Welcome to this issue of Capital Ideas, our
newsletter dedicated to business selling, business buying and
financial resources for mid-market companies.
Is Now the Time To Sell?
Taxes May Be an Issue
By Jim Zipursky, Principal
Omaha Office, Corporate Finance Associates
We are often asked by our clients to assist them in determining the best time to sell
their business. While our crystal ball is
no clearer than yours, there are certain elements to be
considered when determining the best time to sell a
business.
The best time to sell your business is when you are ready to sell, but it
does help if the economy is in good shape. Also, buyers want a business with a bright horizon.
There is another factor looming
today regarding timing the sale
of your business. Today, we enjoy
some of the lowest capital gain tax
rates we’ve seen in decades. The
temporary cut, implemented by
President Bush, to 15% for long-term
capital gains, has been a boon
to both the economy as well as the
Mergers & Acquisitions market. But,
this low rate is temporary at best
and certainly...
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Understanding How
Private Equity Groups Approach Value
How PEGS Value Your Company
By Sunrise Equity Investors
Dallas, Texas
It behooves Private Equity investors
(PEG’s) to work with business
owners who understand a
deal from the PEG’s perspective. We
hope this article helps any potential
seller better understand the mindset
of Private Equity Groups.
Obviously, the end analysis of value
is driven by the Internal Rate of
Return (IRR) a PEG wants to receive
and that they have touted to their
Limited Partners. Understanding
how they work through that analysis
is helpful to a business owner
thinking about selling to, or taking
equity dollars from a PEG.
How do PEGs build their IRR models?
First, many will assume a five year
holding period. They will plan to
sell the company in about that time
frame, so they will build a model
that looks at...
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Feature
Acquisition
Founded in 1964, M&M Pump &
Supply is a leading distributor
of comprehensive systems and
components used in oil and gas drilling
and production to gas producers
and industrial customers located
primarily in the Illinois Basin. The
Company also provides oil field
services such as hydrostatic pipe and
tank testing and cleaning, delivery,
and equipment rentals. M&M Pump
& Supply retained the services of
Corporate Finance Associates to
identify and negotiate a deal with a
strategic acquirer.
DN Partners is a Chicago-based private
equity firm with investments in
lower middle-market companies generally
based in the Midwest. (www. dnpartners.com). The Company
specializes in partnering with management
teams to facilitate corporate
spin-offs, family succession transactions,
recapitalizations, buy and
build strategies, and management
buyouts. DN Partners’ other business
interests include manufacturing,
packaging, printing, and communications
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