Characteristics of SUCCESSFUL Middle Market Transitions

  • The sale of or investment into the company when relative prices for private companies are high.
  • A transaction or investment structure that results in low taxes overall; and the least taxes paid by the business owner.
  • Bullet-proof due diligence: the price on the term sheet is the price at closing.
  • A thorough and careful identification of potential investors or buyers.
  • A period in which company performance is sustained over the period in which in the investment or sale takes place.
  • A company that has been structured with a strong continuing management team that inspires new investors with confidence in the future profitable growth of the company.
  • Strong accounting and control systems that result in a high level of integrity and build the confidence of all concerned.

Characteristics of Middle Market Transition Failures

  • An attempt to sell a company when the quality of earnings is poor or suspect.
  • Erosion or shrinkage of a purchase price because of poor tax or estate planning.
  • Perception that the business owner’s involvement is the source of the business success.
  • Weak or non-existent management team.
  • Financial statements that have been prepared for internal eyes only, that are not in GAAP format and that will not withstand due diligence.
  • Investment advisors who are not capable of structuring and executing an investment strategy for large amounts of proceeds.
  • Financial performance that deteriorates in the midst of the investment or sale process.

Contact Us

If you, or a business owner you know, is contemplating a liquidity transaction in the future and would like to learn more about the FOCUS Wealth Transition Advisory service, please contact your local FOCUS Partner.