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Category: Acquisitions – Buy Side

Drafting Proper Purchase Agreements

There are three basic types of purchase agreements related to 90%+ of business acquisitions. Real Estate Purchase Agreement Asset Purchase Agreement Stock Purchase Agreement Obviously, a real estate purchase agreement is just relating to the real estate or land that is being acquired, which is a separate transaction. This will involve 1 or 2 realtors […]

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Buying a Business that is Operational with Inventory

Buying a business that is operational, especially with inventory, has several things to consider. First off, if you are valuing the business with or without inventory, the price can change drastically on a deal. Specifically in the seller’s eyes, they want to cover their costs they paid for inventory. There are two separate valuations you […]

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The Art of a Deal

A deal comes down to two parties agreeing. A seller wants out but wants max value, generally. A buyer generally wants the best deal possible unless they have been on the other side and have a compassion that is rare. Just understanding those two things we are apart in nature. The art of a deal […]

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Arranging a Call with the Seller

Many times, we get requests from prospects to speak with the seller directly. There are three kinds of prospects we deal with, in general, who ask for this request; and there are two lenses which we work from. Obviously if we are representing the seller or the buyer, the approach will be slightly different, but […]

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Benefits and Drawback of Acquiring Businesses

There are obvious advantages and some disadvantages to an acquisition. If you are taking over a good business, you’ll have great cash flow. When buying a business, you are typically buying yourself something that provides a major benefit to you.   Besides the usual profit and/or loss of the acquisition itself, comes the taxes and […]

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Reviewing Financials on an Acquisition

When you are viewing financials of a company, there are five sets of financials you want to take a look at. P&L – You want to take a look at some historical and recent P&L’s where the line items are broken down so you can see what is producing revenue, and specifically what expenses are […]

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Benefits of an Earnout

When you are acquiring a business, there’s two avenues to approach it with. Buy the business outright and get it for a better deal with all cash upfront. Or acquire it at a bigger price with money down and the rest as an earnout. The earnout allows you to acquire a business and stretch payments […]

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Escrow and Closing Information

When acquiring a company and engaging in an M&A deal, complexities may arise based on sophisticated deals. Buying a business can be different than any other transaction you have ever done in your life. A home or property might be the closest thing to it, but it could be the furthest thing from it as […]

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Should I Include a Deposit in the LOI?

When taking place in an acquisition, you will first submit an offer which is generally placed in an LOI. An LOI will include the basic terms of the deal. The most important metrics include price, timeline to close, and details on a deposit. There are a few factors to consider when thinking of whether you […]

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Strong Business Fundamentals to Acquire

A business that is strong is one that has fundamentals that are strong like an oak and have a lot of structural elements arranged in a format that appears like a top down funnel. A good business is like a net that catches lots of prospects and produces small sales and larger size deals. Some […]

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