an Acquisition

Thu, 02 May 2019 03:11:04 GMT

Integration Planning

Integration in an M&A deal refers to the adoption of one culture, one set of processes, and one long-term goal for two previously individual firms. Key aspects of integration are culture, management, talent acquisition, and goal setting.

According to McKinsey, successful integration can increase total deal value by as much as 6-12%. Despite the potential value added, integration planning is often forgotten or ignored for much of the M&A process. It normally surfaces in late stages of a negotiation and becomes a key roadblock at the end of the due diligence process. The important question that integration planning seeks to answer is, ‘what’s next?’ The deal is done, papers are signed, but how does this new business operate and what are the drivers of its success? Research from top industry experts argue that integration planning should be a part of the due diligence phase of M&A transactions. By assembling an integration planning team, the acquiring firm can better forecast the success of the deal.

Integration planning can seem tedious and potentially unnecessary, but business owners who are serious about an acquisition must devote valuable resources to ensuring a cohesive transition of power. According to Deloitte, one way to start the process is to make Readiness Check-Points (RCPs). RCPs are crafted during the due diligence process and are focused on setting measurable goals and timelines that serve as a checklist for long-term growth. With this focus in mind, the new management team can start day one with a vision that can drive success.

Integration planning is especially important from the perspective of the acquired firm’s employees. Although the business owner has had months and possibly years to complete due diligence, the employees are caught unaware. The owner comes in and declares that the company has been sold and there is new leadership. This causes fear and worry in the minds of employees, which is why it is critical to be prepared from the beginning to provide strategic guidance. John Lawlor, a business owner in the Mid-Atlantic area who has done nine acquisitions over the last fifteen years, shares an example of a failed integration.

He tells the story of his first post-close introduction meeting where the employees staged a walk-out. He sat there on stage and wondered where things went wrong. He even contemplated the process of getting a refund. Fortunately for John, the employees slowly trickled back and he was able to complete the onboarding process. However, he learned a valuable lesson for future acquisitions – a strategic focus on a smooth transition day one is vital to long-term success.

Meeting with key employees and making sure the existing ownership is turning over the reins with a stable workforce in place sound like obvious steps to take, but they are often neglected until the last minute. Days before close is not the time to take a walk through the new facility and start thinking about integration. It needs to start from the first interaction then be formalized during due diligence.

Integration planning is an integral part of any successful merger, but in order to increase the success of M&A, it needs to be taken seriously early in the deal. It is not a cost center. In fact, it will provide a more in-depth and accurate forecast of the value of the merged firm and will show the new workforce that they are joining a focused organization that has plans for their future. There are no refunds in the world of M&A. If a company fails to plan for integration, it is their burden to bear. Don’t get caught unprepared. Allow financial services companies to work out the details and nitty gritty of the due diligence phase and focus on crafting a plan to lead the new organization day one.

How Much Working Capital Should Be Included?

Thu, 14 Mar 2019 03:25:37 GMT

Tackling the Working Capital Calculation for M&A Transactions

Working capital, defined as current assets minus current liabilities, helps to reveal a company’s financial health. If working capital is high, there is lots of gas in the tank, and the business can run smoothly. If, on the other hand, working capital is low, the tank is running dry and it may be a choppy ride. Buyers will need to infuse it with additional capital to shift it into gear and drive toward their goals.

Thus, although “working capital” may sound like accounting jargon that many would prefer to ignore, it is a critical aspect of every merger and acquisition (M&A) deal. Including it in the value of a company can make the difference of hundreds or even millions of dollars at closing, so it’s an essential part of buy-sell negotiations. Despite its importance, discussion about working capital often surfaces toward the end of a transaction process.

While it may seem that analyzing financial statements would naturally produce a mutually agreed-upon company value, deal history shows it’s almost always necessary to negotiate working capital. Agreeing on how to calculate it and how much the buyers need to operate the company is complex. To add to the challenge, the number does not remain static. It is a moving target from when the letter of intent is sent right up to a closed deal. The following provides a general understanding of working capital designed to help the seller’s deal negotiating team maximize value.

Calculating Working Capital

We are focusing on the cash-free, debt-free definition of working capital, which parties use for most private market deals. This characterization is applicable when the seller agrees to extract excess cash and pay off outstanding debt before consummating the transaction. By focusing on a cash-free, debt-free deal, we can simplify the process of identifying current assets and liabilities on a Trial Balance or Balance Sheet. That’s because it limits the number of terms people need to learn to understand the components of working capital.

