Competitive Market, Liquidating Event, & Maximum After-Tax Value
Competition drives value. Our goal is to create a sales process that produces multiple qualified & motivated buyers for every listing we accept.
While the owner’s goal during a business exit is often to maximize the amount of cash he or she receives at closing, it’s often not possible or not financially viable to receive all of the consideration at closing, creating the need to manage other consideration as part of the business sale.
While the liquidating event is certainly important, proper tax planning during the negotiation and construction of any Letters of Intent and Purchase Agreements is necessary to ensure that our clients maximize the amount they “take home” from any sale.
Mission Statement
Using Honesty, Character, Integrity, and Expertise, Create a Competitive Market that Produces a Liquidating Event, allowing Our Clients to Receive Maximum After-Tax Value for the Sale of Their Business.
Competitive Market
Competition drives value. Our goal is to create a sales process that produces multiple qualified & motivated buyers for every listing we accept. The more qualified buyers, the more leverage and negotiating power our seller clients have in the process. A few of the marketing methods we use are as follows:
· Distribution to Buyer Database
· Online Marketing to over 100 sites
· Soliciting other M&A and professional services (accounting/legal/financial planners) offices
· Social Media, Website, and Pay-Per-Click Campaigns
· Targeted Direct Mailing
· Targeted Telemarketing
Liquidating Event
While the owner’s goal during a business exit is often to maximize the amount of cash he or she receives at closing, it’s often not possible or not financially viable to receive all of the consideration at closing, creating the need to manage other consideration as part of the business sale. This other consideration can take the following forms:
Seller Note/Seller Financing (either on full standby subject to SBA loan repayment or not)
Installment Sale
Earn-Out (Consideration contingent upon the occurrence of a future event)
Employment/Consulting Agreements
Lease Payments
Non-Compete Provisions
Managing these different provisions and structuring the various elements of a business sale transaction in a way that maximizes value to our clients are a couple of the many ways Adena Business Advisors puts cash in our client’s pockets during a business sale.
Maximum After-Tax Value
While the liquidating event is certainly important, proper tax planning during the negotiation and construction of any Letters of Intent and Purchase Agreements is necessary to ensure that our clients maximize the amount they “take home” from any sale.
As there is often an inherent conflict between business buyers and sellers as to how the deal is to be structured (asset sale vs stock sale) and how the tax allocation should occur (tangible assets vs. intangible assets/goodwill), our process attempts to proactively control these negotiations, ensuring the best after-tax treatment for our clients.
Adena's Process For Managing the Sale of Your Business
Unlike most intermediaries, Adena has a team of professionals with a wide range of experiences.
Adena's principals have owned and managed their own businesses and understand the challenges that face business owners. When Adena represents you, you benefit from the experience of our entire team. Here is the process we will utilize to sell your business.
Unlike most intermediaries, Adena has a team of professionals with a wide range of experiences.
Adena's principals have owned and managed their own businesses and understand the challenges that face business owners. When Adena represents you, you benefit from the experience of our entire team. Here is the process we will utilize to sell your business.
1. DETERMING YOUR OBJECTIVES: There will be an introductory meeting to gain an understanding of your business and your personal objectives. We will provide you with a signed Confidentiality Agreement for your protection. Your needs, objectives, business history and basic financials will be discussed. We will discuss possible options for the transaction. Selling options may include: sell and retire, sell and remain with the Company, take on a partner, etc. Thinking this through in advance will help expedite the process of finding a suitable alternative.
2. RECAST & VALUATION: Many people will recite the "rules of thumb" for valuing businesses. Adena is familiar with these guidelines but utilizes a broader and more analytical approach when valuing a business. Determining the fair market value of your business is an involved and complex procedure that involves recasting the business financials to establish the true financial return being generated. Proper consideration must also be given to your Company's strengths, assets, historical financial performance, and projections, along with the money and intangibles inherent in your company. Market conditions, industry trends, and public perception will impact value. Capital availability as well as your flexibility with terms will also impact value.
Adena utilizes several different valuation methodologies to determine the appropriate price for your business. In addition to financial and Industry Analysis comparisons will be made with similar companies that have sold recently within your industry. By determining the highest price a fully informed buyer is willing to pay for your company, you will avoid the risk of losing a timely sale by over pricing the company, or "leaving money on the table” by undervaluing your business.
