Ask Abhi - FAQ'S
Abhi joined the MAXIMA team in early 2021 and is the lead for Corporate Development and Deal Execution, from deal origination to successfully helping companies undergoing merger, acquisition, divestiture, and restructuring transactions. Abhi also helps companies with capital raising and strategic business valuations.
He brings with him a broad range of experience in Accounting, Finance, Risk & Compliance, and M&A. Prior to joining MAXIMA, he worked for an oil and gas company and a tier one bank within the Mid-Market Mergers & Acquisition group where he advised companies on divestitures, acquisitions, and buyouts with successful closed transactions totalling $1.8 billion in enterprise value.
Abhi Recently appeared on Klye Kreppenhofer’s podcast, Finfluencer, to explain the value of an M&A Advisor, and outlines how best to prepare for a transaction, the M&A process in general, and shares recent M&A market observations.
What is the process to complete a valuation on my business?
- The process starts with MAXIMA providing you an information request list (IRL).
- This itemized document tracker identifies the financial and operational information within your business.
- This information is analyzed to construct the estimated fair market value utilizing current market data, multiples of transactions, and expected return on investments for the business Owner.
- This defendable range of value report requires a broad range of financial records, operational & industry factors, and ownership structures, and trends in the marketplace.
- This data is then aligned with comparable results for related transactions in your industry which completed over the prior 12 months.
- The final report provides you with a defendable range of expected fair market values including through the perspective of the potential Buyer.
Why do I need to do a valuation, my accountant &/or lawyer already told me what my value is?
- There are many reasons a business Owner requires an independent valuation report, i.e.: for future tax planning, establishing partner assessments, estate planning, and determining if now is the right time to test the market for interest.
- Our range of value reports go beyond simply providing you with a “rule of thumb” dollar figure for your Company.
- Our goal of a defendable conclusion requires utilizing what the market validates for qualitative factors just as much as quantitative.
- Our range of value report assesses your business model, customer concentration, quality of suppliers, industry trends, competitive advantage, supply challenges, future opportunities etc. to document practical, and cost-effective ways to maximize your value.
- We also engage the same financial methods used by private equity groups and strategic corporate Buyers: Discounted Cash Flow, Capitalized Cash Flow, Tangible Asset Backing, review of comparable transactions, prevailing EBITDA multiples, etc. preparing you and your team to contemplate the impact of each type of Buyer.
How long does it take to complete a valuation?
- Valuation turnaround times depend on the complexity of your business i.e.: holding companies, distribution rights, market size and scope, competitive realities, family involvement, client concentration risk, known future market evolution etc.
- The foundation of any valuation is how quickly we receive the information requested on the IRL; we engage with the information immediately on receipt; delays from outside sources are outside of our control.
How are you different from other advisors?
- The MAXIMA Group utilizes the Transaction Advisor Model.
- We take time to develop an understanding of your business and your motivation/goals for selling or buying a business, enabling the principle of “best fit for each project.”
- Our mission throughout the entire life cycle of your project has us shoulder-to-shoulder with your best interests in mind, whether that takes a few months or years.
- Our process drives our completed projects success rate of 90%.
How do you find Buyers? Do you announce to the world that I am for sale? Will you announce my Company is for sale on the internet or on a website?
- We work with the Owner(s) to develop a profile of the ideal and/or strategic Buyer.
- Once confirmed with our client, we research through specific industry M&A databases, industry associations etc., and our internal 8000+ business contact database enabling us to develop a target contact list.
- MAXIMA primarily focuses on strategic Buyers, companies whose products and services could synergistically integrate the Owner’s business for added value.
- Research includes the market for Private Equity and High Net Worth buyers to add to the target list.
- Once the Owner(s) approves the target contact list, MAXIMA directly contacts each target.
- Any data/Information shared is managed through our strict confidentiality process.
- Initial information is limited to a “blind” opportunity summary which is listed on our website, which can lead to inquiries outside of our strategic search.
- Any additional data requires an NDA (Non-Disclosure Agreement) prior to advancing.
- Our legally binding confidentiality agreement is in place to protect you and your Company during the process.
How do you decide the fees?
- Because every business is unique, the structure of the fees is determined by the size and complexity of the transaction i.e.: multi ownership holding companies and intercompany processes require more analysis and modelling than a stand-alone private Company.
- This requires a one-time valuation and business scalability analysis (again, fees determined on size and complexity).
- Over 28 years we have learned this allows the process to be flexible and fairly recognize the work required to achieve a successful outcome.
- The process begins with establishing a clear well defined work agreement.
- We are committed to you and your successful transaction.
- Our team is motivated by success which allows us to provide services on the success fee basis. We are paid when we successfully complete a transaction… and we credit off the initial valuation fee from the success fee.
What kind of businesses do you sell? Have you ever sold someone like me?
- MAXIMA has acted as the transaction advisor for businesses across a wide range of industries specializing in B2B transactions.
- Take a look at our completed deals here: Past Projects
What is your success rate?
- Our 90% close success rate is a result of our process adapted and developed over 28 years as well as the incredible MAXIMA team working tirelessly behind the scenes!
- This proven process and the ability to develop an understanding of various and unique business models allows us to meet or exceed closing transaction pricing expectations.
Can you provide references?
- MAXIMA provides references on request (while protecting confidentiality).
- MAXIMA client references provide a first-hand sense of the process, the expertise and the value MAXIMA provided to successfully achieve the completed project.
MAXIMA’s goals when selling your Business:
#1 Goal: We Champion your exit objectives in a timely, efficient, and professional manner.
#2 Goal: To make best use of proven “Best Practice” processes and strategies to successfully sell your business.
#3 Goal: At MAXIMA we manage the process of selling your business so you can focus on managing your business.
MAXIMA will only represent one side of any deal.
MAXIMA will act on the BUYERS’ behalf or the SELLERS’ behalf; but never both.
Wondering if you have a sellable business? Contact us for a free consultation.