Below are the terms to look for in financial statements. They will help those involved in an M&A transaction to set a target number for working capital during negotiations.

The Plus Side: Current Assets

Current assets are those that businesses can easily convert into cash or value within a year, such as money due from customers. It also includes production components (raw materials, work in process and finished goods) and expenses paid ahead of time.
Key accounts to look for on financial statements include uncollected revenues (accounts receivable), services already paid for but not yet consumed (prepaid expenses), inventory, and income earned but not billed (costs and estimated earnings in excess of billings).

When customers pay their bills, receivables become cash. Inventory will turn into sales. Prepaid expenses, such as prepaid rent on a warehouse, mean you won’t have to pay for the rent sometime in the next year. Because these components represent future cash flows or provide value without requiring expenditures, it’s important to be aware of them when considering a company’s value.

The Minus Side: Current Liabilities

Current liabilities represent money the business owes and needs to pay out over the next year. The main components of this category include money owed to suppliers (accounts payable), income received but not yet earned (deferred revenue), recognition of expenses not yet paid (accrued expenses) and billings for work not yet completed on contracts (billings in excess of costs and earnings).

The Final Equation

While it’s better to leave the specific inputs to accountants and investment banking professionals, the working capital equation
is relatively simple:

Working Capital = Current Assets (accounts receivable, prepaid expenses inventory and costs and estimated earnings in excess of billings) – Current Liabilities (accounts payable, deferred revenue, accrued expenses and billings in excess of costs and earnings)

Working capital is a zero-sum game: sellers want to reflect the lowest possible value while buyers want to establish the highest value. Since savvy buyers will scrutinize the inputs to this equation, business owners preparing to sell their companies need to understand them fully. It will help them place a fair value on the value of their company’s working capital and can have a significant positive impact on the final deal.

Why Communication is King During the M&A Process

Fri, 25 Jan 2019 10:22:01 GMT

The merger or acquisition process can be tumultuous. Entrepreneurs must balance the financial aspects of a merger and acquisitions (M&A) with the legal and operational tasks of selling a company, all while continuing to run their businesses. This juggling act places heavy burdens on business owners. Consequently, valuable employees who are integral to the business and the success of a sale are often overlooked during the M&A process.

The Pitfalls of Employee Communications

If communication with employees is not managed properly during an M&A process, it can lead to employee backlash and attrition. This can be detrimental to the ongoing company operations and possibly put the entire transaction at risk.1 Thus, owners must make a critical decision during the sale of their company — how to break the news to their employees. How much should they disclose? Who should they tell? When is the right time to reveal the news?

There are no guarantees in an M&A. It’s a sensitive process with many moving parts and constantly-changing information. That’s why it’s important to be careful about disclosing too much in the early stages of a transaction. Sharing information with employees that isn’t set in stone could lead to false alarms. It might even jeopardize a deal that hasn’t been finalized. On the other hand, too little information can be equally as dangerous. That’s particularly true in small businesses where employees have been with the company for its entire lifespan and have a level of trust in the owner. They are perceptive to changes in the owners’ behavior, and likely can tell if they are withholding information. In such situations, lack of communication breeds rumors and distrust, potentially harming ongoing operations.

Entrepreneurs should respect their relationships with employees and keep them in the loop as the company approaches a sale. If employees hear news of a sale through a customer or a blog, they will not only be shocked but also feel a lack of respect. For this reason, business owners should first break all new developments internally, but only when they are certain of the information’s veracity and permanence.

Once business leaders have informed employees about the possibility of a sale, a host of other challenging problems may crop up. According to Deloitte, employees whose jobs are at stake may exhibit anxiety, lower productivity, and absenteeism.2 Associates who know they will no longer have jobs may lose their motivation to work. Even those who have been tapped to continue working for the buyer can suffer emotional impacts. They may grieve their coworkers who will not be a part of the company’s future and feel anxiety about the change, their new roles and the potential of heavier workloads.

Owners must acknowledge what both groups of employees are feeling and give them time to move on. Regardless of whether “move on” means working for the buyer or transitioning to a role outside of the company, all associates should be able to air their concerns and have them addressed.

Thus, open and honest communication is the most important part of managing employees during M&A. It is, however, challenging because there is a fine line owners must straddle between too much disclosure and excessive secrecy. Revealing large amounts of information can overwhelm and scare employees and harm day-to-day operations. At the same time, keeping knowledge secret for too long can pose an ethical dilemma. Owners risk that employees feel they are hiding the truth.

