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In building AltQuest’s initial book of business, we sent over 2,000 emails to our initial coverage group, industrials/manufacturers. The response rate was approximately 2%. Of those that responded approximately 50% were interested in seller and 50% were interested in taking an offer on their business. Of those that were interested in selling their business, approximately […]
At Investment Banking University, we are often asked , “How to build a boutique investment bank?”, so we created a methodology for doing so consistent with that which built AltQuest Group (www.AltQuest.com), the middle market boutique investment bank. This methodology is known as the Boutique Investment Bank Methodology which goes as follows: Decide on IB […]
The minimum amount of financials to get a deal done is the following: Last three years P&L Year To date (YTD) P&L Last Twelve Months (LTM) adjusted EBITDA to price an offer This should be easy to get if the owner has QuickBooks or another accounting software.
LOI to accept price and terms. Due diligence is open book time where buyer investigates the business to see if it is how the seller represented it. SMB due diligence: Standard asset purchase agreement is provided by M&A professional and contingencies for due diligence placed in the contract. A buyer agrees to purchase the company […]
After the strategic or financial buyer decides to draft an LOI and proceed with an acquisition of a given target, the purchase agreement will need to be drafted. In the LMM, the investment banker may draft the agreement himself/herself, but as transactions get larger, M&A attorneys will be involved and take the lead with the […]
The LOI is non-binding except for a few terms: Non-disclosure No shop clause LOI states terms of what the deal will look like and then allows the buyer time to verify the information presented and creates a roadmap for attorneys to craft the final purchase agreement. Price and structure should be settled in the LOI […]
When waiting for financials from the seller, go for a buyer/seller call in the interim to move the process forward. If the buyer wants to wait for financials, then request that the buyer write out their questions of the seller in an email and then forward these questions to the seller. This should set up […]
Most sellers that are interested in having a discussion are 1 to 5 years away from actually selling. They either are waiting for a strategic buyer or simply need to grow a few more years to hit a target valuation to be in line with the lower middle market/middle market valuation spectrum: $500k to <$1m […]
From Origination to M&A Execution Once the investment banker has originated 8 to 10 multimillion dollar listings, one should transition from origination to M&A execution process creating a shortlist for each deal (10 in the shortlist). The investment banker should concurrently prepare the marketing package which includes the teaser and the executive summary. Once the […]
After matching a financial or strategic buyer’s mandate with a target, landing the M&A engagement and building & executing on a buyer list, it is up to the investment banker to work with the buyer and seller to structure a deal. Deal structures initially involve a rough range of valuation to make sure that both […]