Selling Your Business

mergers & acquistions

You’ve worked hard to build a business that has provided a livelihood for many people over the years. 
You’ve labored and ground out every detail of its growth and existence. 
You’ve sacrificed along the way, and your instincts have paid off. 
Don’t you want your last - and probably largest - transaction to be the best one of all?

We Start with a Pre-Sale Financial Review &

Close-ability Analysis

Have you heard stories of someone selling their business and at the last minute or in the final hour, the deal fell through? We have. In fact, we hear that story all the time. So we've asked ourselves why it happens and how we will avoid this situation for our clients.

We scoured the M&A landscape to see who had the highest success rate, and we found that investment bankers - who typically work on huge deals involving hundreds of millions of dollars - rarely had this problem. We then copied and modified some of their techniques to fit transactions in the lower middle market.

Our solution: every engagement starts with a Financial Analysis looking back 5 years. We review P&Ls, tax returns, inventory levels, payroll, sales trends, customer concentration, vendor reliance, and a host of other variables that affect profitability, sustainability, and future trends. This task is led by a GaP Senior Financial Advisor to ensure that the data is accurately recast, properly documented for price defense, and culminates in an accurate Broker’s Opinion of Value (BOV). Our thoroughness and attention to detail require this process take 3-5 weeks to complete. Many of our competitors claim they do it in under 3-5 hours. Think about it!

Upon completion, our in-house accountants provide a full report detailing our findings and value-range opinion. We then use these observations and conclusions to have a serious fact-based discussion with you about the types of buyers we can attract and the gross dollar figure you can expect to receive from a sale. Then and only then, are we confident enough about your business to determine if: (a) we are the right broker to represent you; (b) that impediments to closing a sale are understood, and (c) that you are properly informed about the process, difficulties, and expected outcomes. Through this process and its resulting breakdown of your options, both you and GaP will be able to make a well-informed decision regarding: (A) Working together to pursue a sale; (B) Employing joint efforts to improve the valuation prior to a sale; or (C) Determining that GaP may not be a good fit for you.

We Start with a Pre-Sale Financial Review &

Close-ability Analysis

Have you heard stories of someone selling their business and at the last minute or in the final hour, the deal fell through? We have. In fact, we hear that story all the time. So we've asked ourselves why it happens and how we will avoid this situation for our clients.

We scoured the M&A landscape to see who had the highest success rate, and we found that investment bankers - who typically work on huge deals involving hundreds of millions of dollars - rarely had this problem. We then copied and modified some of their techniques to fit transactions in the lower middle market.

Our solution: every engagement starts with a Financial Analysis looking back 5 years. We review P&Ls, tax returns, inventory levels, payroll, sales trends, customer concentration, vendor reliance, and a host of other variables that affect profitability, sustainability, and future trends. This task is led by a GaP Senior Financial Advisor to ensure that the data is accurately recast, properly documented for price defense, and culminates in an accurate Broker’s Opinion of Value (BOV). Our thoroughness and attention to detail require this process take 3-5 weeks to complete. Many of our competitors claim they do it in under 3-5 hours. Think about it!

Upon completion, our in-house accountants provide a full report detailing our findings and value-range opinion. We then use these observations and conclusions to have a serious fact-based discussion with you about the types of buyers we can attract and the gross dollar figure you can expect to receive from a sale. Then and only then, are we confident enough about your business to determine if: (a) we are the right broker to represent you; (b) that impediments to closing a sale are understood, and (c) that you are properly informed about the process, difficulties, and expected outcomes. Through this process and its resulting breakdown of your options, both you and GaP will be able to make a well-informed decision: (A) Working together to pursue a sale; (B) Employing joint efforts to improve the valuation prior to a sale; or (C) Determining that GaP may not be a good fit for you.

Business Marketing

Preparation

Once we enter the preparation phase, working towards a sale is our only agenda. In this phase (with length depending on deal and company complexity), we prepare a Teaser, the Confidential Business Overview (CBO) - our name for the deal pitchdeck, and Confidentiality/Non-disclosure Agreements.

This critical phase of our engagement is led by an experienced professional with deep experience in analysis and strategy so that the "story" of your business is developed. We show the progression from where you began to strategic pivots in your evolution to where you are today - highlighting all of it with asset photos, financial tables, and key factors contributing to your current business results. In addition, we assess your growth trends and opportunities and propose how these will help various buyers achieve their own objectives, demonstrating that the ROI on a purchase is healthy and achievable for the right set of acquirers.

