The MAE Group -Investment Bankers

Solutions for the

small business world

7) Should I ask my accountant to find a buyer for my company?

While your accountant is an important advisor, he or she will not be an expert in marketing companies, creating a competitive auction for your company, or negotiating the most favorable terms on your behalf. Also, many accountants do not want to lose their clients' business and, therefore, may have a conflict of interest in helping you sell your company.

8) Will a valuation sell my business at the highest price?

No. What you need to sell your company for the highest price is a "Sellers Book" to showcase your company's uniqueness. These tools enable us to obtain the highest price by establishing a competitive bidding process for your company.

9) How are credible growth and earnings projections (pro forma) developed?

Realistic growth projections are based on your company's historical performance, current trends and the uniqueness of your business.

10) Will a buyer accept pro forma in excess of 5-10 percent of historical results?

Not unless you are a growth company in an emerging industry, or there are extraordinary conditions that would cause demand for your products or services to surge going forward.

11) Could I receive an all-cash deal for my business by projecting aggressive growth?

Pro forma showing spiraling growth rates raise suspicions rather than cash from prospective acquirers.

12) What weight do buyers place on future projections vs. historical financials?

Our experience is that buyers place more weight on recent performance than on projections. However, buyers are always looking to a company's future expansion opportunities.

13) Do buyers buy private companies based on EBITDA (Earnings before income taxes depreciations and amortizations) or Book Value?

Generally buyers evaluate a company's prospects on the basis of recent results and on a multiple of EBITDA that is common for that industry at the time of sale. Book Value is not an accurate reflection of a business' worth in the marketplace.

14) Do we give our client references?

This information is confidential. We receive a number of inquires on a weekly basis and it is not fair to our funded clients or affiliates to have them interviewed. Our contract functions are made on the condition of confidentiality.

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