Category Archives for "M&A Update"

M&A Update for 2020

While 2020 was extremely challenging, the introduction of vaccines should provide optimism that both our health and the economy will improve in 2021. COVID-19 had an impact on M&A activity as the pandemic took its toll on the nation. However, as the year closed out, the total impact on M&A activity was not as dramatic […]

Read more

What is a Letter of Intent (LOI) in M&A – and Why Use One?

Letter of Intent (LOI) M&A

What is a Letter of Intent (LOI) in M&A? The Letter of Intent (LOI) in M&A is a written, non-binding document which outlines an agreement in principle for the buyer to purchase the seller’s business, stating the proposed price and terms. The mutually signed LOI is required before the buyer proceeds with the “due diligence” […]

Read more

Q2 2018 M&A Update: Selling an Austin Icon, A Case Study

Selling an Austin Business

Back in 2005, our firm was engaged by the founder of a well-known Austin business that had been in existence for over 30 years. The company had revenue in excess of $10,000,000, an established brand, and a total of 75 employees. They had been very profitable, debt free, and the owner (then 70) owned the […]

Read more

Q3 2017 M&A Update: Who Will Buy Your Business?

Businesses with enterprise values above $10 million are primarily sold to institutional investors. Those acquirers fall into two broad categories: financial and strategic. This article discusses the four most common types of financial buyers, sources of funding, and investment horizons.Private Equity Group, or PEG. A private equity group, or firm, is an investment management company […]

Read more

Q3 2016 M&A Update: Earn-outs: Uses, Pitfalls, and Opportunities

Earn outs

What is an “Earn-out” as it relates to the sale of a business? An earn-out is a contingent payment agreement whereby the buyer agrees to pay additional money for the business upon the attainment of certain post-closing performance targets. An earn-out is a financial tool used to bridge the gap between the seller’s price expectations […]

Read more

Q2 2016 M&A Update: Favorable Market

We are in an extremely favorable market for business sellers. Buyers have abundant capital to deploy, interest rates are low, and the economy in Texas is doing well – even with the pull back in oil prices. However, the best advice to a business owner that is thinking of an exit, is to “take control […]

Read more

Lower Middle Market Provides Bright Spot in Slowing M&A Climate

Firms that focus on the smaller end of the market, including Audax Private Equity, boasted success in 2015, says Audax MD Jay Jester.Here’s an excerpt from a great article on Mergers & Acquisitions:Although the big picture for middle-market M&A may be dimming, there are still lots of bright spots, including the lower middle market – […]

Read more

Q1 2015 M&A Market Update

Predictions for 2015 The January issue of Mergers & Acquisitions magazine reported that 2014 was the best year for the middle market since 2007. It went on to say: “Confidence in the economy, cash on corporate balance sheets, dry powder in private equity funds, low interest rates and high stock prices all combined to create […]

Read more