When representing sellers,
Axcension custom-fits solutions for
the unique needs of each client.
Axcension counsels its clients on
current and historic transaction
multiples and optimal transaction
structures.
Axcension provides sell-side
advisory services to sellers of
middle market companies in all
types of transactions: (i) sales of
closely held companies owned by
entrepreneurs and their families,
(ii) divestitures of subsidiaries,
divisions and other non-core
assets, (iii) divestitures by
private equity groups of their
portfolio companies, and (iv) sales
of small-and mid-cap companies.
Axcension’s role may be
comprehensive or limited based on
the situation, from conducting
negotiations, or providing
impartial and objective advice
regarding the merits of unsolicited
interest or offers. Axcension’s
tailored approach is designed to
maximize value and minimize the
disruption to daily operations
while maintaining confidentiality.
Axcension leverages a network of
established and developing
relationships. Axcension works with
tax and legal advisors in the
review and assessment of letters of
intent, definitive agreements and
ancillary employment agreements.
Axcension’s M&A Services team
negotiates exclusive sales of
public and private companies and
divestitures of subsidiaries and
divisions. Axcension’s expertise
ensures that its clients maximize
the return on their investment in a
business, subsidiary or division.
AXCENSION’S APPROACH
Axcension helps you develop and
implement an exit strategy.
Axcension starts with an in-depth
strategy session to thoroughly
familiarize Axcension’s M&A
services team with your technology,
products, market opportunity,
operations, finances and M&A
objectives, and better acquaint you
with Axcension’s M&A methodology
and time line.
Axcension provides sell-side
advisory services to sellers of
middle market companies in all
types of transactional situations:
(i) sales of closely held companies
owned by entrepreneurs and their
families, (ii) divestitures by
large public and private companies
of subsidiaries, divisions and
other non-core assets, (iii)
divestitures by private equity
groups of their portfolio
companies, and (iv) sales of small-
and mid-cap public companies.
Axcension’s role will be
comprehensive or limited based on
the situation, from conducting a
full-blown auction to a negotiated
sale, assisting in negotiations, or
providing impartial and objective
advice regarding the merits of
unsolicited interest or offers.
Axcension’s well thought-out,
tailored approach is designed to
maximize value and shoulder the
burden of the process, minimizing
the disruption to daily operations
while maintaining confidentiality.
Maximizing Your Value
Axcension knows exactly what it
takes to drive premium value for
your business. Axcension will
prepare concise, detailed and
comprehensive information regarding
the business, apply sound market
analysis and research to support
financial projections.
Axcension will define the
intangible and future benefits of
the business and the potential
synergies of a pro forma
combination. Axcension will
identify and approach the right
buyers. Axcension will conduct a
structured, competitive sales
process. Axcension will structure
and negotiate a deal on the
seller’s terms. Axcension will
effectively position your company
in the marketplace and avoid the
valuation pitfalls that will
underestimate the value of your
business.
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Presentation Materials
Axcension knows what it takes to
create the professional marketing
materials that are critical to
achieving maximum value for your
company. Creating compelling
marketing materials is critical to
obtaining the highest selling
price. Axcension has the expertise
to professionally market companies
and create materials that speak the
language of the buyer and present a
compelling opportunity that will
generate significant interest in,
and achieve the maximum value for,
your company.
Buyers review hundreds, if not
thousands, of sales memoranda
annually and value materials that
succinctly and effectively
highlight important information
about the company, the industry in
which it operates and the
opportunity the deal presents.
A comprehensive and
easy-to-understand overview of the
company, its location, lines of
business, number of employees, and
growth opportunities within the
industry. Information regarding key
technologies, company assets and
managers that make the business a
compelling acquisition target.
Marketing materials are an
essential and powerful tool in
convincing potential buyers to
pursue particular acquisition
opportunities. Buyers typically
have high expectations regarding
the content, uniformity and format
of the materials and more attention
is paid to what is familiar to
them.
Professional marketing materials
show buyers that the seller is
serious about pursuing a deal and
present the seller in the best
possible light to elicit maximum
value.
Axcension will prepare an initial
offering document outlining the
business constructed to pique
interest of potential buyers. The
name, price and other confidential
information regarding the company
are not disclosed until a
confidentiality agreement is
signed.