Walking the Tightrope with Confidence

Given the risks involved in walking this tightrope, it’s crucial for owners to establish a communication plan long before a sale. Above all, they should be sensitive to how they communicate with employees. In many transactions, owners dump the information on the employees of the acquired company all at once and leave them to make sense of it on their own. Instead, owners should communicate with employees in-person in a structured and thorough way. That includes explaining the rationale for a sale, the benefits to the company’s customers, and how it will impact different groups of employees. For questions to which owners do not have answers, they should set up methods to obtain that information from the buyer. Owners should also address individual employees’ concerns privately, follow up with periodic updates on the status of the sale, and generally remain visible.

A company cannot afford to ignore its employees during a sale of the business. After all, they are often its most valuable assets. Owners who communicate openly and effectively with their employees throughout the entire sales process are poised to come out on the other side of the transaction with less stress, more satisfied buyers, and, most importantly, happier employees.

1 Mark Swartz, Monster, Prepare Your Staff for a Merger or Acquisition

2 Deloitte, Retention After a Merger

Are You Emotionally Prepared to Sell Your Business?

Wed, 21 Nov 2018 07:17:28 GMT

Entrepreneurs devote countless hours to building their companies from the ground up and perfecting their product offering. After years of commitment and riding the emotional highs and lows of business ownership, they may be ready for a lifestyle change. Often they seek to spend more time with their families and friends and to explore other interests. Some want to retire and live off of the proceeds from selling their business. If they are financially ready and their business is running well, this can be an excellent decision.

While business owners generally understand that selling their business is one of the most significant events in their lives, many overlook the emotional toll it can take. In numerous transactions, the emotional side of selling is as challenging as the financial and legal aspects, if not more so. After all, the company that an entrepreneur builds from scratch often becomes an integral part of them. Saying goodbye to it can be almost unthinkable. Entrepreneurs have a tough time stomaching it when new owners make operational changes. Also, for those who are accustomed to being in charge and who continue to work for the company, it can be difficult to answer to the new owners. So business owners who are preparing to sell their companies must ready themselves to deal with the possible emotional consequences.

5 Actions to Create Emotional Readiness

Business owners can take five actions to prepare for and mitigate the emotional effects of selling their companies. According to Inc. Magazine, the first and most important action is to develop a comprehensive exit plan and transition strategy years in advance of a potential sale. ¹ That’s because the tough financial and legal hurdles of negotiating a deal can compound other emotional stressors. A thorough plan can help entrepreneurs keep the technical side of the sale under control, thus freeing up time and energy to manage their emotions.

The next two actions work best in conjunction. These include analyzing the role the company plays in the entrepreneur’s identity and developing interests and hobbies outside of the business. Many entrepreneurs’ identities are deeply intertwined with their status as a business owner. When owners recognize what their companies mean to their sense of self, it becomes easier to extricate themselves from the business and move on.

Exploring other personal interests before the sale can plant the seeds for the entrepreneur’s next fulfilling pursuit. It can help to build a new identity and relationships.

Activities such as learning new languages, coaching sports teams and civic engagement can help entrepreneurs adjust to their new lives. Business owners who disregard this step may feel irrelevant after leaving their business. They end up searching for fulfillment in pastimes such as traveling to exotic locations or flipping houses. These activities usually turn out to be brief and disappointing substitutes for the meaning they derived from building and running their businesses.

After they finalize the sale, former business owners should take advantage of the many resources that exist to assist entrepreneurs through the emotional transition process. A lot of them find it helpful to join a community or peer group such as a church or non-profit to establish new relationships. Other alternatives are financial peer learning groups like Tiger 21 or Evolve that provide collaborative environments for post-exit entrepreneurs to learn and network with peers. ²

Finally, anyone selling a business should have a team of trusted advisors — professionals, family, and friends — to confide in and talk to about navigating the emotional complexities of a sale. Peers who have gone through business sales and experienced the transition make for excellent confidantes and are a valuable resource. In the midst of a transaction, support from family, friends, and other advisors can significantly lessen the emotional burden.

Selling a company comes with many advantages. Owners are relieved from the stress and responsibility of running a business. They’re finally able to monetize years of work and are free from the risks inherent in owning a business. Yet along with the freedom and wealth, exiting a business comes with deep emotional pressures. Ultimately, however, if handled correctly, the sale of a business can be a gratifying event. Entrepreneurs will fare best if they plan their exit strategy, take steps to develop their new life and identity, avail themselves of resources that help former business owners, and surround themselves with trusted advisors. If they do so, they will be able to focus on continuing to run the company through the transition and enjoying the journey as they progress towards their sale.