Once the CBO is complete, we condense its information into a 1-page “Teaser.” The Teaser is generic enough so that readers cannot pinpoint the identity of your business but also specific enough for them to determine if moving forward with detailed talks makes sense. The Teaser helps weed out prospects that aren’t a fit and encourages those who are to opt in and take a more detailed look at the business. The CBO, Teaser, and supporting data are so robust that they are 85-90% of what an interested party needs to make the decision of whether to make an offer. None of these materials are ever released until our team and yours have all reviewed and approved the content.

Prospects “opt in” by executing a Confidentiality/Non-disclosure Agreement (CA/NDA) that includes non-compete and non-circumvent clauses. By agreeing to these terms and proving they are financially capable of closing a purchase of this nature, prospects have allowed us to vet them enough so that we will share the identity of your business and the CBO.

Business Marketing

Preparation

Once we enter the preparation phase, working towards a sale is our only agenda. In this phase (with length depending on deal and company complexity), we prepare a Teaser, the Confidential Business Overview (CBO) - our name for the deal pitchdeck, and Confidentiality/Non-disclosure Agreements.

This critical phase of our engagement is led by an experienced professional with deep experience in analysis and strategy so that the "story" of your business is developed. We show the progression from where you began to strategic pivots in your evolution to where you are today - highlighting all of it with asset photos, financial tables, and key factors contributing to your current business results. In addition, we assess your growth trends and opportunities and propose how these will help various buyers achieve their own objectives, demonstrating that the ROI on a purchase is healthy and achievable for the right set of acquirers.

Once the CBO is complete, we condense its information into a 1-page “Teaser.” The Teaser is generic enough so that readers cannot pinpoint the identity of your business but also specific enough for them to determine if moving forward with detailed talks makes sense. The Teaser helps weed out prospects that aren’t a fit and encourages those who are to opt in and take a more detailed look at the business. The CBO, Teaser, and supporting data are so robust that they are 85-90% of what an interested party needs to make the decision of whether to make an offer. None of these materials are ever released until our team and yours have all reviewed and approved the content.

Prospects “opt in” by executing a Confidentiality/Non-disclosure Agreement (CA/NDA) that includes non-compete and non-circumvent clauses. By agreeing to these terms and proving they are financially capable of closing a purchase of this nature, prospects have allowed us to vet them enough so that we will share the identity of your business and the CBO.

Live

Marketing

Several weeks before the marketing preparation phase wraps up, some members of our team begin preparing for live marketing. Our initial efforts include formulating a list of prospects through the vast number of professional-buyer relationships we maintain. We cull the list to include only those buyers who have expressed interest in the industry, size, and type of business we are marketing. We also develop a list of deal-specific potentially-interested parties based on the parameters and industry of the selling company.

We go through this process for strategic acquirer candidates (competitors, suppliers, customers, etc.), financial buyers (private equity, pension funds, family offices, etc.) and foreign buyers (when appropriate). Other brokers may brag about sharing your opportunity with thousands of prospects. But at GaP, we’ve found that making the up-front effort to research our prospects and only include those who clearly have a compelling growth or operational reason to acquire the business is a far more efficient method. Only one suitor will win the right to purchase your business, and our approach ensures we have highly-motivated buyers at the table willing to compete for that right. It is all a meticulously-crafted set of events designed to maintain control and spur competition.

Once the marketing materials are approved and ready to distribute, a GaP Partner reaches out to the targets we’ve identified and presents the opportunity as a component of the solution to their growth plans. If talks go well, the prospect signs the CA/NDA, and we share the CBO with them. Once potential buyers have the CBO in hand, they typically take several weeks to study and digest all the information. We utilize this period to move interested parties systematically through their information-gathering processes, leading a handful of them to the conclusion that they simply must make an offer to acquire your business. This highly-tactical part of our process is coordinated much like a ballet, where we endeavor to have each of the top prospects get excited and submit offers all in the same general time frame.

This technique is a beautiful thing for our clients as competitive pressure heats up when the prospects sense that another prospect may be favored. Our system of escalating interest, coupled with an intentional sense of urgency, has proven to account for a 15-30% increase over initial offers received only weeks earlier.

This phase of marketing ends when we sit down with you to review offers representing a variety of buyers. Each offer is unique in how it addresses variables such as finances, terms, legacy continuation, employee treatment, etc. When you finally select the suitor you prefer, we work with that party to convert their Indication of Interest (IOI) to a binding Letter of Intent (LOI), complete with a closing target date and specific conditions to closing (financing arrangements, due diligence, shareholder approval, etc.).

Live

Marketing

Several weeks before the marketing preparation phase wraps up, some members of our team begin preparing for live marketing. Our initial efforts include formulating a list of prospects through the vast number of professional-buyer relationships we maintain. We cull the list to include only those buyers who have expressed interest in the industry, size, and type of business we are marketing. We also develop a list of deal-specific potentially-interested parties based on the parameters and industry of the selling company.

