We are excited to announce that GillAgency has won the International Business Brokers Association (IBBA) Chairman’s Circle Award for 2021. Through dedication, education, honesty, employing ethical practices. Along with setting realistic goals for our clients we were able to achieve this distinction.
We are even more proud of the fact that we received this award during our first year of going independent.
When we decided to go independent we knew the road was not going to be easy. Let’s face it, it’s like starting a new business (unlike buying an existing one with current revenue stream, which is what we do for our clients). But we gave it our all. We made strategic alliances, aggressive marketing on social media and other platforms. getting in front of business owners having multiple calls each and every day with our prospective clients, and most importantly just being who we are.
We thank the IBBA for bestowing this Chairman’s Circle Award for GillAgency. This recognition is not just for us, we want to dedicate this award to our clients who believed in us, trusted us with an extremely important asset in their lives and having faith that we would deliver what we promised we would.
We thank you all.
Hi, I love doing these types of videos. So let’s start with a flashback; here it goes.
We are extremely delighted to announce that we have successfully sold this business and helped achieved our client’s personal goals.
Our client had his business listed with another firm for over 2 years and couldn’t get it sold; not even for $1MM. We were able to not only sell his business but sold it for over 3 times that number.
It did take some time to sell this one. The average time to sell a business is between 6 – 9 months given the market conditions and the business itself. We faced many challenges including finding the right SBA lender who was willing to fund the deal given majority of the business was gov’t contract work; but we did find one and eventually closed the deal with that lender. There were other issues with the attorneys where we personally got involved several times to save the deal and keep the train rolling in the right direction.
Obviously, all the back and forth between the attorneys took extra time and gave pause to the SBA lender as they had to re-evaluate the deal, where we also interjected and showed them the value in them funding this. Not only did we save the deal with the SBA lender, mitigated all the issues with the attorneys but most importantly to us was the fact that we delivered in what we promised we would.If you are looking to sell your business, please do reach out to us so that we can plan your exit strategy confidentially and provide the same service that we provide to all of our clients.
International Business Brokers Association conducted 2022 Q1 Marketpulse survey where 360 M&A Advisors participated, including myself. Here are the results
M&A Activity
Advisors reported that 45% of their engagements terminated without closing in Q1 2022. For the second quarter in a row, this marks one of the lowest termination rates in survey history. Engagements terminate for a variety of reasons, including unrealistic seller expectations, distressed business performance, or other factors that make the business unsalable.
Meanwhile, advisors are also reporting a strong uptick in the number of new clients coming to market in Q1 2022. More than 60% of lower middle market advisors said their number of clients “greatly increased”
Business Value
Businesses with enterprise value of $5 million to $50 million earned an average multiple of 6.0x EBITDA and realized an average final sale price at 107% of benchmark.
Seller’s Market
A seller’s market occurs when demand exceeds supply. There are more interested, active buyers than there are quality deals on the market. In a seller’s market, buyer’s compete in order to win deals. This typically translates to increased values and more favorable deal terms for the seller.
Q1 trends shows an ongoing rebound in confidence since the start of the pandemic. In fact, this quarter shows the highest lower middle market confidence we’ve seen since the start of the Market Pulse survey in 2014.
Time to Close
The average time to sell a small business shrunk slightly, varying from six to 11 months. Of that time roughly 60 to 120 days are spend in due diligence and execution, after a signed letter of intent or offer.
Financing Deals in 2022
On Average buyer’s paid 82% cash at close for businesses bought in Q1, with rest in seller note and around 1-2% in an earn out
We are excited to present a Technology Integrator in Niche Market with 43% ARR for $5MM. This company provides sale/lease/installation of WiFi technology, security cameras and access control in a very niche market. They specialize in designing combined networks for these three services that create long-term single source relationships with their customers.
The company has a great ARR, in the amount of $1MM that comes from the lease and service of the equipment.
The company has been leading in this niche market since early 2000s and has installed over 750 outdoor locations. The company’s network currently has over 3,500 pieces of equipment installed in over 17 states/provinces/territories, supporting approximately 200 locations. Upwards of 5,000 end user customers use the network daily with strong brand in the US, and the Caribbean. They designed a new generation of installation methodology in 2014 specifically for their niche market and as a result have seen tremendous growth and stability.
The company has offices in the Northeast, Southeast and Southern California. With deep partnerships with vendors and contractors the company is able to support business in a variety of regions. The company also has a 7 day/week call center which is located in the east coast and staffed by over 10 qualified support technicians.
This business opportunity has no employees with all personnel working as 1099, rest on demand contractors, very limited inventory and has very low overhead costs.
For more information on this amazing opportunity please visit us at https://gillagency.co
On the market is a Technology Integrator and Digital Marketing Agency for $2.4MM. This technology integrator and digital marketing agency company has three different revenue streams. The three different revenue streams all under one company makes this company a sought-after company to do business with. They employ about 30 employees who specialize in their area of skills. Highly specialized software and marketing professionals who offer high-quality products. And services based on their business knowledge and the use of the latest tools in Information Technology.
With 10+ years of industry experience, this company has painstakingly earned an impeccable reputation for its expertise. And has demonstrated an enduring resilience through the pandemic, as evidenced by a top-line growth of 76.41% from 2019 to 2021. Its three services offering, under one roof has earned them a niche marketing and an edge over their competitors demonstrating the growth capability in this company.
