12 May Around the Web: A Week in Summary
A recently published Divestopedia article entitled “Key Concepts for Successful Deals” explains the most important concepts in strategizing an exit, recapitalization, or acquisition. These options are all ways in which owners can create liquidity for themselves and their shareholders, with each having its own unique benefits.
Exits can fall into either of two categories: full or partial. A full exit is when the owner liquidates his or her position and leaves the business to an already-chosen successor. A partial exit results in an owner retaining minority ownership after selling their majority stake. Either type of exit can benefit owners and shareholders through diversification of assets, minimization of risk, and avoiding dilution, among others.
Recapitalization usually occurs when owners want to increase debt in order to get distributions, dividends, or the purchase of equity.
Acquisitions are a little more complex, as they involve the addition of people and resources in sometimes months-long processes. From finding a target company to buy to assessing the value of the acquisition and more, there are a lot of important steps that need to be taken to ensure a successful deal.
A recent article published on VRBusinessBrokers.com entitled “Entering Business Ownership” outlines the process and steps of getting into the owning and running of a business. Although taking the step into business ownership is a big decision, there are more businesses for sale today than ever before and now is a great time to jump in.
Ensuring that all of the appropriate elements are present as well as making sure the business is priced right are two of the most important and valuable steps of the transaction process.
A recent Axial Forum article entitled “Take Customer Due Diligence to the Next Level – Here’s How” identifies revenue growth as the majority driver of new value growth after a business transaction. The article outlines the vitality of due diligence within both the overall market and the customer base. One huge factor in this process involves customer due diligence, or the exploration of customer relationships with the business that is being purchased. This typically includes customer feedback, typically through interviews or surveys, and helps to educate potential new owners on things like customer satisfaction and loyalty, risks and opportunities, market growth outlook, market trends, and more.