Buyside M&A Advisory

Unlike what most M&A advisors will tell you, the right answer is not always to “sell now.” We understand the significance of monetizing your business; it is a major life event and we at PHG don’t take that responsibility lightly. We take a consultative approach in helping owners uncover the right path forward, centered around genuine discussion and conversation.

We provide our thoughts and views as it pertains to several key elements to consider, including market timing, the state of a particular industry, valuation considerations, exit planning, individual goals, desired time to stay with the business, family dynamics, growth levers, and specific company nuances that may lend itself well to a near-term sale or not. We enjoy speaking with owners on this topic and providing our insights in hopes of helping an owner make the most informed decision, even if they are not in a rush to do anything.

Doing right by owners is the lifeblood of our business and relationships are often formed years in advance of selling.

Your role going forward will largely be dependent on what you want it to be. In all cases, a private equity firm will want owners to stick around for a transition period of at least 6-12 months so there is no sudden shock to the system. From there, it depends on personal desires and goals.

If you are motivated to continue to run your business, you can remain the leader with a go-forward salary and can keep skin in the game/ownership through rolling over equity that can generate a large ‘second bite of the apple’ upon a subsequent sale of the business. If you plan to retire or focus attention elsewhere, a private equity-backed buyer can help you put in place a succession plan to maintain the legacy of your business.

By and large, your employees and brand will remain intact. The stigma around private equity layoffs to increase the bottom line has often been sensationalized and typically does not apply in the middle market, where recruiting and retaining talent is paramount. In many cases, employees are better off post-sale as their pay stays the same (or increases) and they often receive enhanced benefit packages.

In terms of your brand, a private equity firm will look to maintain the legacy of your brand throughout your community, as that stellar reputation is a big piece of what they are paying for.

A buyer will want to know several things before putting forth an offer, including but not limited to: revenue trends over time, service mix of revenue, profitability / margins, growth strategy, customer retention and concentration, organizational structure, employee count / compensation, brand reputation, and owner plans going forward. At PHG, we can work with owners to make sure they are showcasing their business in the best possible light and not leaving money on the table through a lack of preparation.

As a buyside origination and advisory firm, PHG can work with owners on exit planning, diligence preparation, and ultimately connecting you with reputable potential buyers without wasting your time with inexperienced parties, opportunistic tire kickers, or undercapitalized buyers. We truly believe in a quality-over-quantity approach as it pertains to buyers.

We take confidentiality extremely seriously and view it as a key part of the value proposition that we provide as a buyside firm. We know that the topic of M&A can be very sensitive internally within a company and always operate with this in mind, setting up a contact protocol that that protects your privacy. Unlike sellside brokers, we don’t put businesses on online listing websites, which increases the risk of competitors or employees finding out, but rather focus on finding the right fit economically and culturally through knowing the industries we operate in inside and out.

To successfully execute a sale, you will need legal representation from an experienced M&A attorney and involvement from your CPA / tax attorney to understand the tax consequences in a sale.