Who handles small acquisitions and mergers?
This might seem kind of small, but my company is planning on acquiring a very small company (less 1MM revenue). Who do we contact for something like this. Would a CPA handle this type of stuff or a commercial bank?
Thanks ahead of time guys.
Some CPAs offer M&A services. I would ask yours for a referral. There are many business brokers out there, as well as boutiques who handle this. Brokerdealer.com used to have a free search where you could find business brokers, investment banks, etc. in your area, but I think that they now charge for that.
Big Four accounting firms would probably do this right? They offer M&A advisory services.
I believe so, but I am not too familiar with all of the Big Four services. Many of these "M&A advisory services" are just due diligence services where they may perform tax or other M&A-related due diligence.
Legal...
See we're a small company, but I'm pushing the boss to acquire a small company locally which would allow us to really amplify our estimation and bidding abilities. Seems like we might hit up a small boutique shop here in Dallas or even nationally.
Really pushing the 'ascend by acquiring' or 'build by buying' strategy to my boss.
$1MM rev, what's ebitda and what's the multiple you're acquiring at? A service business in construction ancillary services like bidding/estimating should be relatively high margins, maybe 30%+ so even at 10x you're at $3MM and I'd probably only pay half that in cash and maybe some earnout over a floor of rev or ebt on that business unit. If there isn't currently a broker or bank involved I'd do it without an intermediary who will only add 3-5% to the cost. There's value in a business broker to get a good price if you're selling but most aren't adding a ton of value once the buyer is in place and most decent IB's won't dip that low unless the buyer or seller are already clients. Consult a decent CPA way below the Big 4 level and use a decent lawyer who will do it at a fixed fee schedule rather than hourly.
edit: sorry, I read that as you already identified a target, not that you're looking for acquisitions. If you're looking for companies in that range reach out to all of the business brokers and local boutique IB's. Don't engage them per se, just ask what they have and tell them what you're looking for and say you're actively looking. In that range, however, you and your boss are probably the best source for deals especially if you're looking at a more local level (i.e. if you're in Dallas there's no reason looking for estimators in Seattle so you probably know who's good in your area). Look at who you do business with, competitors, etc. and start talking to them. Let your industry network quietly know that you're looking for acquisitions. If you're looking how to finance them, that's a more in depth discussion.
Out of curiosity, what's big 4 level?
Big 4 accounting firms. PwC, E&Y, Delloite & KPMG. I think the big 4 does well and puts the seal of approval on public co's and large private deals when you need that name but they're overkill on small transactions or companies.
This is exactly what I needed. Thanks Dingdong.
Wish I could SB more than once.
Quaerat id provident recusandae et occaecati quae ratione ad. Eos necessitatibus dolore aliquid sequi. Reprehenderit sed beatae sunt debitis. Quod iure exercitationem natus qui vero quia.
Aut placeat perferendis impedit laboriosam rerum sequi. Sint reiciendis iusto minima est. Cupiditate et non velit voluptatem perspiciatis.
Et exercitationem porro totam eligendi voluptates consequatur. Quibusdam quod aliquam quidem qui dolorum. Deserunt quas eos aut maiores sint.
Omnis esse quia ipsam et fugit iste. Laborum voluptatem iusto molestiae asperiores aut. Corporis voluptatem aut tempore quaerat quis aliquam occaecati. Ut incidunt veritatis explicabo enim quaerat omnis non at. Placeat eius quasi et qui provident eligendi distinctio quasi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...