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Capital Ideas for Private Business

Welcome to this issue of Capital Ideas, our newsletter dedicated to business selling, business buying and financial resources for mid-market companies.


The Market is Hot to Sell Your Business, But You’re Not; Think Equity Recapitalization

An Often Overlooked Way to Create Liquidity

By Jay Carter, Principal
Charlotte Office, Corporate Finance Associates

The market for selling a family-owned or other privately held business in North America has never been better than it is today. This is due in part to the following factors:

  • 6 years of continuous quarterly GDP growth in the U.S.
  • Record levels of money flowing into private equity funds
    ($215 billion in 2006).
  • Record levels of money flowing into hedge funds
    ($1.53 trillion in 2006).
  • Readily available commercial credit from banks and other lenders
  • Strong performance at individual company levels

Combined, these factors have resulted in:

  • More Merger and Acquisition activity
  • Greater interest in privately-held companies from investors
  • Increased competition for acquisition candidates
  • Higher valuations being paid for private companies

However, not all owners are ready to sell their privately held
company. Consider the case of Bill James... Read more

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How Do I Know It’s Time To Sell My Company?

A Ten Point Guide

By Robert Contaldo, Principal
Chicago Office, Corporate Finance Associates

Selling your business, which is perhaps your largest asset, can be a difficult decision. It has been part of you and part of your family. You have loved it you have cursed it you have nurtured it. Unlike us, it can live for generations though the time will come when it must change hands.

Here are some points to consider when deciding whether or not it is time to sell your business:

The Thrill Is Gone

There simply comes a time when a business owner does not care to take the business any further. The battles and victories that at one time were energizing have now lost their importance, and have become somewhat boring and wearisome... Read more

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Feature Acquisition

overland-nebco

Situation:
Vayden Anderson decided at 78, it was time to sell his business and retire. With no heirs interested in acquiring Overland Sand and Gravel, on the recommendation of his attorney, Anderson turned to CFA. He retained CFA to sell his business, the fourth largest ready mix concrete producer in Nebraska, to a buyer he pre-approved, a buyer who would retain all of Overland’s employees and operations.

Result:
CFA quickly identified the right prospects and received several offers. Ultimately, CFA negotiated a transaction favorable for both parties (and significantly exceeding the seller’s value expectations). The transaction closed in less than 6 months from when CFA was hired and helped and achieved all of the seller’s goals.

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