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Capital Ideas for Middle Market Businesses

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


The Challenges of Selling to Buyers Outside the United States

Four Notable Factors

By Jim Zipursky, Principal
Omaha Office, Corporate Finance Associates

coverCFA has been active closing numerous cross-border transactions over the past 10 years. "Closing a deal with a buyer or seller in your own country is difficult enough," said Armand-Louis Weisheimer, Chairman of the International Corporate Finance Group (of which CFA is a founding member), "but getting a deal done with a buyer or seller from a foreign country who speaks a different language and lives seven time zones away is even more challenging."
What are the biggest challenges of selling your business to a buyer outside of the USA? The following, non-inclusive list of challenges is based upon our experience working with buyers and sellers on cross-border transactions.

Cultural Differences

Just because it plays in Peoria does not mean it plays in Paris or Prague. The way we conduct business in the USA is much different than other countries. Many people outside the USA think Americans work too many hours and talk about business too much. A typical business lunch with Europeans involves little discussion of business and usually includes a bottle of wine or two. Even table manners are quite different: at a lunch meeting with our buyer clients from Europe, the owners of a business in the USA were amused as they watched their European counterparts eating their pizza with a knife and fork... Read more

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How to Sell Your Business at Full Value in a Down Market

"I want to sell my business but can't right now..."

By Robert Contaldo, Principal
Chicago Office, Corporate Finance Associates

coverThis lamentation is being sounded now more than ever. If you listen carefully, you can hear its plaintive wail in the machine shops of Chicago's West side to the boardrooms of America's multinational iconic companies.

"I want to sell my business..."

are the words whispered by the sojourner who must move on or shouted by the executive responding to the perceived torture tactics of an unyielding adversary be it lender, customer, market, competition
or partner.

"...but can't right now..."

For many business owners, the "but can't right now" in its complete form is really:

"I want to sell my business but can't right now because my
revenue is down, or my earnings are flat, or I lost a big customer, or I'm about to land a big customer or project, or I've just invested a lot of money in my equipment or systems."

If any of these statements are the key obstacle to selling your business, here's the good news... Read more

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Feature Acquisition

tombstone

Situation: An office within CFA identified the industry that manufactures replacement brushes for street sweepers as a niche market, with the competition fairly evenly distributed nationwide due to the fact that freight is a discriminating cost factor. This opportunity was brought to Westshore Capital Partners who engaged CFA to find candidate platforms.

Solution: About a dozen candidates were contacted and interviewed and the platforms boiled down to two or three. The largest candidate, United Rotary Brush, expressed strong interest – however there were a number of challenges including taxation, succession, and absorption of earlier acquisitions. After a series of very substantive meetings, the seller decided to put the process on hold.

EIGHT YEARS LATER, the seller contacted Westshore to restart the process. The owner was motivated by the prospect of raising capital gains taxation. After very difficult negotiations, Westshore closed the deal.

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