Axcension will prepare an Offering
Memorandum: Typically a 35-40 page
document featuring investment
highlights, detailed business
description, industry and
competitive analysis and detailed
financial information. Distribution
is closely tracked and
confidentiality is strongly
guarded.
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Valuation
Axcension provides you informed and
insightful understanding of the
likely range of offers you may
garner from interested buyers
before negotiations begin.
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Industry Standards
Before proposing an asking price
from prospective buyers, Axcension
determines appropriate
consideration parameters by
analyzing the current market
valuation of any comparable public
companies and by considering
industry benchmarks.
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Specifics of Your Business
Axcension analyzes client-specific
factors which could enhance or
diminish your company’s value to a
prospective buyer. Axcension
analyzes your revenue composition,
recognition practices and growth.
Axcension considers your recurring
revenue, cash flow and operating
expenses, as well as margins and
profitability. Axcension audits
your current technology platform,
product suite, target market,
market opportunity, competition,
sales and distribution model and
pricing.
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Assemble an M&A Committee
Axcension will help you assemble an
M&A committee. Taking into account
confidentiality concerns, your M&A
committee may include delegates
from your finance, legal, sales, IT
and R&D departments.
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Meeting the Buyer
After Axcension prequalifies
prospective buyers, Axcension may
arranged a conference call between
the buyer’s representatives and the
relevant member’s or your M&A
committee.
Axcension helps you prepare for the
meeting by preparing any necessary
presentations and helping you
prepare responses for anticipated
questions. Axcension participates
in these discussions and follows up
to solicit feedback from the buyer,
addressing concerns and building
interest.
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Getting Down to Business
If your business and technology
piques the buyer’s interest, then
it will soon be time to get down to
business. Subject to a
confidentiality agreement,
Axcension will provide detailed
financials, future product plans
and specific revenue and earnings
projections to the buyer.
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Deal
Structure
The structure of a transaction can
be as important as the purchase
price. Many buyers prefer asset
purchases that could have
devastating tax consequences for
many sellers. Payment will take the
form of cash, stock, options, debt,
earn outs, and post-closing
employment and incentive
compensation agreements. Each
possible deal structure has tax
ramifications, many with
significant upside, and some with
substantial risk.
The deal structure must take into
account many factors including the
financial needs and risk adversity
of the seller's principal
stockholders, the buyer’s financial
condition, and the financial,
reporting and regulatory compliance
impact the proposed structure will
have on the buyer. Axcension will
collaborate you and a team of
accountants and lawyers, to explore
options, clarify goals, and
eliminate confusion.
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Letter of Intent
Once there's agreement on the
price, structure and terms of the
transaction, the parties will
ordinarily sign a non-binding
Letter of Intent (LOI), which
serves as a precursor to a formal
contract. As the LOI is drafted and
reviewed by the parties' attorneys,
Axcension assists in addressing and
resolving issues as they are
identified.
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Due
Diligence
Once you are entertaining an offer
to sell your business, it will be
time for due diligence. Due
Diligence isn’t just for Buyers.
Many deals involve the seller
staying involved in the business
that is sold, whether as a minority
shareholder, an employee, or a
consultant. In other instances, the
Seller is taking stock of the Buyer
as consideration, or the purchase
price involves an Earn Out. In each
case, it is critical to know how
trustworthy the Buyer is. Axcension
can help you with due diligence.
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Negotiations: The Devil’s in the
Details
Axcension will assemble and manage
a team of trusted attorneys to do
the necessary legal work when it is
time to sell your business.
Axcension works with experienced
mergers & acquisitions attorneys
who will negotiate the legal terms
of your deal, will structure the
deal to minimize your taxes, and
work to ensure you get the deal you
are bargaining for. Often the
business people have a meeting of
the minds about the business terms
of a deal, then they call in their
attorneys. Too often, business
attorneys try to impose
unreasonable terms on the other
side so the attorneys can show
their clients that they “got over”
on the other side.
Axcension’s legal team knows the
tricks of the trade and will work
to prevent mischief by the other
side or their attorneys. The legal
team will strive to ensure that you
get what you bargain for and
Minimize Purchase Price
Adjustments. Buyer’s often try to
offset their costs against the
purchase price, or find other ways
to adjust the purchase price down
after the sale contract is signed.