¹ Inc. Magazine, “Managing the Emotional Toll of Selling Your Small Business.”
² Harvard Business Review, “Dealing with the

Company Culture: The Secret Sauce for Increasing Business Value

Wed, 10 Oct 2018 06:08:13 GMT

Since the dawn of business thousands of years ago, company culture has existed. Whether stated or not, companies have always had missions, values, beliefs and personalities. Despite this, people rarely talked about or tried to change their cultures. Instead, they focused squarely on the bottom line. In recent years, however, businesses have begun to invest time, energy and money to ensure their working environments are fun, challenging and friendly — characteristics that employees desire. At the same time, the media has shone a light on the subject. But why the change? Is culture more important than it used to be? Or is there simply an increased awareness of how it can impact on an organization’s success?

Change Driven by Information

The internet explosion over the last couple of decades provides part of the answer. Because the information superhighway brought data to our fingertips, it revolutionized our personal and business lives. Today, when questions arise, whether they are about the latest storm, housing prices, business solutions or the best employers, people turn to the internet.

Potential employees can now find out about work environments via the social media platforms LinkedIn, Indeed and Glassdoor, all of which attract millions of page-views monthly. Indeed and Glassdoor, which are both job-search sites, dedicate sections of their websites exclusively to reviewing employers. These spaces, where anyone can contribute their thoughts, have become repositories for information about workplace culture. Thus, the hiring process, which traditionally favored the employer’s needs, has now become a two way street. And those businesses with unique, positive cultures, such as Google and Zappos, not only gain the attention of potential employees but also receive plenty of media attention. To assess whether a company fits their values or beliefs, workers no longer have to rely on the interview process and, perhaps, word of mouth. After they join an organization, there is no reason for them to be surprised by a cultural misfit. With some research, job seekers can quickly identify healthy work environments.

Armed with this new level of transparency into the inner workings of a business, prospective employees have changed how they select employers. Why join a firm with an undesirable culture and only one week’s vacation, when they could work for a company that offers an enjoyable environment and unlimited vacation? As a result of the newfound knowledge of potential recruits, companies with poor cultures have scrambled to attract talent and have been forced to change the nature of their workplaces.

While the wide dissemination of information was the catalyst for change, employers who bettered their work environments accrued benefits beyond attracting the best and the brightest. Doing the right thing for their employees turned out to be good for business profitability, too.

Positive Cultures Stoke Revenues

In healthier cultures, employees became more engaged and less stressed, leading to increased revenues. While high-stress work environments may create excitement and activity in the short run, studies show stress reduces productivity over the long term. ¹ For example, disengaged workers are more likely to be absent or to have accidents, thus reducing revenues. By improving culture, companies can minimize this loss of productivity.

Another critical aspect of the working environment is the social relations between employees, including both peer-to-peer and boss-subordinate interactions. People spend a great deal of their time at work, and the quality of relationships with fellow employees can make the duration either enjoyable or miserable. A recent article by Harvard Business Review ¹ claims that social bonds are the most important predictor when it comes to team success. So employees relating well to each other are essential not only for their welfare but also for company valuations.

Healthy Workplaces Reduce Costs

There are two significant ways that improving culture decreases costs. First is its ability to reduce healthcare costs. The American Psychological Association estimates that the US economy loses over $500B per year due to health costs related to workplace stress. Since improving culture can reduce stress, it also decreases associated health costs.

Secondly, enhancing culture can lessen turnover costs by shoring up employee loyalty. According to research ¹ , workplace stress increases voluntary turnover by 50 percent. As a result, employers have to spend more to recruit and train new employees.

The Bottom Line on Culture

The availability of workplace information on the internet has brought more attention to company cultures, forcing companies to improve them to attract talent. In doing so, they have realized many benefits. They have furthered the wellbeing of employees, retained workers longer, attracted better talent, and heightened their business reputation. Revenues have increased along with engagement and productivity. At the same time, businesses have decreased healthcare and turnover costs. The net effect of all these benefits has been to boost bottom-line results. Thus, it’s vital for every company to examine their culture and take steps to enhance it.

1 Positive Culture increases Productivity:

“For further insights, you can read the article ‘Proof that positive work cultures are more productive’ published on Harvard Business Review.”