We go through this process for strategic acquirer candidates (competitors, suppliers, customers, etc.), financial buyers (private equity, pension funds, family offices, etc.) and foreign buyers (when appropriate). Other brokers may brag about sharing your opportunity with thousands of prospects. But at GaP, we’ve found that making the up-front effort to research our prospects and only include those who clearly have a compelling growth or operational reason to acquire the business is a far more efficient method. Only one suitor will win the right to purchase your business, and our approach ensures we have highly-motivated buyers at the table willing to compete for that right. It is all a highly-controlled set of events designed to maintain control and spur competition.

Once the marketing materials are approved and ready to distribute, a GaP Partner reaches out to the targets we’ve identified and presents the opportunity as a component of the solution to their growth plans. If talks go well, the prospect signs the CA/NDA, and we share the CBO with them. Once potential buyers have the CBO in hand, they typically take several weeks to study and digest all the information. We utilize this period to move interested parties systematically through their information-gathering processes, leading a handful of them to the conclusion that they simply must make an offer to acquire your business. This highly-tactical part of our process is coordinated much like a ballet, where we endeavor to have each of the top prospects get excited and submit offers all in the same general time frame.

This technique is a beautiful thing for our clients as competitive pressure heats up when the prospects sense that another prospect may be favored. Our system of escalating interest, coupled with an intentional sense of urgency, has proven to account for a 15-30% increase over initial offers received only weeks earlier.

This phase of marketing ends when we sit down with you to review offers representing a variety of buyers. Each offer is unique in how it addresses variables such as finances, terms, legacy continuation, employee treatment, etc. When you finally select the suitor you prefer, we work with that party to convert their Indication of Interest (IOI) to a binding Letter of Intent (LOI), complete with a closing target date and specific conditions to closing (financing arrangements, due diligence, shareholder approval, etc.).

Buyer Diligence and

Closing the Deal!

Many sellers err in assuming the initial offer or the negotiated price in the binding Letter of Intent (LOI) is the price they will ultimately receive for their business. Well, the dirty little secret of the M&A business in the lower middle market is that sophisticated buyers prey on unsophisticated sellers.

Finding and purchasing a good business - among all the mediocre businesses out there - is a high-stakes game. A common tactic some buyers use is to offer an attractively-structured high price in the Indication of Interest (IOI) phase of tire kicking. This gets sellers excited; they take the bait believing they have a buyer with good intentions. If the buyer’s plan works as intended, it will convince the seller to enter into a binding LOI that is conditional upon a host of items being verified to set standards during a deep-dive due diligence.

If you’ve ever heard of “deal fatigue,” it is a very real emotion that almost every buyer and seller experience to some degree. However, intentionally creating deal fatigue and dragging a seller to wits’ end is a commonly-used tactic during due diligence. Once a seller is sufficiently worn down, the buyer will begin to point out how diligence has uncovered information which causes the deal to be less attractive. The dialogue then shifts that for the buyer to stay the course and close the deal, the offer must be lowered. This scenario can play out with several variables until the seller is convinced that this lower offer is better than starting over and going through the process again with the next highest bidder. Eventually, the buyer knows that the seller is unable to be pushed further and will agree to close quickly upon acceptance of the lower price.

At GaP, we know this game and can spot it a mile away. Our processes are designed to thwart such attacks and expose them early. You want to field a team that is every bit as savvy, educated, and experienced as the team your buyer brings. That’s why every engagement starts with a core team of a CFO/CPA, a Strategist/Analyst, and a "former business owner" Partner to service our client. If you’ve read this far, you probably realize that we are highly intentional about everything we do. Since we performed a Financial Review and Close-ability Analysis as the first steps in our engagement, here in due diligence our financial staff is prepared to go toe-to-toe with their financial staff, our analysts with their analysts, etc. We knew this would be coming and long ago anticipated their questions and biases, prepared our responses, and are now able to maintain control of the process by heading them off at the pass with pre-planned price defense strategies.

Due diligence is the place in this entire process where you have the greatest risk of being forced to take a reduced price OR losing your buyer and having to back up 4 months, regroup, and start over. To combat this, you want to be in due diligence for as short a period as possible, which is why we take added time on the front end - prior to live marketing - to create and strategically deploy data sets that leave a buyer unable to “trade down” as a result of due diligence. With GaP, due diligence is simply aiding buyers to confirm what we’ve already disclosed and getting them comfortable that there are no surprises embedded in their purchases.

