Lake Street Advisors’ Post

EisnerAmper Partner Cory Markling, CFA was featured on a mergers and acquisitions table of experts panel hosted by Minneapolis/St. Paul Business Journal (MSPBJ). They discuss the current market, negotiating a transaction, tips for business owners, and more. https://okt.to/WsEMfv #mergersandacquisitions #privatemarkets #MarketTrends

As we prepare for a new administration, the buzz around RIA mergers and acquisitions is palpable! Rumor has it advisors are sharpening their elbows for a high-stakes game of corporate chess. Will we have a 2024 acquisition board meet-up next? Check out the insights here: https://okt.to/tAoPl8

Build Better Mergers And Acquisitions With These Four Questions   The M&A landscape has been quite tumultuous over the past year or so. With high interest rates, major geopolitical tensions, global economic uncertainty and a general lack of confidence in the economy, investors and banks are more cautious than ever, and the M&A market is seeing less action.   While investors and companies alike are eager for an upswing, deal-makers can still secure strong, lucrative opportunities by implementing the right strategy and asking the right questions.   https://lnkd.in/egxjWCk4   #cronelaw The Crone Law Group, P.C.

Mergers and acquisitions ignite a spirited competition among potential buyers. Read our article discussing the 5 potential steps sellers can take to tilt the negotiation landscape to their advantage and unlock the full potential of their company's intrinsic value. Read here: https://lnkd.in/ebsk7Sya #investmentbanking #mergersandacquisitions #sellingnegotiations 

Mastering the M&A Game: Beyond the Price Tag Mergers and Acquisitions (M&A) are much more than mere business transactions; they're akin to an artful chess match where strategic foresight and insightful planning are key to victory. In my journey through numerous M&A deals, I've seen firsthand how the right strategy can turn a good deal into a great one. Let's explore what goes into crafting the ideal M&A deal. Understanding Deal Structures: Many view M&A deals as a mere battle over price tags. However, this perception barely scratches the surface. The true intricacy of M&A lies beneath, in the multifaceted structure of the deal. This includes crafting precise payment terms, solidifying strong representations and warranties, negotiating balanced indemnification provisions, and integrating effective non-compete agreements. For example, carefully structured payment terms can influence the post-acquisition integration, impacting both companies' future growth. Core of a Successful Deal: At the heart of a successful M&A deal is the nuanced understanding of the transaction's risk profile, which requires a delicate balance between financial resilience and operational adaptability. Take, for instance, a recent SaaS company deal I spearheaded. We didn't just focus on the price; our strategy encompassed key factors such as ARR growth - a vital indicator of the company’s health and scalability. We also scrutinized incremental profitability, assessing how effectively new customers contributed to the bottom line, which enabled swift scaling without significant capital investment. Moreover, we looked at overall profitability, paying close attention to robust revenue growth and healthy EBITDA margins. Alongside this, we meticulously evaluated the tax implications, cultural integration and aligned the transaction's payment terms, all while navigating through sector-specific regulations. These elements were pivotal in crafting a successful deal strategy. Conclusion: The essence of M&A transcends mere price tags. It's about forging a synergy where the combined entity is exponentially more valuable than its separate parts - a phenomenon I liken to where 1+1 equals more than 2! As we look ahead, the art of M&A will continue to evolve, but the core principle of creating value beyond the price will remain a constant guide for successful transactions. #MergersAndAcquisitions #InvestmentStrategy #BusinessGrowth #DealStructuring #FinancialExpertise #PrivateEquityInsights #CorporateSynergy #ValuationExpert #StrategicPlanning #BusinessAcumen

Wealth Architects continues to be in the media about the expertise we now have in Mergers and Acquisitions. Our industry is changing and knowing how to move businesses together or integrate businesses into our existing culture is just so vital. Our Managing Director, Callum Mitchener speaks of some of the things to be conscious of in this article in Money Management Australia.

Build Better Mergers And Acquisitions With These Four Questions   The M&A landscape has been quite tumultuous over the past year or so. With high interest rates, major geopolitical tensions, global economic uncertainty and a general lack of confidence in the economy, investors and banks are more cautious than ever, and the M&A market is seeing less action.   While investors and companies alike are eager for an upswing, deal-makers can still secure strong, lucrative opportunities by implementing the right strategy and asking the right questions.   https://lnkd.in/edUbNu7w   #cronelaw The Crone Law Group, P.C.