Growing and Selling Your Company: Six Essential Insights from Entrepreneurs Who’ve Been There

Mon, 07 May 2018 07:30:44 GMT

As an entrepreneur, you’re at the heart of our country’s economic growth. You’re an innovator who works hard and takes risks to turn your ideas into reality, thus creating value for your stakeholders. Wherever you are in your entrepreneurial journey, however, there are plenty of hurdles to overcome. When you’re growing your startup, you’re not only managing the business but also taking time to raise funds to invest. And even once your company is thriving, you cannot rest on your laurels. You have to maintain that level of success and think strategically about the endgame. How will you plan for your business exit? How do you monetize the value you’ve built so you have cash on hand for your next venture, your retirement or to fund any of your dreams?

At Strategic Exit Advisors, we advise business owners and entrepreneurs who are executing merger and acquisition transactions. We wondered about the shared insights that entrepreneurs gained as they traveled the path from startup to growth to business exit. So we interviewed company leaders representing various sectors —healthcare, technology, and education. Here’s what we discovered.

Entrepreneurship Is High-Stakes

Entrepreneurs did not get where they are by playing it safe. Along the way, they suffered sleepless nights as they took calculated risks. Many left behind lucrative corporate careers to face a blank slate. Not knowing whether it would pay off, they invested savings, loans and emotional capital into their venture, often logging countless hours before their companies delivered positive cash-flows. They did this not only in hopes of monetary reward but also for the intrinsic satisfaction of making their mark on the world by creating something worthwhile.

Success Is Who You Listen To

We’ve heard the expression “It’s not what you know, it’s who you know.” Entrepreneurs seem to take that thought further with an attitude of “It’s not what you know, it’s who you know and what they know.” While leaders who start their businesses are generally self-motivated individuals with in-depth knowledge and expertise, those that distinguish themselves usually recognize they cannot know everything necessary to grow and sell their companies successfully.

Because of this recognition, they build strong networks and rely on them, especially when making critical choices about how to expand or exit their businesses. They discuss decisions with colleagues who have experience in these areas, professional mentors who lead networking and trade associations, investors whose values align with their companies, and trusted lawyers and accountants. Also, they are most likely to rely on advice from those who understand the entrepreneur’s experience and care about their goals.

Time Is Precious

Business owners say finding investors and raising funds to support business growth can feel like a second job on top of managing a company. The same is true of trying to sell a business, which involves everything from making buyer presentations to completing due diligence. Thus, if these essential tasks are not handled effectively, they inevitably distract from business operations.

Patience Is Critical

Entrepreneurs hate to waste time and want rapid results. If they’ve been through fundraising or sales transactions before, however, they realize the value in remaining patient through these processes. At the same time, they cannot take their eyes off the road ahead — they must keep a laser focus on maintaining and enhancing their business’ health.

Think Hard, Plan Carefully

Business owners who proactively think about and plan for the future will be better off in the long run than those who react to events as they occur. That’s because the course of a business can take many unexpected twists and turns. Also, as Casey Stengel once said, “If you don’t know where you’re going, you’ll end up someplace else.”Thus, planning for the future is essential for building the best company. This includes taking steps to streamline operations, foster company culture, provide optimal products and services and generate demand. Establishing the business foundation and creating organic growth, however, is just part of the puzzle. Other questions to consider are whether you want to:

Grow through acquisitions
Sell to a larger company
Go public
Accept an unsolicited offer from a potential buyer or majority stakeholders
Take a methodical approach to exiting your business that puts you in the driver’s seat and ensures the sales price reflects its market valueWhen navigating the course of your business, it’s crucial to have clarity on your strategies and goals.

The Right Partners Are Essential

Entrepreneurs cite the importance of interpersonal relationships when selling or expanding a business. They seek investors who are aligned with their companies’ missions and buyers who respect their businesses’ cultures. They look for advisors with industry expertise who understand their goals and who they trust to support them throughout the transaction.

So if you’re an entrepreneur moving through the lifecycle of your organization from startup to growth to sale, know that it’s a high stakes game. You will be most successful if you find the right partners and listen to others with knowledge and expertise. Be careful with your own time, keeping your focus on the business, and use external resources when required. However, also be patient, letting fundraising and sales processes run their course. Above all, think about and plan for the future. If you know where you want to go, you just may end up getting there.

How to React to an Offer to Sell Your Business: A Life Sciences LSP Case Study

Mon, 07 May 2018 03:16:27 GMT

Triumph Consulting is a language services provider (LSP) that provides a variety of specialized translation services to life sciences companies. John French, the Owner and CEO, built a solid team and reputation within the life sciences industry and maintained a strong client-centric focus throughout Triumph Consulting’s 25-year history, which paid off in terms of both sales growth and customer satisfaction. To say that John was proud of the thriving organization he had built would be an understatement.

