Presented by Wanda Silva – President, Silva Capital Solutions
You started your PEO for a reason, you built your PEO for a reason… where are you today, where are you going tomorrow and how will you get there? Geared to the PEO owner, executive and shareholder — this session will include audience participation and lots of fun. Coupled with a look at the 2018 PEO Merger & Acquisition environment — we will build a framework of meaningful ideas, options and alternatives for the growth and future of your PEO. Join Wanda Silva as she waves her PEO magic wand. What will the future hold? Together, let’s see where the journey takes us.
The PACE Annual Conference focuses on the sales, marketing, and technology trends that affect PEOs and the service providers that support them.
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
Wanda Silva | Start with the End in Mind – We will all EXIT one day — by accident or on PURPOSE … Which will you choose?
1. Start with the End in Mind – We will all EXIT one day — by accident
or on PURPOSE … Which will you choose?
Wanda Silva
2. Our time together…
• Where are you today?
• Where do you want to go tomorrow?
- Visualization + Exercise
• What are options for getting there?
- Exit Strategy Planning
• M & A 2018
3. My Goal
Begin to build the “brain” trust
of ideas/options for your future
- Personal and Professional
Review the Tools and Processes to
Get There
5. “Saying goodbye to your
company, saying goodbye to your
life, and the journey in between”
TOP 5 REGRETS OF THE DYING
1. I wish I had the courage to live a life true to myself,
not the life others expected of me.
- I dread going to work
- I started this company to serve my clients I love
the PEO biz now I spend 90% of my day
managing the employees / managing the burden
2. I wish I hadn’t worked so hard.
6. “Saying goodbye to your
company, saying goodbye to your
life, and the journey in between”
TOP 5 REGRETS OF THE DYING (cont.)
3. I wish I’d had the courage to express my feelings.
-I’m afraid to admit that I’m ready to let go of my
company – how will my spouse/ life partner/
family react? – I feel so weak
4. I wish I had stayed in touch with my friends.
-I work so much, I no longer have tome to spend
with my family and friends
7. “Saying goodbye to your
company, saying goodbye to your
life, and the journey in between”
TOP 5 REGRETS OF THE DYING (cont.)
5. I wish I had let myself be happier
I’ll be happy when…
- my company is worth X
- I retire
-I can fish every week
8. WHY?
*All business owners
will EXIT –
With a Plan or
Without one!
Start With the End in Mind
“Do you want to Exit on Purpose
or By Accident?”
10. Exit Strategy Planning IS...
“A process that involves the development and
execution of a series of systematic steps which will
allow both the “shareholders” and the “accumulated
wealth” to be extracted at a defined time in the
future”
CREATE IT DEFINE IT EXECUTE IT
11. Exit Strategy Planning is an
Art Not a Science
Process
Series of Steps
Development of a Plan
Execution of that Plan
KEY To be flexible ~ OPEN and
and Never get to a place
where you have No choice
12. What are some of your
options?
• Sell all or a percentage of the company to partners,
strategic buyers, investors, competitors, or the public
• Recapitalization for partial liquidity
• Merge to enhance value or marketability
• Transfer the Business to family, management, or
employees
• Gift the business for personal or tax planning
purposes
• Liquidate or partially liquidate the business
13. How Do You Get to the
Optimal Exit?
What is the Process?
Clarify “Life After Business” Goals
Business Valuation Reference or Benchmark
Work with Specialists “A Team”
Prepare a Written Plan
Identify and evaluate options
Execute any positioning strategies
Get your “ducks” in a row
Achieve the Exit Strategy
14. SET GOALS NOW
Based on the End Game
• What do you want your life to look like?
16. Mergers and Acquisitions
Environment 2018
• Slower 1st quarter after busy 2017 end
• Dollars Chasing Deals & more high end HR Provider
Acquisitions
• Bigger is Better
• Seller’s Market More Buyers than Sellers
• Accretive Deals
• Valuations Solid Average to high Multiples
• Greater Complexity of Valuation/Purchase Price & Transaction
Structure
• Greater Risk Sharing
• Assimilation/Integration with Minimal Client Loss
17. Valuation
Public PEO Market
• Limited Public Acquisition
– Price/Valuation Data
• Review Baird Equity Research
– Human Capital Technology and Solutions
• Review Key Banc Capital Markets
– HR Software and Services
• Other Recent PEO/HRO Reports
• Private advisor data
18. PEO Valuation +/- transaction
terms =
A deal / investment or sell
Example:
PEO Ebitda = $100.00
5x - all cash = $500.00
10x ; 25% cash = $250.00
25% earn out = $250.00
50% equity in ”something”
*The real multiple = 5x or less
Exceptions distressed / exceptional / perfect fit
19. PEO Valuation – Deal Terms -
Structure
All PEO deals have an earn-out
Value is what a buyer is willing to pay for what you
have to offer
Value = Market Multiple x Adjusted EBITDA
Multiple range 5-8x
Lower earnings + greater risk =
Lower value
Greater risk in what/how the transaction or
investment is structured
Higher % of price in an earn-out
20. Wanda J. Silva
Silva Capital Solutions, Inc.
Office: 770-218-5496
Cell: 404-735-0960
wanda@silvacapital.com
www.silvacapital.com
20
THANK YOU!
“Be who you are, find balance, speak
honestly, value those you love, and
allow yourself to be happy.” The time
is now!