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 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.
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.
Valuation
Axcension provides you informed and insightful understanding of the likely range of offers you may garner from interested buyers before negotiations begin.
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 or tax returns will not reflect the true value of your business. Many privately held businesses report minimal profits on tax returns. Basing the valuation of your company on these figures would undervalue your business.
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.
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.
Meeting the Buyer
After Axcension pre-qualifies prospective buyers, Axcension may arrange 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.
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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Financial Presentations
Axcension will provide financial presentations to your prospective buyer based on your company’s future potential cash flow, rather than you historical financial results. Where appropriate, Axcension will recast your financial statements by adjusting tax returns to conform with generally accepted accounting principles (GAAP), quantifying the market value of company assets (rather than relying on book value), eliminating owner-related expenses and charges from company financials, and using appropriate valuation methods will help sellers maximize value.
Axcension will prepare concise, detailed and comprehensive information regarding your business, applying sound market analysis and research to support our 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.
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 work with you and a team of accountants and lawyers, to explore options, clarify goals, and eliminate confusion.
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.
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.