In the mergers and acquisitions arena, speed is crucial. An M&A transaction that moves too slowly often dies on the vine. If a deal drags on beyond six months, it becomes more likely to fall apart with each passing day. In the delicate balancing act of an M&A deal, swift execution is essential to maintain momentum through close. But it’s equally important not to rush through the process and skip due diligence, which can lead to stalls, torpedoed confidence and, ultimately, an empty bargaining table. Here are just a few ways buyers and sellers can speed up an M&A deal so everything moves efficiently and all parties are left satisfied.

As a Business Broker facilitating mergers, acquisitions and divestitures, I often encounter business owners who have misconceptions about how the M&A process works. Myths and outdated conventional wisdom frequently get passed around, creating unrealistic expectations. It's time to bust some of those persistent M&A myths wide open: Myth #1: My Business is Too Small for M&A Truth: Companies of all sizes pursue M&A as an exit strategy or growth play. From mom-and-pop operations to multi-billion dollar conglomerates, no business is too small or too large. Myth #2: I Need to Hire an Investment Bank Truth: While banks do facilitate large transactions, smaller deals don't require their services - or massive fees. Business brokers are better suited for most sale transactions. Myth #3: I'm in Control of the Negotiation Truth: Buyers call the shots - you're just along for the ride. Skilled brokers balance this by creating a controlled auction environment with multiple prospective buyers bidding. Myth #4: Valuation is an Exact Science Truth: Valuation is part art, part science. No business is "worth" a fixed dollar amount. Factors like timing, deal structure, and buyer motivations create a range of value. Myth #5: The Highest Offer is Always Best Truth: Price isn't everything. More stringent terms around asset vs. equity structure, earnouts, seller financing, reps/warranties, and more can erode that headline valuation number. The M&A process is extremely nuanced, with no one-size-fits-all formula for success. Working with an experienced business broker who understands these complexities is pivotal for owners looking to optimize their exit or growth pathway. #mergersandacquisitions #ma #exitplanning #divestiture #valuationmyths #dealmyths #buysideadvice #sellsideadvice #businessbrokers

𝐔𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐭𝐡𝐞 𝐄𝐱𝐜𝐡𝐚𝐧𝐠𝐞 𝐑𝐚𝐭𝐢𝐨 𝐢𝐧 𝐌𝐞𝐫𝐠𝐞𝐫𝐬 & 𝐀𝐜𝐪𝐮𝐢𝐬𝐢𝐭𝐢𝐨𝐧𝐬-𝐀𝐧 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐂𝐨𝐧𝐜𝐞𝐩𝐭 𝐅𝐨𝐫 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 𝐈𝐧𝐭𝐞𝐫𝐯𝐢𝐞𝐰𝐬  In mergers and acquisitions (M&A), the exchange ratio plays a pivotal role in determining how many new shares are given to the shareholders of a target company. It’s crucial in ensuring that shareholders retain relative value in the merged entity. Here's how it works: 🔑 Key Takeaways 1️⃣ The exchange ratio reflects how many shares an acquiring company issues to target shareholders to provide the same relative value post-merger. 2️⃣ Often, a takeover premium is included, which reflects the premium paid for gaining 100% control. 3️⃣ The ratio can be either fixed or floating, each having its own implications for buyers and sellers. 💼 Types of Exchange Ratios A fixed exchange ratio locks in the number of shares until the deal closes, ensuring the acquirer knows the exact dilution and control percentages. On the flip side, a floating exchange ratio adjusts based on share price fluctuations, ensuring the target company receives a fixed deal value. Sellers typically prefer this as it guarantees the final value received, while buyers favor fixed ratios for control certainty. 📈 Real-World Example Let’s say an acquirer offers 2 of its shares for 1 share of the target company. If the acquirer’s shares are trading at $10 and the target company’s shares at $15, the 2-to-1 ratio means the acquirer effectively offers $20 per share of the target, a 33% premium over the $15 trading price. ⚖️ Managing Risks with Caps & Floors Both fixed and floating exchange ratios often include caps and floors to protect both parties from extreme market fluctuations. Caps prevent the buyer from giving up significantly more consideration, while floors prevent the seller from receiving significantly less. 💡 Merger Arbitrage Savvy investors can exploit price gaps that emerge between the buyer’s and seller’s shares post-announcement. This is called merger arbitrage, a common strategy used by hedge funds. Understanding the nuances of the exchange ratio is essential for any M&A deal, helping to ensure that all parties retain value, manage risks, and ultimately, drive successful integrations. #MergersAndAcquisitions #CorporateFinance #ExchangeRatio #BusinessStrategy #M&A #Valuation #Finance #StockMarket #StrategicAcquisitions