Sun Mergers & Acquisitions - Exit Strategies for Business Owners

Proactive Acquisition Search Program

A successful acquisition search is a challenging undertaking because quality acquisition opportunities are very difficult to find. The majority of buyers approach this process in the traditional manner: by searching websites, contacting business brokers, looking in newspapers, etc ...

This traditional approach is a lengthy process that typically produces many under-performing and over-valued businesses; and seldom yields a quality company. It also places the buyer in a bidding war against others that are using the same limited resources to identify a business opportunity. An acquisition program with Sun Mergers & Acquisitions can serve to eliminate these disadvantages.

A proactive acquisition search by a professional intermediary firm will identify many more interested sellers than are currently "on the market." Business owners continually express to us that they would be interested in selling if we had a specific buyer, but are not interested in marketing their company for sale on the open market. Working on your behalf, Sun M&A approaches hundreds of identified potential targets. We make them aware that we represent a specific motivated and highly qualified acquirer specifically seeking a company in their industry. It has been our experience that this approach will generate significant activity, which is a key element toward finding a suitable business.

How we typically work with the client in a proactive acquisition search:

Review Client's Acquisition Criteria

A successful acquisition process involves a proactive, multi-phase approach. Our goal is to maximize the probability of successfully consummating an acquisition by identifying, qualifying and introducing as many target companies as possible.

We work with the client to identify specific target companies that potentially meet the search criteria based upon business and industry type; gross sales parameters; geography; etc. We utilize multiple databases and conduct other industry research, as appropriate, to develop a target list of acquisition companies. The list is reviewed with the client to prioritize the companies that we will be contacting.

Contacting Potential Acquisition Targets

Sun M&A has developed a proven direct mail system that is used in conjunction with a follow-up program by our Telephone Business Development Department to maximize the probability of reaching prospective targets. Identified targets are contacted multiple times, as necessary, with a letter specially designed to maximize the probability of generating a response. Our Telephone Business Development Department will contact any parties that do not respond to the mailing. This persistent approach is crucial to the program, since it maximizes the potential number of prospects to review. Identifying a larger pool of prospects increases the likelihood of finding quality opportunities. When contacting target companies, as a professional third party intermediary representing a specific buyer, we are better able to elicit a positive response. Once there is mutual interest between the parties, we make the initial introductions and arrange exploratory meetings.

Valuing Prospective Acquisitions

Sun M&A assists in valuing the acquisition prospects, which is a crucial factor in assessing each opportunity. Overvaluing a business could result in paying too high a price, while undervaluing a business puts the acquirer at risk to lose out on what otherwise could have been a profitable transaction. In the complex process of establishing fair market value, Sun draws upon its market knowledge, experience and understanding of the various accepted valuation methodologies. Our experience in interpreting and recasting financial statements enables us to "read between the lines" of financial statements to ascertain a company's true profitability. We identify and evaluate the non-financial or intangible factors inherent in privately owned businesses, which must be factored into the equation to make an informed decision. Our daily involvement with business transactions and knowledge of current market conditions provides us with the unique insight that is required to advise clients in this important area.

Negotiating and Structuring Transactions

After we target, qualify and determine the fair market value of prospective candidates, Sun M&A advises and assists with the negotiation process. We help to structure and present written offers and then work with your CPA and Attorney to follow the transaction through to a successful completion. In addition to negotiating a favorable purchase price, successful negotiations often involve arranging for seller financing, third=party financing, employment agreements, non-competition agreements, consulting agreements, earn-outs, seller warranties, contingencies and others. Our success is based upon our negotiating a "total package" that accomplishes your goals.

As a third party to the transaction, we act as a "buffer" in the negotiating process. This will preserve the relationship between the buyer and seller, which typically survives the closing. The role of intermediary provides us with an understanding of the key concerns of all parties and thereby enables us to recommend creative solutions to bridge these concerns. Working with an intermediary and avoiding confrontation permits the parties to focus on establishing a good rapport and trust, which are necessary elements of a successful transaction.

Fee Structure

Sun M&A aligns its goals with those of our client. We benefit financially by only earning our success fee after the client has achieved its goal and acquired a company. The success fee is a predetermined percentage of the gross sales of the acquired company, due when the transaction closes. The specific percentage will vary by project (depending upon industry and transaction size).

As your representative, our goal is to negotiate the most favorable price and terms. Tying our success fee to sales revenue eliminates any concern relative to conflict of interest. It is not unusual for our efforts to enable clients to acquire a company at a significantly reduced value compared to searching and negotiating on their own in a more competitive process.

For more information about how you can benefit from the services of Sun Mergers & Acquisitions, please call us toll free (800) 232-0180 or fill out his short form.

Sun Mergers & Acquisitions
411 Route 17 South ~ Suite 300 ~ Hasbrouck Heights, NJ 07604
Phone: (201) 727-1300

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