There are a number of issues to consider when deciding to sell your company. What are your personal and business financial goals? What will you do after a sale is complete? Are you ready to fully commit yourself to selling and doing what is required to complete a sale? Another consideration is the market and whether it is a favorable environment to maximize the value of your company.
What is my business worth?
The simple answer is that your business is worth whatever one is willing to pay for it. Mergers and acquisitions are cyclical and timing is a very important consideration. Basically, a business is worth some function of its profitability. It could be a multiple of earnings or revenue. It could be a calculation based on cash flow. There is no “cookie cutter” approach to determining value. Sales and earnings growth are key factors in obtaining maximum value. It is crucial that the business continues to grow during the sales process.
Why do I need a broker/advisor?
Most business owners will sell one company in their lifetime. It is important to keep doing those things that have made the business successful and attractive to potential buyers. A seasoned merger and acquisition firm is in the “business of selling businesses”. A reputable and experienced merger and acquisition firm has excellent relationships with the industry buyers; understands the valuation process and what can maximize a company’s worth; and has the technical knowledge and experience necessary to structure the most beneficial transaction for a business owner. In most cases an experienced broker will obtain value for a company substantially greater than what a business owner could get himself or herself.
What should I expect during the process?
The first thing a business owner must do is assemble a team of professionals to represent his or her best interest. This team should include someone within the company that is very familiar with the financial and operational aspects of the business. Additionally, the team should include an attorney and accountant who can evaluate a potential offer and negotiate favorable terms in the purchase agreement. A merger and acquisition company should also be chosen to represent the business owner to facilitate the transaction and contact the buyers who are paying the most for companies in the industry.
How is a deal structured?
There are many ways in which a deal can be structured. The first question is what type of organization is the selling company. Is it a ‘C’ or ‘S’ corporation?
The type of organizational structure will determine whether the broker must pursue a stock or asset transaction. Other considerations are what debt must be satisfied with the sale; what guarantees might be expected by the buyer; whether an earn-out is feasible; or whether the business owner will consider taking stock instead of cash or receive notes as part of the transaction. The bottom line is that a business owner must outline his or her goals before selling and have a deal structure to meet those goals. A competent team must be assembled to ensure the best possible transaction is structured.
What about tax consequences?
The structure of the transaction will determine the tax consequences. There are many questions to be answered before the tax consequences can be determined. Each transaction is different and each business owner will have unique issues to complete a successful transaction. It is important to have a knowledgeable team on your side to structure a transaction to minimize the tax consequences and maximize the proceeds.
Paragon Ventures does not provide tax advice or taxation guidance. Consult with your CPA or professional tax advisor on all taxation issues.
What differentiates Paragon Ventures from other advisory firms & brokers?
In a few words: Professionalism, Persistence, Passion and Expertise. Paragon Ventures is an experienced merger and acquisition firm with long and deep experience in the healthcare sectors. We have owned, operated and sold our own healthcare businesses. We have many relationships with industry buyers and have an in-depth knowledge of how each buyer prefers to structure transactions. We use this to our benefit when negotiating on our client’s behalf. We know what propels valuation and the negotiation points to enhance it. Our team helps you to anticipate hurdles and solutions to keep your transaction on track. We have a tax attorney and certified public accountant on staff to assist our client’s professional team and ensure a smooth acquisition process.
During the process, our team along with a principal of Paragon Ventures will work directly with the business owner and his or her team. We are available 24 hours a day and our clients have our business, home, and mobile phone numbers. Every client is important and we work diligently and aggressively until their transaction goals are met.
Paragon Ventures has represented and successfully closed over 200+ healthcare M&A transactions representing over $1.4 Billon in healthcare revenues. Our references are available upon your request.