Palm Tree LLC’s Post

I'm excited to share my latest article published in Mergers and Acquisitions - themiddlemarket.com: “What Business Owners Should Do When They Can’t Sell” From exploring alternative deal strategies to enhancing business value, this piece offers actionable insights to navigate complex situations effectively in today’s M&A market. Additionally, I highlight how we creatively assisted a founder-owned business in achieving several key objectives earlier this year. Read it here: https://lnkd.in/gUYYqb57

Despite decreased activity around mega deals, the lower middle market is still very active. Business owners have several strategic pathways and transaction types they can consider to maximize value now, even if they want to delay an ultimate exit. Alternate options like seeking growth financing, refinancing existing debt, or a dividend recapitalization can fine-tune a business while the M&A market is less than ideal, potentially boosting valuation and bringing long-range benefits. https://lnkd.in/eakgifie #REAG #growthmindset #mergers #business #acquisitions #lowermiddlemarket #investmentbank

For baby boomer business owners considering transitioning ownership, the current economic landscape might seem daunting. However, there are several strategic options to explore that can maximize the value of your life's work while still allowing you to maintain control and flexibility. Rather than rushing into a full sale during turbulent times, consider seeking growth capital to expand your company through acquisitions or new initiatives. This can increase market share, boost profits, and make your business more attractive to potential buyers when conditions improve. Alternatively, a refinancing or dividend recapitalization can provide an injection of cash without giving up equity, allowing you to take some chips off the table. These types of transactions require careful planning and execution with experienced professionals like investment bankers and specialty lenders. But they offer a way to fine-tune your business, positioning it for an eventual sale on your terms once the M&A market bounces back. The key is being proactive to take advantage of opportunities amid the uncertainty. The goal should be enhancing your company's value and optionality over the next few years until the timing is ideal for your ultimate exit. With some creativity and the right partners, you can chart a course that protects the legacy you've built while setting yourself up for maximum return down the road. https://lnkd.in/gkBcaHDR #REAG #growthmindset #mergers #business #acquisitions #lowermiddlemarket #investmentbank

For baby boomer business owners, the M&A markets might seem hard to read, but what remains constant is that quality businesses remain in high demand and the lower middle market is still very active. Work with REAG to understand and explore your options – like raising growth capital for acquisitions, refinancing debt, or doing a dividend recap to cash out some value while keeping control. It'll strengthen your business and position you for a bigger payoff when you're ready to exit. https://lnkd.in/e6HUqpeS #REAG #growthmindset #mergers #business #acquisitions #lowermiddlemarket #investmentbank

An interesting US centric (but globally relevant) read on the types of firms making acquisitions in wealth management. #growth #expansioncapital #wealthmanagement #partnership #alignment #consulativecapital #growthacceleration https://lnkd.in/gCetDpNy

For sell-side parties considering a merger or acquisition deal, Riveron experts Robert Bernadier shares insights with Smart Business, including the importance of working with advisors focused on the seller's intended outcomes. Read the full article: https://lnkd.in/efq3kstH #InTheNews #RestructuringAndTurnaround #TransactionServices #MandA #DealInsights

NBIO? LOI? Term Sheet? Plenty of different options but what are their differences and which one should you use? We get asked this a lot. So I decided to write an article on it and give you access to my preferred Letter of Offer which works and you can download for free! If you are looking at acquiring a business then I would suggest this would be worth a read and a download! Let me know your thoughts! #acquisitions #privateequity #mergers #sme #searchers #searchfund

In the complex world of mergers and acquisitions, one question often stands out: How do you finance the deal? Our latest blog post from si2capital delves into the diverse landscape of acquisition financing. From traditional bank loans to innovative mezzanine financing, we cover the spectrum of options available to help you make the most informed decision for your business's growth. Discover key insights on: Balancing control with financing needs The pros and cons of various financing methods Tailoring your financing approach to your company’s unique needs Whether you're a seasoned player in the M&A game or considering your first acquisition, understanding your financing options is crucial. Dive into our guide to navigate your way to a successful transaction! https://lnkd.in/gaRNmPMZ #MergersAndAcquisitions #BusinessFinance #AcquisitionStrategy #CorporateGrowth #si2capital

Insightful post from John Carvalho from Divestopedia on how buyers financing mid-market acquisitions. John provides a few examples of $20 - $50 million transactions (enterprise value) done by strategic acquirer. John highlights a few key points on goodwill. Capital asset transactions probably have little to no goodwill since the capital assets will provide future earnings that the buyer is purchasing. Although there may be intangible benefits of the strategic acquisition, the purchase price for capital assets transactions is essentially for the future earnings of those capital assets. A couple of other interesting things from these examples. (1) Seller's Note when purchasing a company on future earnings without net tangible assets. This means the purchase price and future earnings is based on growth and intangible value of the business (brand, customer lists, patents/IP, etc.) and/or goodwill built by seller. To help bridge the gap and future earnings risk, seller's note helps finance the transaction. John's quote in the article is very insightful: "There is a strong correlation between the amount of goodwill present and the seller’s financing required to acquire a business. In other words, if your company has more goodwill, expect to be asked to provide more seller’s financing." (2) Working Capital can be a significant component of the purchase price. Two deals had working capital roughly at 20% and one deal at 10%. This is significant to the overall purchase price. I think working capital is something that should have more diligence on, especially for smaller companies that do not get reviews or audits done and have less emphasis on accruals and more emphasis on cash in/out. This means the working capital can fluctuate significantly by the time closing happens. The article goes into more detail on these items.

During periods of market turbulence, it's common to lose focus on the crucial factors: How are your company and personal circumstances evolving? Ironically, the optimal moment to sell frequently arises when you're least inclined to do so, irrespective of external developments. In 2022, a number of potential sellers hesitated to list their businesses for sale due to the upward trajectory of interest rates. Nonetheless, the upswing in interest rates had negligible effects on the valuations of companies involved in transactions below the $50 million threshold, as a historic abundance of both debt and equity capital was accessible to prospective buyers. https://lnkd.in/eTmFnpvn #entrepreneur #REAG #mergers #acquisitions #lowermiddlemarket #investmentbank