Corporate transactions continue to be a significant component of overall corporate strategy. Mature and consolidating industries continue to dispose of non-strategic assets while younger, high growth companies look for ways to grow. And for private equity, there are no shortages of businesses seeking capital. Inorganic growth including a viable acquisition program is a great strategy to quickly expand and gain market share. Is there sufficient rationale to execute on such decisions? Windham Brannon’s Transaction Advisory team takes a consultative approach based on years of capital markets experience to refine strategic plans and help support transactions. The team will analyze transactions from initial diligence and financial modeling to post-transaction support, assuring businesses and private equity firms of a carefully analyzed, objective decision that builds value. With the addition of a dedicated division to business valuations, Windham Brannon is well-positioned to offer skilled, careful analysis to a range of financial decisions.
Often, business owners come to us with a specific range of value in mind. Often times, there is a gap in actual versus perceived value, especially in closely-held businesses. In these situations, Windham Brannon works with the business owners, their executive teams, and deal partners to help them understand key drivers of value and assess transition options, whether it leads to an exit or offer.
Buy/sell transaction support provides thorough insight throughout the lifecycle of a deal and the investment rationale which supports a transaction. We work directly with business owners and private equity partners to achieve strategic and financial goals by reviewing options, planning and preparation, assisting in identifying targets and deal negotiations with the transition team, and coordinating post-transaction support.
The real work in any truncation begins when non-binding terms are circled and supported by letters of interest of intent. As in any transaction, partners in a deal need clarification on issues as varied as insurance and legal. Proper financial diligence is imperative to outlining and responding to risk. Tax due diligence, another key piece of vetting targets and preparing a company for sale, can include verifying tax basis adjustments, tax filings, tax expenses, as well as ensuring the tax documentation is accurate and complete.
Most strategic issues survive a closing, so it is imperative that post transaction planning begin prior to the close date. This is a critical time in the deal lifecycle and support can include meeting interim C-level needs, board communications, revenue recognition analysis, tax planning, and more.
Because net income and GAAP based financial statements have limitations as to the future financial health of any company, a quality of earnings report (QOE) takes a deeper dive into a company’s financials and normalizes operating earnings eliminating activities which will not survive the transactions. The QOE is invaluable to buyers and sellers paint a clear, objective picture of a company. Reports uncover whether stated earnings are accurate and if current growth is sustainable; detail historical financial data; presents financial trends and analysis as well as revenue recognition and working capital; and can contain additional insights to further understand the micro and macroeconomic trends affecting the company and therefore, the value of the deal.
Even when all parties agree on the fundamentals of a business transaction, the tax implications can be felt for years if the deal is not favorably structured for tax purposes. It’s important to remember that the buyer and seller, even in an amicable deal, have different priorities and the tax structure plays into that. At times, the entity selection is important and must be considered and possibly changed months ahead of time; in other situations, a deal can be structured over time to minimize the seller’s taxable impact. Windham Brannon can assist with entity and capital restructuring, leveraged buyouts, negotiations, and more.
How much is the business worth? To the founder, it’s everything; to a buyer or private equity firm, it’s a number based on well-documented research and analysis from an independent, objective appraiser. Windham Brannon’s Valuations team has earned specialized industry credentials as accredited business valuation and senior appraisers, which means we’re well-qualified to handle complex valuation issues concerning businesses, intangible assets, partnership agreements and other business interests, as well as estates, trusts, and other assets.
Whether you are considering a strategic purchase, the disposition of a non-core business or a strategic merger to grow your business, your team will need the very best support to ensure success. Windham Brannon’s Transaction Advisory team has provided leadership in more than 100 deals with a cumulative value in excess of $4 billion. Additionally, our team has worked in high-growth private industries in executive roles, so we know what you’re facing. Our services are designed to increase value, clarity, and competitive positioning from buy/sell-side to post-deal support and guidance.
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