Summer 2006

10 Ways GMB Business Advisors Adds Value to a Transaction

GMB Business Advisors, a division of Green Manning & Bunch, Ltd., is an investment banking firm focused exclusively on facilitating M&A transactions for lower middle-market companies.

"Pssst! Hey buddy, want to sell me your business?"
Consider the following situation:  You own a lower middle market business (typically, $1-$5 million of pre-tax cash flow). You have been approached by a seemingly qualified buyer who says he will pay "top dollar and close quickly". What do you do? Does it make sense to hire an experienced M&A intermediary to represent you?  Or, should you try to market the business yourself, thereby saving an investment banking transaction fee?

Far too often, sellers try to do the deal themselves, with disastrous results. Either they sell the business and "leave money on the table," or the deal falls apart after 6, 9, or even 12 months, during which time the business loses momentum because leadership has been distracted.

Top Ten Reasons to Retain an M&A Intermediary

10	Keep the buyer honest -- when you are negotiating exclusively with one party, an M&A intermediary forces the buyer to "put their best foot forward" lest we counsel you to take the company to market.
9	Orchestrate a controlled and competitive auction process -- when it's not in your best interest to negotiate with one party (which is most of the time), we will create a competitive auction process to find the "right" buyer at the best valuation from a broad array of strategic and financial buyers.
8	Leverage management's time and resources -- let us run the deal; you run your business.
7	Buyers want us hired -- smart buyers and their advisors prefer to have an experienced M&A intermediary involved. We bring credibility to the opportunity, ensure reasonable valuation expectations, and assist in coordinating the flow of information. We help deals get done, faster.
6	Expertise in marketing the "story" -- we know what it takes to attract the most qualified buyers: growth, solid management, identified distribution channels, customer diversification, etc. You need to market the right story to create top value.
5	Negotiation expertise and experience with various transaction structures -- don't let the old adage, "you name the price, I'll name the terms" apply to your deal.
4	Provide a "buffer" during negotiations -- the seller often keeps an interest in the company post-closing via employment contracts and/or retained equity. Negotiations can sour your relationship. Let an experienced M&A intermediary play "bad cop" on your behalf.
3	Coordinate due diligence -- so you've signed a letter of intent. Is your deal done? Uh, no. If the buyer identifies problems during due diligence -- and they almost always do -- they will either walk away or, more likely, seek to renegotiate the purchase price and terms. We manage the due diligence process to protect your purchase price as much as possible.
2	Provide independent and unemotional valuation advice -- just how much is your business really worth? Valuation metrics in the lower middle-market sector are often underreported, unreliable and inaccurate. According to Thomson Financial Securities Data Corporation, the EBITDA multiple for transactions less than $25 million was a paltry 2.3x in July 2006. Yet in December 2005, it was a robust 5.8x. We focus exclusively in this area.
1	Provide the greatest level of certainty of closing at the highest price -- most people wouldn't think of selling their house without a realtor; why risk a business worth $5-$30 million?

At GMB Business Advisors, we apply experience gained from closing over 150 lower middle-market transactions with an aggregate value of approximately $1.5 billion. Our relationships with a broad array of strategic and financial buyers specifically focused in the $5-$30 million market sector helps us facilitate efficient transactions that meet the personal objectives of our clients.

To learn how GMB Business Advisors can unlock the value in your company, please contact Alan Mayer, Managing Director, at 303.592.4844.