Sometimes such offsets and
adjustments are appropriate, but
the legal team will work to ensure
you get what you bargained for.
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Presentations
Initial impressions are important,
and presenting an M&A opportunity
is no exception. To effectively
market you to prospective buyers,
Axcension prepares an Offering
Memorandum that provides a detailed
and compelling overview of the
company, its history, products,
technology, target market, market
opportunity, sales and distribution
strategy and capital structure. The
Offering Memorandum is not a
business plan, but rather an M&A
document tailored for a buy-side
M&A professional, CFO or CEO.
Axcension’s objective is to
carefully and strategically
position you in language the buyer
understands, clearly articulate
your value proposition to the
buyer, and elicit an enthusiastic
positive response.
On the sell side of an acquisition,
Axcension’s IT team will groom your
business for a sale by implementing
an IT strategy that enables you to
use IT more efficiently and
productively. Axcension’s team of
web developers is able to design or
redesign your company’s website to
improve your company’s corporate
image, making it more attractive to
potential buyers.
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Valuation and Purchase Price
Axcension will maximize your ROI by
properly presenting the value of
your company. In private company
M&A transactions, deals priced
based on historical financials do
not generate maximum valuation.
Negotiating valuation based on tax
returns will not reflect the true
worth of a business. A buyer will
gain confidence in the growth
potential of a business by
performing analysis and thoroughly
understanding its historical
financial performance. Applying
historical financial data to assess
value may result in an inaccurate
valuation. It is common for many
privately held businesses to report
minimal profits on tax returns.
While this is smart for tax
purposes, basing valuation on these
figures will severely underestimate
the worth of the business.
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Financial Presentations
It is important to present properly
“recasted” financial statements to
the prospective buyer. Valuation
discussions must be focused on the
future cash flow potential of the
business, not historical financial
results.
financial statements recasted by
adjusting tax returns to conform
with generally accepted accounting
principles (GAAP), quantifying the
market value of company assets (not
book value), eliminating
owner-related expenses and charges
from company financials, employing
proper valuation methodologies and
techniques will help sellers
maximize value.
It is also important to recast
historical financial statements to
show the effect the purchase of the
business will have on the buyer’s
financial results.
Properly structuring a transaction
is just as important as negotiating
valuation. Being experienced in
deal structuring and effectively
negotiating the terms and
conditions of the transaction are
critical to securing and preserving
the maximum value for a company.
Buyers seek to acquire businesses
that will enhance their existing
operations, complement or diversify
their product portfolio, allow
entry into new geographic or
demographic markets, expand their
customer base and/or increase
market share. Premium buyers
recognize not only the financial
but also the strategic merits of a
transaction and thus will be
inclined to offer premium value.
Premium buyers are generally more
willing to pay above the baseline
economic value of a business when
compared to pure economic buyers.
Properly positioning a company to
potential buyers is critical. Most
premium buyers are simultaneously
considering the purchase of various
businesses, some of which may be
within the same industry.
Therefore, it is critical that a
seller’s business is positioned in
a strategic, concise and
understandable manner to buyers.
When selling a company, it is
important to demonstrate a track
record of positive results. More
importantly, it is critical to
convince the buyer of the future
benefits of the business. Selling a
company for maximum value requires
effectively presenting the
competitive positioning and future
market potential of the seller
relative to its competitors.
The initial step to selling a
business involves a thorough and
accurate business assessment which
includes a valuation analysis.
Common methods for valuing a
business include public market
comparable analysis, identifying
precedent M&A transactions,
discounted cash flow analysis, book
or asset based valuation approaches
and applying multiples to revenue,
EBITDA or net income. Many formulas
and “rules of thumb” have been
developed to arrive at a “ballpark”
estimation of value, but it takes
seasoned expertise to look beyond
mere formulas and determine a real
measure of value.
At a minimum, a buyer ought to be
willing to pay the baseline
intrinsic value of a business. In
many cases, however, sellers forego
the opportunity to obtain
appropriate compensation for the
intangible value of the business.
This is caused by the inability of
inexperienced sellers to properly
substantiate, support and quantify
the intangible value of their
business.
Employing proper valuation
methodologies and techniques will
help sellers maximize value. It is
also important to recast historical
financial statements to show the
effect the purchase of the business
will have on the buyer’s financial
results.
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