What Qualifies A Business Sale as a Merger, Acquisition or Traditional Transaction?
The sale of a business through the Transworld Business Advisers of Indiana mergers and acquisitions department Is decided by key factors such as size, income and valuation. Businesses for sale qualifying to be represented by the M&A Department usually meet specific thresholds.
The Transworld Business Advisors M&A Department will work to evaluate the best approach for those companies with earnings before interest, taxes, depreciation, and amortization (EBITDA) of more than $1 million.
Other business features that would qualify to be represented by the M&A specialists at Transworld include:
Ø Businesses that are considered too large for an individual buyer to buy using conventional financing options. Companies that have become so successful that the annual earnings are exceed one million dollars and usually need to be absorbed through a merger or acquisition by a larger enterprise. That is not to say that there are individuals who look to buy large successful businesses to add to their portfolio, but realistically they are rare.
Ø Businesses that are key players in industries that are undergoing consolidation are prime targets for larger companies in the same or ancillary industries through a merger or acquisition.
Ø Businesses that are growing so rapidly that they do not have access to enough capital to support production are also practical merger and acquisition targets for larger players in the same industries.
There are other scenarios when the experts in the Transworld M&A Department can structure customized transactions. Owners who have grown a successful business and want to leave the day-to-day operations or have a practical exit strategy when the time comes should also consider a meeting with the Transworld M&A Professionals.
Pursuing the sale of a company through a merger or acquisition can include keeping an equity stake in the growing company. It could also be structured as a retirement plan for the future.
Defining the Terms
The term mergers and acquisitions are often used as a singular phrase. Although they are similar types of business transaction relating to the sale and purchase of businesses the terms are specifically different.
The United States Small Business Administration (SBA) offers a simple definitional distinction between mergers and acquisitions, “Mergers and acquisitions are similar but have a few major differences.
Mergers combine two separate businesses into a single new legal entity. True mergers are uncommon because it’s rare for two equal companies to mutually receive help from combining resources and staff, including their CEOs.
Unlike mergers, acquisitions do not result in the formation of a new company. Instead, the purchased company gets fully absorbed by the acquiring company. Sometimes this means the acquired company gets liquidated.”
For the business owner looking to sell all or part of his private equity company, the M&A Experts at Transworld will work diligently to achieve the best value on a business sale.
Partner with the Transworld Merger and Acquisition Professionals
Don’t go it alone. The Transworld M&A experts know when, how and where to find the right situation for large private equity business transactions. Contact the M&A team today to discuss everything there is to know about successfully achieving a workable merger or acquisition for your business.
Services provided by the Transworld Business Advisers M&A Team include:
Ø Understanding your goals
Ø Reviewing the options offered by a Merger, Acquisition, and Traditional Transaction
Ø Working towards a proper Valuation
Ø Creating a Strategic Marketing Plan and execute a multi-faceted marketing approach which includes meeting with private equity investment funds and buyers
Ø Meet with potential buyers, negotiate the transaction, perform due diligence, and close the deal
From the first thoughts about selling a business to the closing deposit, Transworld Business Advisers make it happen.