The company was founded in early 2010s by the current CEO. His goal after years of software was to build IT processes that ensure successful delivery of software products. After years in business, the company has built a sustainable, long term business model that offers the company a way to develop software and applications for their ideas, market their ideas, and get talented people to manage the software and IT department.
We represented the sale of this company in October of last year.
Fast forward 6 months we are delighted to announce that this company was sold to a strategic buyer. This engagement was particularly demanding. My clients were going through a personal change and there were a lot of emotions involved. There were challenging times through-out the entire engagement.
After speaking to many highly qualified investors and fielding multiple offers, my clients chose an offer that best met the needs of their company and them individually. One of my client wanted to retain a minority equity stake and the other one was moving on completely. The offer that we were able to negotiate is just that. One of the owners got to keep some equity and the other found a home as an employee with the investor’s parentcompany.
The due diligence was conducted within 30 days as we mandated. But the closing took extra time which was not anticipated. We kept the ball rolling forward and made sure that all parties were aware as to what the current update was. Our clients are extremely happy with the results that they got. And the strategic buyer is very excited to have acquired a very profitable company. Oh, one thing I forgot to mention was that my clients did try to sell the company themselves for few months. But decided to hire me after they were bombarded with inquiries from all over the world from unqualified buyers. We were able to weed them all out with the processes and procedures that we have in place at GillAgency, which led to a successful transaction.
The Confidential Information Memorandum, or CIM, is widely used as a marketing tool when selling businesses. In this article we will discuss what the 5 C’s are of a successful CIM.The CIM is not meant to close the deal for you. It is meant to provide enough salient details to entice key interested parties to engage in the transaction process.
Let’s look at the 5 C’s to include in the CIM.1.Compel the audience
You don’t need to write a novel to compel the audience. It needs to be catchy enough with graphs, charts and such to capture the audience.
2.Convey the facts
Stick to the facts and ensure they can be supported by reliable data.
3.Communicate the story
A well written story about what the business is, how it got started, the challenges, the SWOT analysis and what the future looks like will definitely gravitate towards the audience.
4.Calculate the returns
High level financials should be included in the CIM, so that the buyer can calculate the returns if they were to purchase the business.
5.Capture credibility
A credible CIM includes evidence of relevant analysis around the financials—for example, historical growth run rates, marketing plans, ROIs, new business wins, new product development, key new hires, new contracts won or tangible pipeline opportunities.
I was in Cabo San Lucas, Mexico with my family last week and I got a little sun burned. But the show must go on.
An involved and informed business broker knows what is going on in the market at any given time. Why else would you hire one if he or she lacks that knowledge. An experienced business broker also knows how to value a business and provide broker’s opinion of price.
A business broker should also be able to navigate a business owner through the entire process and be one step ahead of the game. Why does this matter? In order for a business owner to decide if he or she is ready to sell their business, all of the above needs to be considered.
He or she should be able to discuss the business owner’s personal goals, provide broker’s opinion on price by looking over financials, doing research and knowing what is the state of the market. Is it a seller’s market, a buyer’s market or neutral market.
The business broker should also provide the pros and cons of going to market now or when it’s more suitable in the future. This should be done without having a personal agenda and this is where ethics and fiduciary comes into play.
Discuss the steps that are needed to be taken in order for a successful close so that the business owner is aware of what it entails. A business broker should be available to answer follow up questions as they arise in a timely fashion.
As selling a business that the owner has been nourishing and growing is sentimental. The business broker should handle that with care. There are many options when it comes to selling your business. The business broker should lay them all out for you. And that way you can decide if you are ready to sell your business.
There are three business valuation methods that are generally used when valuing a company. Depending on the particular business, one of the method is utilized to come up with the valuation.
The three business valuation methods are asset based approach, the income based approach and the market based approach. The asset based approach is utilized for companies that are asset heavy. The valuation is based on the value of the assets of that particular company. This approach is further broken down into three sub categories. They are the book value, going concern and the liquidation value.
The income based approach is derived by calculating the projected future cash flow and multiplying it by an appropriate discount rate. This approach is usually used for start-ups and IP heavy companies.
The market based approach is the valuation of the company based on what similar companies sold in the near past. An extensive research must be conducted. And an M&A advisor should also leverage his or her experience to come up with the valuation of the company. The valuation is usually a multiplier of revenue or adjusted EBITDA for lower middle market companies. For a free confidential consultation of what your company’s valuation may be, please contact us at https://gillagency.co
It is important to know the clear distinction between a business broker and an M&A advisor. Based on your company’s size and industry you will be able to choose the right professional. Especially when it comes to you exiting and selling your business.
So when we talk about size of your company, what do we mean? Business brokers work with entities that are usually main street businesses, generating $5MM in revenue or lower. M&A Advisor works with entities that are generating $5MM to $50MM or even higher in revenue.
Another clear distinction is that the business brokers are well versed in their niche. They have the resources and knowledge to bring a deal to completion based on their skill set in the main street businesses sphere.
On the other side M&A advisors are accustomed to a lot of complexities that comes with the higher end entities. They also have relationships with strategic buyers, private equity firms, family offices, and holding companies.
Business broker will look for cash flow of the business or SDE, which stands for Seller’s Discretionary Earnings. M&A advisors will work with EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation and Amortization.
Hiring the right team is extremely important in order to spend less time in the marketplace and get the maximum value for your business.
