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Intelligent Advice Delivered With Integrity, Honesty And Above All, Loyalty To Our Clients.

What Is My Company Worth?

How buyers or investors value companies varies greatly depending on many factors including the company’s sector, its stage of development and business model. Internet companies, for example, are valued completely differently from consumer businesses. Generally speaking, for privately held mid-market knowledge-based businesses, buyers and investors consider the values paid for recent comparable companies with both revenue and earnings multiples being important. For earlier stage companies, revenue synergies with a potential acquirer are very important and can be the principal value driver. For companies with a subscription revenue model, free cash flow is often a more relevant metric than EBITDA. Prior to initiating any transaction process, it is important to have a realistic view of the current value of your business. Broadstone’s professionals would be pleased to meet with you, your shareholders and your Board, at any time, to provide our advice on current market values.

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How Long Does It Take To Get My Company Ready For Market?

Over the last 30 years, Broadstone professionals have a well-developed process for reading your business for market. Given our strong industry focus, Broadstone professionals can get up to speed on your business quickly. Typically, the process takes anywhere from 4 – 6 weeks to complete our initial due diligence review, to identify and resolve any hurdles to completing a successful transaction, to identify potential buyers or investors, to review value and to prepare any necessary marketing materials to be used in the process.

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How Do We Determine Who Is The Right Buyer For Our Business?

While it is important to conduct a thorough review of the landscape of possible buyers, Broadstone does not favour a wide auction approach to marketing as it leads to confidentiality breaches, can create the impression that the company is desperate and does not lead to obtaining best value for the company. It has been our experience that with up-front research and with preliminary “no-names” conversations with potential buyers, a company can determine who the most logical group of buyers are. In addition, if you intend to approach both strategic and financial buyers, you need to develop a plan that takes this into consideration as strategic and financial buyers differ in their approach. We take a systematic controlled approach to marketing that best protects the company and leads to the highest value that can be obtained in the market at that time.

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What Can I Expect During Due Diligence?

Due diligence requires extensive disclosure of a company’s confidential technical, financial and operational information and a substantial time commitment for both parties. In today’s M&A environment, transactions are becoming even more scrutinized by strategic buyers. A buyer’s stakeholders and key decision makers are involved earlier in the process. While this has certain benefits including making issued Letters of Intent more reliable today, it also has resulted in adding more time to the marketing process and demands for access to more of your confidential information up-front i.e. ahead of the Letter of Intent. Broadstone works with its clients to ensure that the due diligence information is accurate, consistent and provides the selling shareholders comfort with the representations they must later provide to the buyer. In addition, we provide guidance on what confidential information is appropriate to be providing and at what time during the sale process.

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How Much Of My Time Should I Be Prepared To Invest In The Sales Process?

While our objective is to do as much of the “heavy-lifting” required throughout the process to enable you to continue running your business, you will be very involved in the process and should plan accordingly. During the pre-marketing phase, Broadstone will prepare all of the marketing materials, the buyers list and marketing strategy for you to approve. Once the marketing process commences and Broadstone has determined that a party has a bona fide interest in pursuing discussions, you will be involved in conference calls and meetings. Post Letter of Intent your involvement will become more significant through final due diligence and negotiation of the binding purchase agreement.

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How Do You Reach Potential Buyers Or Investors?

Over the past 30 years, Broadstone professionals have established relationships with many buyers throughout North America and abroad. While we value these relationships highly, we believe that it is equally important to be able to effectively articulate the value of our clients to a potential buyer. In addition, often times, the value drivers among interested buyers differs requiring different “sales pitches”. Broadstone has extensive experience in helping to position a smaller business to a much larger company, communicate its potential value to each potential buyer and accessing the right people at the right level within the organization.

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