When you employ a team that covers all the specialty disciplines, knows how to navigate buyers’ processes, and places paramount importance on maintaining confidentiality and control, then you have positioned yourself for a successful, full-price closing.

All that remains is for your M&A attorney and the buyer’s counsel to draw up the many documents required to close officially. (If needed, we will introduce you to well-qualified M&A attorneys and help you pick the right one for your situation.) During this time, GaP interfaces extensively with the legal teams to make sure they stay in their lane of protecting you in the transaction and not renegotiating business terms. Many a sale has gone sideways when the attorneys start trying to alter deal terms during document preparation.  Business- or transaction-related issues that arise during this legal phase are personally handled by a GaP Partner to ensure your interests are made paramount.

Once the documents are executed and funds wired, you will join an elite group of business owners who’ve exited in a world-class manner.

Buyer Diligence and

Closing the Deal!

Many sellers err in assuming the initial offer or the negotiated price in the binding Letter of Intent (LOI) is the price they will ultimately receive for their business. Well, the dirty little secret of the M&A business in the lower middle market is that sophisticated buyers prey on unsophisticated sellers.

Finding and purchasing a good business - among all the mediocre businesses out there - is a high-stakes game. A common tactic some buyers use is to offer an attractively-structured high price in the Indication of Interest (IOI) phase of tire kicking. This gets sellers excited; they take the bait believing they have a buyer with good intentions. If the buyer’s plan works as intended, it will convince the seller to enter into a binding LOI that is conditional upon a host of items being verified to set standards during a deep-dive due diligence.

If you’ve ever heard of “deal fatigue,” it is a very real emotion that almost every buyer and seller experience to some degree. However, intentionally creating deal fatigue and dragging a seller to wits’ end is a commonly-used tactic during due diligence. Once a seller is sufficiently worn down, the buyer will begin to point out how diligence has uncovered information which causes the deal to be less attractive. The dialogue then shifts that for the buyer to stay the course and close the deal, the offer must be lowered. This scenario can play out with several variables until the seller is convinced that this lower offer is better than starting over and going through the process again with the next highest bidder. Eventually, the buyer knows that the seller is unable to be pushed further and will agree to close quickly upon acceptance of the lower price.

At GaP, we know this game and can spot it a mile away. Our processes are designed to thwart such attacks and expose them early. You want to field a team that is every bit as savvy, educated, and experienced as the team your buyer brings. That’s why every engagement starts with a core team of a CFO/CPA, a Strategist/Analyst, and a "former business owner" Partner to service our client. If you’ve read this far, you probably realize that we are highly intentional about everything we do. Since we performed a Financial Review and Close-ability Analysis as the first steps in our engagement, here in due diligence our financial staff is prepared to go toe-to-toe with their financial staff, our analysts with their analysts, etc. We knew this would be coming and long ago anticipated their questions and biases, prepared our responses, and are now able to maintain control of the process by heading them off at the pass with pre-planned price defense strategies.

Due diligence is the place in this entire process where you have the greatest risk of being forced to take a reduced price OR losing your buyer and having to back up 4 months, regroup, and start over. You want to be in due diligence for as short a period as possible, which is why we take added time on the front end - prior to live marketing - to create and strategically deploy data sets that leave a buyer unable to “trade down” as a result of due diligence. With GaP, due diligence is simply aiding buyers to confirm what we’ve already disclosed and getting them comfortable that there are no surprises embedded in their purchases.

When you employ a team that covers all the specialty disciplines, knows how to navigate buyers’ processes, and places paramount importance on maintaining confidentiality and control, then you have positioned yourself for a successful, full-price closing.

All that remains is for your M&A attorney and the buyer’s counsel to draw up the many documents required to close officially. (If needed, we will introduce you to well-qualified M&A attorneys and help you pick the right one for your situation.) During this time, GaP interfaces extensively with the legal teams to make sure they stay in their lane of protecting you in the transaction and not renegotiating business terms. Many a sale has gone sideways when the attorneys start trying to alter deal terms during document preparation.  Business- or transaction-related issues that arise during this legal phase are personally handled by a GaP Partner to ensure your interests are made paramount.

Once the documents are executed and funds wired, you will join an elite group of business owners who’ve exited in a world-class manner.

Timeline

Weeks 1-4

Financial Review & Close-ability Analysis

Week 5

Go or No-Go Decision to Sell at this Time

Weeks 6-12

Marketing Preparation and Price Defense Underpinning

Weeks 13-23

"Live" Marketing and Offering Submittal

Weeks 24-25

Review Offers and Negotiate Exclusivity

Weeks 26-32

Due Diligence and Closing Document Preparation

Week 33

Closing and Transfer

What Others Are Saying
Wealth Planner

In my business, our clients are expecting us to take a vested interest in their success. Our first introduction of GaP to a client met every expectation we had hoped for. GaP is a very transparent, focused, and capable organization which helps support business owners in the journey through transition. I believe it starts with their desire to see the client be successful. I look forward to a continued relationship with their organization.

