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MERGERS & ACQUISITIONS

Sales and Purchases of Companies

The term mergers & acquisitions ("M&A") is often used to refer to the sale or purchase of a company. While this may accurately describe a large number of transactions, other deals involve the divestiture of a single division or the sale of intangible assets like the sale of the intellectual property to a novel, proprietary molecular structure. No matter the size of the transaction, two fundamental issues must always be addressed - Valuation (what is the investment worth), and Financing (how will it be funded - cash, seller financing, stock, earnouts, etc.).

Our partners have helped clients with over 50 successful M&A transactions in the industry. Valuations are highly subjective and can lead to very different assessments by the buyer and seller. Given our intimate involvement in prior transactions, we have been able to convince sellers that certain valuations are in their best interest and cannot be achieved otherwise than the transaction proposal at hand. When representing sellers in the middle market, we are able to negotiate even with the largest and most active buyers in the industry on eye level. This ability has helped us to negotiate transactions on a one-on-one basis with the best possible buyer as well as in auction environments. We have been able to pinpoint ideal transactions without necessarily shopping transactions on a broad basis and potentially compromising confidentiality. 

 

Equally, the structure of financing is limited only by the creativity of the parties involved. As a result, neither valuation nor financing can be approached casually. Each requires a specific set of skills that become polished only through experience and industry know-how.

Partial Sales and Other Early Departures

At some point in the life of a private company, one or more shareholders will seek liquidity. The resulting divergence in objectives can create unrest that in some cases may impact corporate performance. A simple solution would be a buyout of the divesting owner, however, most companies lack sufficient cash flow to finance it. Complicating matters further, raising external capital can be both time-consuming and challenging. The challenges that face shareholders warrant retaining a professional advisory firm skilled in valuations and negotiations. The partners at Conexus Capital Advisors have substantial experience working with shareholder groups to develop succession plans and formulate liquidity options. Given the number of transactions we advised on in your industry, we have become an authority in evaluations and in assessing what is realistic and achievable with both strategic and financial investors. We can help buyers and sellers overcome many of the pitfalls, establish realistic expectations, and find a middle ground acceptable to all parties involved.