On average approximately 800 hours over 8-12 months. We think of it this way (7-7-7). 7 weeks to prepare a marketing profile to tell your story to buyers. Up to 7 months to find the right buyer and negotiate a letter of intent (LOI). 70 days to complete due diligence and finalize a definitive purchase agreement.

THERE ARE NO TYPICAL MULTIPLES AND RULES OF THUMB ARE DANGEROUS. Every company is unique and should be evaluated individually. At Beacon, our first step on any engagement is to prepare a market analysis and Value Heat Map so the seller and advisors can get a feel for the current marketplace. We want to establish a reasonable expectation for the sale value of the company, not throw out a number to get a listing.

When we research transactions for a widget company and determine the Average Multiple is 5x EBITDA, but notice a certain type of buyer is paying 10 to 15% more, our mission is to build a profile and attract the right buyer willing to pay a premium over the average multiple.

Assume there are three businesses each making widgets. Each has revenues of $10,000,000 and each made a profit of $1,000,000 last year. However, “A” has grown revenues significantly over the last four years up to $10,000,000, “B” has had revenues shrink from $15,000,000 down to $10,000,000 and “C” has been steadily reporting revenues at the same level every year. These three businesses will not be viewed as having the same value in the marketplace. Valuing a business means digging into the details of the past, understanding expectations for the future and assessing the capital needs necessary to achieve these goals.

We use a multi-pronged process.

• We have an internal data base of over 2,500 private equity firms we track for deal size and industry focus.

• We subscribe to several online databases to reach family offices, corporate acquisition teams and high net worth entrepreneurs.

• We leverage our professional networks, Linkedin, industry databases and “old fashioned” Google search to research companies in your industry and tangential to your industry which may benefit from an acquisition. However, we never approach an industry buyer without permission from our client.

Sometimes the best leads are companies who have previously expressed interest.  We then leverage that information and our resources to find other potential buyers with similar profiles.

Beacon has created Deal Bridge to assist with this type of negotiation.

Yes, we do not include the name of the company or its location in any of the marketing materials.  Prospective buyers receive a one-page teaser containing an owner-approved summary. All buyers sign a Non-Disclosure agreement before receiving the detailed profile.  All industry buyers approached are pre-approved by the client. Some industry buyers will only receive more limited information depending on circumstances.

Yes. We do not work with restaurants and most retail businesses. Pre-revenue companies where value is entirely based on IP are often a better fit with other M&A firms. Dental and medical practices are not a focus of Beacon’s as there are others with an expertise in these areas. We would be happy to make a referral.

Yes. Revenue between $5,000,000 and $50,000,000. EBITDA between $1,000,000 and $5,000,000 are generally good indicators of fit. We have also worked with larger and smaller business when we can add value to the process.

There are lots of horror stories of earn outs gone bad. Primarily because the ones which work out are never mentioned. Beacon has had tremendous success with the earn outs crafted for our clients. The key to earn outs is negotiating realistic, achievable terms with easily measurable metrics. Earnouts, when well-crafted can give the buyer comfort and the seller upside value.

We have two components to our fee structure. A monthly commitment fee typically between $5,000-$10,000/mo., and a success fee based on the total value of deal. Success fee ranges from 3% to 10% depending on the size of the business and other factors. For a business with $5,000,000 in anticipated value, the monthly fee is typically $5,000 with a 6% Success Fee.

No. We never list a price. We solicit bids and offers. Our marketing profiles are crafted to provide a quality buyer enough information to provide an interest indication with a valuation range. Our market analysis is prepared for our clients only. We use market analysis to evaluate any offers received and maximize the value of the transaction.