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Business Valuation & Exit Strategies: Planning for the End Game
- 1. Wayne Wilson & Company
Business Advisory Services
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Business Valuation & Exit Strategies:
Planning for the End Game
A Primer for Business Owners
Seeking Liquidity
Nov 2008 © Wayne Wilson & Company. 1
- 3. Preliminary Questions –
Environmental/ Situational
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• Is your business mature or still growing rapidly?
• Is your industry stable, consolidating or declining?
• Does the business generate excess cash or require
continual investments?
• Do you wish to continue working?
• Is successor management in place or available?
Nov 2008 © Wayne Wilson & Company. 3
- 4. Preliminary Questions –
Transactional
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• Are there logical buyers or investors?
• Do you want cash now or over time?
• Do you wish to retain an equity upside?
• Do you have other business opportunities with
greater potential?
• Are there other personal, family or health issues?
Nov 2008 © Wayne Wilson & Company. 4
- 16. Case #1 – Janitorial Svcs
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Situation Solution
• Closely held • Strategic sale to large
• Profitable national operator
• Strong local franchise • Premium price
• Owner wanted to • 100% seller notes
retire – Secured
– Above market rate
– Limit reinvestment risk
Nov 2008 © Wayne Wilson & Company. 16
- 17. Case #2 – Software services
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Situation Solution
• Closely held • Strategic sale to public
• Growing rapidly company buyer
• Little infrastructure • Cash + earnout
• Needed help • Continued w/ business
– Div President
– Options
– Career path
Nov 2008 © Wayne Wilson & Company. 17
- 18. Case #3 – Radio Station Gp
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Situation Solution
• Closely held • Private equity leveraged
recap
• Had grown rapidly via
acquisitions • Back-end equity stake;
but No cash
• Struggling with heavy • Continued to run the
debt load during a business
• Downturn in • Stake worth millions
advertising after advertising rebound
Nov 2008 © Wayne Wilson & Company. 18
- 19. Case #4 – Cutting Tools
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Situation Solution
• Closely held • Private recap – sale to a
• Very profitable large conglomerate
• Owner healthy but • Sold 80% for Cash for
getting older estate liquidity & gifts
• Concerned about • Retained 20% of equity
estate planning • Continued to run the
business
Nov 2008 © Wayne Wilson & Company. 19
- 20. Case #5 – Construction Co.
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Situation Solution
• One owner – wanted • Management buyout
to retire • Bank loan, personally
• Very profitable guaranteed by managers
• Two key operating for initial payout
managers • Seller notes for balance
• Owner flexible on over several years
pricing
Nov 2008 © Wayne Wilson & Company. 20
- 21. Case #6 – IT Reseller
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Situation Solution
• Closely held • Initial public offering
• Growing rapidly • No secondary shares
• Needed growth capital • Large tax dividend
• Owners wanted to • Take out > $30 m of
maintain control $60 m proceeds
Nov 2008 © Wayne Wilson & Company. 21
- 23. About Wayne Wilson
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Wayne Wilson is the principal of Wayne Wilson & Company
(www.waynewilson.com), a business advisory services firm providing executive
coaching and advisory services on growth-related issues to owner/CEOs of
middle-market companies.
He has advised companies on: developing growth strategies; improving
operational profitability; financing business operations; establishing corporate
governance and management processes; designing management incentive
compensation programs; managing mergers & acquisitions; and monetizing
founder equity.
Wayne can be reached at 603.763.3435 or wayne@waynewilson.com
Nov 2008 © Wayne Wilson & Company. 23