Dealing with an Unexpected Flattering Offer (UFO)

Successful companies, such as Triumph, do not go unnoticed for very long. John received a UFO from a larger competitor that was looking to acquire a growing life sciences LSP practice. He hadn’t put much thought into selling the company or how much Triumph could be worth. And although John hadn’t put the company up for sale, he was proud that someone had recognized his success and thought the offer seemed fair.

John’s thought Process:

John felt uneasy with the prospect of letting go of the business that had taken a lifetime to build. What would he do next?
John had never participated in an M&A process before.
He felt like he was in over his head, and unsure about what life would look like for him and his employees under new ownership.
The potential buyer had a corporate development team dedicated to doing deals, while he imagined that he could let the buyer drive the deal, he was concerned that he didn’t know what he didn’t know. Would it really ‘be simple’ to deal with the UFO versus embarking on a selling process?
John wasn’t sure who he could turn to for help.

After much reflection about his future plans, his employees, and the company he had built John decided he was ready to move on and let someone else take his company to the next level. But how would he deal with the complicated process and that visceral feeling ‘his competitors would find out the company was on the market?

John was introduced to SEA by a trusted advisor. He decided to have a conversation with SEA to discuss his options and to help him understand how all the pieces fit together. John found out that he was not alone; many other business owners were in similar situations. . He learned that an investment banker could help guide him through the process, but was concerned that hiring an advisor would scare away the potential buyer. He found out that SEA’s Three-Step Sales Process would identify other suitable buyers who could be a better fit, both in terms of price and cultural alignment, and that qualified buyers prefer to work with an investment bank on the other side.

“A qualified buyer, as in one who truly sees the value in your business and who is willing to pay you for it, wants you to hire an M&A advisor. The reason is simple: when both parties are equally invested in executing the transaction, a sell side advisor will benefit the buyer just as much as the seller.” – Robert Waring, Managing Director, SEA

The Competitive Auction

John decided to engage SEA as his M&A team because he decided that he needed experienced help to take control of his exit. SEA analyzed three years of Triumph’s financial performance and informed John that he could receive a substantially higher valuation with better terms based on the current M&A environment than what the UFO had offered. SEA’s robust UFO Response process and expertise in the lower middle market put competitive pressure on potential buyers, rooting out bargain hunters and finding those that were willing to compensate John for the organization he had built. He rejected several prospective buyers during the process, including the buyer that had submitted the UFO, receiving multiple Letters of Intent (LOIs) from both strategic and financial buyers. After discussions with his SEA advisors, John chose the LOI based on his criteria – including purchase price, payment method, employee sensitivity, and organizational cultural fit.

After the LOI was signed, SEA took the lead in getting the deal across the finish line. Throughout the entire process including due diligence, John was able to maintain his focus on running his company, while SEA managed the details. This teamwork led to stronger company performance, and a full realization of the purchase price. SEA ultimately found a strategic buyer that was both a better fit with Triumph’s corporate culture, and willing to pay twice the initial UFO. As it turns out hiring an Investment Bank to receive double the enterprise value of John’s company returned a triple digit ROI.

“When I got my UFO, I felt like it would be easy and a premium value for the business I built. As I learned I was at the mercy of the buyer. SEA’s auction process put me back in the driver’s seat. Suddenly, it was about what I wanted as well.” – John French, CEO & Founder, Triumph Consulting.

Key Takeaways

– Don’t leave money on the table.

Buyers look for bargains, and CEOs who choose to go the DIY route are low-hanging fruit because they do not know what their company is truly worth, or the necessary negotiating strategy. On top of that, savvy buyers will keep pushing for an adjustment to lower the purchase price for trivial items; or require too much working capital after the LOI is signed. Hiring an investment banker yields a purchase premium that is many times greater than the fee. Hiring an investment banker is an investment that offers one of the highest ROIs of any you will make in your business.

– Take control of your exit.

By placing buyers on your timeline rather than theirs, you are positioning yourself in control of a competitive auction process that will keep prospective buyers on your timeline. A deliberate and organized sell side M&A process will give you the peace of mind that acquisition offers truly reflect the market value of your company.

– Focus on running your business.

The journey from an initial conversation to close is emotional and can be time consuming. Buyers pay close attention to performance in the months leading up to close, because a dip in sales is an opportunity to lower the purchase price. This is not the time to take your eye off the ball.

*This case study is representative of real client engagements in the past. The client and company names have been altered to preserve confidentiality.