What Others Are Saying
Client's CPA

Bret Pardue represented a very important client of mine as broker. My client not only received unparalleled brokerage service, but as a much welcomed bonus, they also gained invaluable information from Bret’s seasoned experience as past CEO and founder of a successful, larger business enterprise. When we first met with Bret, he listened to my client to determine if they were in the right mode and business cycle for acquisition. He asked poignant, detailed questions to assess my client’s needs. Once it was agreed it was indeed a good time to sell, Bret took the deal by its horns and walked us through the process seamlessly from start to finish. Bret’s due-diligence preparation guidance and shedding of light on potential risks that might loom ahead were on-point advice for multiple concerns my client had through this big transaction.

What Others Are Saying
Middle Market Business Owner

How is Matt Gilbert different? He doesn't have an MBA in business administration or finance. He doesn't come from one of the large local private equity firms. He has been a business operator, with his own 'skin' in the game, in several businesses that had improved earnings and sold. In my mind, he has a better chance of understanding me than anyone else I have met. In the process of deciding whether or not it was time to sell several years ago, I took about a month and went around to visit every Houston-based private equity firm and M&A lawyer I could get to meet with me. I had some quality visit time with almost all of them. Many of them stayed in touch. However, I have chosen Matt Gilbert to 'TRUST' finding me one last partner, so that my life's work doesn't just disappear.

What Others Are Saying
M&A Specialist Attorney

Our firm has had the pleasure of working with Gilbert & Pardue Business Advisors (GaP). GaP exhibits vast practical experience and a very good understanding of the market, regardless of industry. Their ability to walk the client through the process, both from a timing and pricing standpoint is invaluable.  Their firm is our go-to firm for middle market companies that want to be brokered to potential strategic and financial buyers.

What Others Are Saying
SBA Preferred Lender

Many business brokers will get a seller’s hopes up with unrealistic valuations or sales prices…and then they may charge a slew of fees for marketing, financial review, legal, etc. before getting any interest from buyers. In those cases, it is possible the business brokers make their money up front without regard to the seller’s prospects of selling the business. Because the price is not realistic, they may never get serious traction. This doesn’t happen with GaP. Another thing GaP does that I find unique is their cultivation of relationships with buyers (even if inactive) so that they may be able to privately sell a business without openly advertising it for sale. This can be incredibly valuable to a seller requiring utmost discretion. Most business brokers balk at the amount of work it takes to develop relationships with inactive buyers. GaP welcomes the opportunity.

What Others Are Saying
Concierge Business Banker

I cannot emphasize enough how impressed I have been with Matt Gilbert and the team associated with Gilbert & Pardue. I have been in banking for over 30 years and have had many opportunities to assess the trustworthiness and professionalism of clients and their businesses. Without doubt, after visiting with Matt Gilbert, I felt I could recommend and refer him to any of my clients who might have need of an advisory expert as relates to their business. He has proven that my impression was not only correct, but he has continued to prove that his years of experience have enabled him to create a network of people and businesses who rely on his ability to guide them in the right direction and to pull together the components they need to achieve their goals. Anyone who seeks counsel from Matt and his team are in good hands!

What Others Are Saying
Wealth Advisor

My clients are often nearing retirement age, with no suitable heir to their business and a desire to sell. What many don't understand is that business owners’ businesses are like their babies. They created and nurtured the entity from its infancy and simply want to ensure the business goes to someone that will take care of it like they did. Matt understands this well from his own personal experience of creating, owning, and selling businesses. As a financial advisor looking to provide my clients with a seamless and enjoyable retirement, Matt and his team have been instrumental in assisting my clients with their business transaction needs at a level of service that exceeds our expectations.

What Others Are Saying
Business Owner - Fractional CFO Client

As a new business owner, I was not familiar with what an M&A firm does. When I first learned of GaP and the M&A services they provide, I thought that they just assisted in selling and buying companies. However, after speaking with them, I quickly learned that they help companies with a variety of services to become more successful, whether they are ready to sell or not. A prime example of this is the fractional CFO services they provide. We really needed that financial leadership when it came to financial modeling and cash flow forecasting. This has enabled us to grow. GaP will guide you towards thinking about aspects of your business that you are unable to think about simply because you are too busy in the business itself.

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