Interested in a professional level career & business?
Working as business intermediary for M&A deals means that you work with firms helping them find suitable private businesses to acquire in industries and of sizes of interest to them. But by doing that you also provide a much needed service for many business owners!
Working with these firms, you can offer private businesses a number of solutions (outlined further below) both as exit-strategies providing liquidity for the current owners but also as a means to facilitate a family-succession plan or their retiring from the business if that is their goal.
There are two very positive attributes of these solutions:
1) There is not any cost to the business owner. Unlike business brokers or investment bankers that charge business owners substantial fees and retainers, the business owner(s) do not have to pay a fee. The firms you work with pay your fee. The business owner(s) keep more money in their pocket.
2) Under most scenarios, the firms can enable businesses to continue, thrive and grow... and perhaps most importantly they can do this where they are, without fear of being shutdown, packaged up and relocated.
Here is a specific example of how a company was recently helped:
The founder of an US northeast based company wanted to retire; he needed to take some chips off the table, turn some of his equity to cash for retirement. But he also wanted to keep ownership and management in the hands of his daughter. He did not want to sell to buyers who would take over the business, move it or bring in their own management team. To accomplish that would require a majority family recapitalization of his company with a partner willing to leave management in place.
The finder/business intermediary introduced the firm they were working with to the opportunity, helped facilitate discussions and the resulting transaction provided liquidity for the retiring founder, while affording his family members meaningful retained ownership, continued roles as the leaders of the company, and an ideal partner to support future growth. This transaction resulted in a $400,000 cash fee to the finder/business intermediary.
This scenario is increasingly common as baby-boomer business owners look to retire from their businesses.
I believe in keeping local economies strong. One way to do that obviously is to keep businesses going and growing where they are currently located. Just as we did above, you can do the same for many business owners ... at no cost and with a resulting benefit to them and you make some nice money from helping the business owner and the buyer.
Here is an outline of the types of solutions that can be provided to business owners:
Companies need capital to grow and reach their next level of success. Without it, many companies face a long struggle of bootstrapping growth through internal cash flow. When an established company that meets investment criteria has significant opportunities to grow their business and the management team to execute the plan we have resources to assist them.
Company owners often seek a recapitalization in order to achieve what may appear to be conflicting goals: the sale of a significant portion of the business to create personal liquidity diversifying personal net worth, while retaining a significant stake in the business to participate in the future growth. Both of these goals are well served by a recapitalization from one of our resources, particularly given many of their track records of helping companies grow.
Family Succession Recapitalizations
In the life of family businesses, there often comes a time when a recap is necessary to transition ownership from one generation of the family to another, to create liquidity and diversification in an estate, and to ensure that the next generation gets their opportunity to run and grow the business. Our resources have an extensive history of successfully navigating family dynamics and achieving the often-divergent goals of different family members.
When incumbent managers have the opportunity to buy the company or division that they run but do not own, they need a partner with the credibility, funding and experience to get the deal done. They want a partner who will treat the manager(s) generously, afford them significant ownership, and serve as an effective partner for growth. Our resources have proven to be a highly effective partner in MBO's of privately held companies, as well as divisions of Fortune 500 companies. Also, management teams and executives could structure and fund their own buy-out or acquisition of the business.
Company owners face profound challenges in the sale of their businesses or divisions when there is need for talent at the most senior levels of management. When asked, our resources have successfully recruited outstanding leadership, enabling this challenging type of transaction. We believe it is important to recruit not only the correct technical talent, but also the right personality who will fit with and respect the company's culture. Moreover, our resources have proven to be outstanding partners to recruited senior managers by sharing equity generously and helping to build value.
One of the greatest opportunities for business owners and equity investors to build value is found in fragmented industries where solid management teams have the ability to grow through add-on acquisitions. Several of our resources have been some of the nation's most active and successful consolidators of industries starting with lower middle market companies. Such consolidations entail partnering with a platform company and backing its owner/operators in the acquisition of several strategically attractive add-on companies. Some of their consolidation projects have grown in profit ten-fold, enjoying significant value creation, particularly given the purchase price multiple expansion realized because of increased size. These resources have demonstrated a healthy balance between the ability and desire to create precipitous growth, and the understanding that sufficient infrastructure and management talent must exist to ensure that the growth is both profitable and sustainable.
Business intermediaries can provide these solutions and benefits to business owners that are looking at retirement or are considering exit-strategy scenarios. You can provide them with choices and options that will not only benefit them but, again, keep their businesses in their community and give them financial partners to help the business remain vibrant and become even stronger contributors to the local, regional and national economy.
You can create a situation where everyone benefits, the business owner, the state where the business is located, the firms you work with and of course make money for yourself.
Learn How to make a $300,000 fee providing solutions to business owners and services to business buyers.
Dennis M. Lowery
Adducent.TV ~ Information & Services to help you start, fund or buy a business.