“When selling or buying a company you need a strategic ally; someone that is committed to partnering with you as business principal…”
CentrePoint (CPI) looks at your business goals as part of a complete value solution and as such we offer comprehensive M&A brokerage services for both buyers and sellers.
CPI performs an opinion of value, marketing (for sellers) and searches (for buyers) with confidentiality and negotiate/facilitate the transaction process to a successful closing.
We represent both sellers or buyers to facilitate their longer term plans of either expansion or succession. For services in advance of a sale, see Expansion Management.
Our goals are direct:
- Understand & Enhance Value for sellers
- Quantify & Minimize Acquisition Risk for buyers
Perform an Opinion of Value
CPI bases our opinion on Market Data (the most common approach to estimating value). Once we calculate your EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), we will apply a comparable multiple of your revenue value based on your industry, and similar transactions gathered from market data.
CPI looks at the following Value Drivers (the areas that all buyers look at in order to determine the value and risk that a seller should understand in valuing a business):
- How “owner-centric” is the business? i.e.: Does the company have a management team in place that runs the business, or is the business primarily run by the owner?
- How complete are the financial statements? Are statements reviewed, compiled and audited?
- How progressive and efficient is the technology being used by the business, both internally from an automation standpoint, as well as from a marketing and sales standpoint?
- Is there a sales staff?
- Is there room for added efficiency?
- Is there marketing plan based on definable data?
- Has operating risk been minimized?
CPI is Value Driven; committed to making specific strategic recommendations that drive value for prospective buyers and minimizing acquisition risk.
Please refer to Expansion Management for additional details on our value added processes.
Business Marketing / Search
CPI offers a confidential, comprehensive marketing / search process; that is, a custom designed plan built on the unique characteristics of each business, to sell / buy quickly, efficiently, and at maximum value / lowest risks. Through our partnership philosophy, we are committed to being your strategic ally throughout the entire transaction process.
- Opinion of Value / Search Agreements allow us engage as your committed representative and partner; we will gather all the necessary information needed to write the appropriate marketing pieces/collateral used to market/search for your company.
- Technology Used for Marketing & Search Deal Types; we use all major industry website outlets to get maximum exposure for your business.
- Tools & Technology are Used to Search the Internet for targeting companies that are the best strategic fit for your company's new endeavor or tuck-in.
- A Network of Corporate Relationships that lead to the inner circle of the M&A business; gaining exposure for your deal that only our CPI professionals can provide.
- SWOT (Strengths, Weaknesses, Opportunities and any Threat) analysis is done on all deal types to continually insure that our clients are in position for future success.
Transaction Process - Deep Dive Example as Seller
CPI focuses on the ultimate exit strategy by facilitating the entire process from end to end; we develop a target list of buyers and a methodology for marketing to these buyers, depending on your business and goals.
Buyer Types
- Financial buyers that are primarily interested in achieving a return on invested capital.
- Strategic buyers that view the acquisition as one that will enhance their business by expanding their market and/or operating capabilities (other companies and/or Private Equity Groups fall into this category).
- Owner/operators who are looking to acquire a business to run to make a living.
- Our internal database of buyers including individuals and investors.
- A subscribed database of over 2,500 Private Equity Groups.
- Research from subscribed databases and internet searches that allow us to develop possible strategic buyer candidates.
- Posting a generic confidential description of the top business brokerage websites to which we subscribe and which buyers from all over the world view.
Buyer Vetting
- Interviewing (in person or over the phone)
- Non-Disclosure Agreement
- Business Financial Strength
- Confidential Information Memorandum (CIM)
First Steps
- Schedule an introduction
- Call / in person meeting between the seller and prospective buyer.
- Site visits after hours or whenever you are comfortable showing the business.
- CPI representative is always present as a facilitator.
- Facilitation
- CPI works toward agreements by getting thoughts in writing; a non-binding Letter of Interest or Intent (LOI), in which the basic terms of a transaction are outlined, including:
- Purchase price
- Terms and method of payment
- Training and consulting agreements
- Non-compete agreements
- Any other critical issues that must be dealt with in the transaction.
- CPI discusses the specifics with you, makes recommendations, and continues to negotiate until an offer is accepted.
- CPI works toward agreements by getting thoughts in writing; a non-binding Letter of Interest or Intent (LOI), in which the basic terms of a transaction are outlined, including:
Closing
- LOI (Letter of Intent) or Offer is Accepted
- Buyer due diligence – 30 to 45 days – CPI requests a reasonable and appropriate due diligence list from the buyer for the business review of:
- Bank statements
- Copies of leases
- Contracts with customers and suppliers
- Any other documentation relevant to the negotiation process.
- Seller agreement not to negotiate with any other party (CPI continues to field buyer inquiries for seller protection).
- Buyer due diligence – 30 to 45 days – CPI requests a reasonable and appropriate due diligence list from the buyer for the business review of:
- Draft of the Purchase Agreement and other documents necessary to close (in some cases, it may be more appropriate for the seller to generate a purchase agreement).
- Buyer and Seller Attorney Review and closing date can be finalized. Typically, from the time of an offer to the closing takes between 60 and 90 days.
In this example, CPI is representing the seller and working with the buyer every step of the way. Contact us today to Value Your Company.