Expert Advice on How To Sell Your Middle-Market Company

About the Episode

Listen in for expert advice on selling a business, geared toward sellers of middle-market companies. Investment banker and author of Mergers & Acquisitions For Dummies, Bill Snow, shares advice, tips, and insights from over 30 years of selling companies. He gives examples of adjustments that should be made or avoided, discusses the most common mistakes sellers make, explains why a cash flow statement is critical, covers the four methods of valuing a company, shares how an investment banker helps in negotiations, and his top piece of advice for all sellers.

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In this Episode

1:40 What does Bill mean by the phrase that “adjusted EBITDA has become a Frankenstein’s monster”?
4:01 What are some examples of adjustments that are far-fetched?
5:19 What types of adjustments can be made to financial statements when calculating EBITDA?
13:44 How beneficial is it to have a clean profit and loss statement without any adjustments?
15:39 Which is harder – buying a company or selling a company?
19:03 What is the most common mistake sellers make in the overall sales process that could be prevented?
22:53 Is there a distinction in demand between private equity firms and strategic buyers? Do they each have a minimum threshold that must be satisfied in terms of their requirements?
27:25 What is the most challenging aspect of selling a company? Specifically, at which stage of the transaction do sellers get particularly hung up and experience emotional difficulties?
31:33 How do most investment bankers structure their fees? What do they typically charge?
37:45 Why is the cash flow statement so important?
43:53 What are the four common methods of valuing a company?
49:32 Which documents are typically provided before accepting a letter of intent (LOI)?
53:18 What is the top piece of advice to all sellers and middle-market business owners?

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Acronyms or Terms Used in This Episode

  • Amalgamation – The merger and acquisition of several smaller companies into a few larger companies
  • EBITDA – Earnings before interest, taxes, depreciation, and amortization
  • Teaser – A brief document that does not list a company’s name but does give some high-level details about the business to attract potential buyers
  • CIM – Confidential information memorandum – a detailed document that identifies a business for sale and includes the history, an overview of financials, and key details about the company to let potential buyers decide if they want additional details

Meet Our Guest

Bill Snow

Bill Snow

Managing Director of Knauff & Co.

Bill Snow is an investment banker with over 30 years of experience in the field of mergers and acquisitions. He is known for his extensive experience representing buyers and sellers across a wide range of industries. Bill joined Jordan Knauff & Company as a Managing Director in 2013. Prior to that, he led the investment banking practice at Cambridge Partners & Associates and advised middle-market business owners and executives on sell-side and buy-side transactions at investment bank Kinsella Group Inc.

In addition to his work in M&A, Bill has authored three books, including Mergers & Acquisitions For Dummies (Wiley Publishing, Inc.). He is a sought-after speaker across the United States and beyond, with international lectures in Malaysia and the United Arab Emirates. Bill holds an MBA and a BS in finance from DePaul University, and he is a registered Investment Banking Representative with FINRA, the Financial Industry Regulatory Authority.

Location Location: Chicago, Illinois

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