Assignment
Business Owner’s Goal is to retire and sell the company to a long-term Key Employee. Our assignment is to assist the Business Owner establish the business value and structure financing for a Key Employee to possibly purchase the company.
The Client & The Challenge
Business Profile: Ecosystem Restoration Company in Southwest Florida.
Challenge: Determining how to structure an acquisition based on the Key Employee current financial position.
Broker Process & Strategy
Financial Analysis: Broker reviewed the following items in preparation to determine the Net Adjusted Gross Income for the Company.
- Review of tax returns
- Review of Annual and Year to Date financial statements
- Analyze Company’s Operational Expenses to determine difference between Owner Perks and actual expenses required for the operation of the Company on New Ownership.
- Determine the Company’s Real Estate expense is at current market rental rates
- Review existing contracts for work currently in progress or under contract to be performed at a future date.
This work is to provide the Third-Party Business Valuation Firm with the information required for them to prepare a true and accurate valuation report of the Company for the Seller, Buyer and the Buyer’s potential Lender use.
Deal Structure: Seller in preparation of a future sale to the Key Employee had annually given the Employee stock in the company which would be used as part of the Employee’s downpayment requirement.
Results & Execution Timeline
- Valuation: Valuation and Purchase Price more than $5,000,000.00. Ultimate Purchase Price is private information between Seller and Buyer.
- Financing: We were able to assist in securing a Small Business Administration (SBA) 7(a) loan for the majority of the acquisition.
- Timeline: The transaction moved from an initial acceptance of the assignment to a closing in 5 months.