3. LETTER OF ENGAGEMENT: We will work together to identify and be prepared to address issues such as leases, regulations, licensing, key employees, minority shareholders or other concerns that might apply to your specific situation. Failure to address these early in the process can potentially lead to the loss of qualified Buyers, along with months of wasted activity. Once we have agreed on the objectives and have gained an understanding of your business, Adena will recommend a preliminary action plan. A Letter of Engagement will be signed, which will outline the terms of the assignment, the fee structure, and any special provisions or stipulations for the engagement.
4. INFORMATION COLLECTION: You will be provided with a list of required information. It will involve gathering financial, as well as general information, on all aspects of your business. Proper preparation is crucial for the best presentation of your business and is also the first step in establishing the confidence of a Buyer. Adequate information will enable a Buyer to gauge their level of interest.
5. BUSINESS PROFILE & CONFIDENTIAL BUSINESS REVIEW (CBR): The business must be properly packaged with all applicable records and facts organized and documented. The CBR ensures a presentation in a favorable and factual light, while providing the acquirer with a document to follow and review. The CBR also educates Buyers on the many intangibles inherent in your Company and the opportunities for growth, hence raising the perceived value to the acquirer. These intangibles include name recognition, market niche, vendor relationships, operation and production systems, distribution channels, customer loyalty, trained and skilled employees, and many more.
6. LISTING / MARKETING THE BUSINESS: Your business will be confidentially marketed in several ways, depending on the type of Buyer(s) that is being targeted. We will share the business profile with prospective buyers through the use of websites, buyer databases, professional referral sources, and many more.
7. BUYER PRE-QUALIFICATION: Adena will acquire an NDA from the Buyer, and also determine the Buyer's interest level, management skills, fit and ability to meet the financial requirements of the transaction, prior to releasing the Confidential Business Review (CBR).
8. BUYER/SELLER INITIAL MEETING: The purpose of the initial meeting is to allow the Seller and Buyer an opportunity to gain a better understanding of background, motivation, and other high level items, including determining if there is good chemistry between the Seller and Buyer.
9. INITIAL SITE VISIT: Working together to maintain confidentiality, the potential Buyer will be provided with the opportunity to visit your facility. Generally there are multiple site visits. This is a good forum for the Buyer and Seller to develop a favorable rapport. More detailed information can then be exchanged. An Adena representative will coordinate the visit and be present.
10. BUYER FEEDBACK / DEAL STRUCTURING: Adena will collect feedback from the Buyer at this point to determine if serious interest exists in proceeding to the offer stage. If that interest does exist, deal structuring will begin.
11. OFFER TO PURCHASE / LETTER OF INTENT (LOI): Upon a "meeting of the minds" regarding the key transactional issues, a written offer to purchase, generally in the form of a Letter of Intent, will be prepared. It should outline the purchase price, terms, conditions, and any contingencies. Proper compliance with this step can save thousands of dollars in legal expenses.
12. DUE DILIGENCE: The offer is normally contingent upon the Buyer or their representatives verifying the accuracy of the Seller's financial and operations representations. This detailed review is typically completed within 30 to 60 days of the signing of the Letter of Intent, but may take longer, depending on the Buyer, the size of the transaction, and how quickly the Seller provides information to the Buyer and his/her diligence team.
13. PURCHASE AGREEMENT / CONTRACTS: After all major issues are resolved, and the Buyer is satisfied with the Seller's representations, contracts can be drafted and negotiated. Financing can be arranged. This can be the most trying time in the entire process. Adena has established a solid network of transaction-oriented attorneys, appraisers, bankers, and accountants to assist. Many times, an independent attorney or accountant can expedite the process of closing the transaction and save significant expenses for both Seller and Buyer.
14. PRE-CLOSING REVIEW: All final contracts and documents, as well as estimated closing costs will be provided prior to closing for review.
15. CLOSING: Adena will assist in the coordination of the closing. It is at this point that legalized transfer of assets will take place, and you will have realized your goal.
16. TRANSITION PERIOD: This typically involves a period of cooperation in which you will assist the Buyer in achieving a "seamless" transition. This includes transferring of key relationships and proprietary information needed to successfully operate the business.
IN CONCLUSION: The entire process can take several months, or longer, depending upon the circumstances. In any case, Adena will assist in every step of the process. We look forward to working with you on this very important assignment.
Selling a Business Yourself? Not a A Good Idea
The independent business owner who decides to sell, is at the threshold of a major process involving emotions, as well as the marketplace.
In many cases, the business for sale represents the seller’s life work. Being the independent type to begin with, as well as someone who knows about deals and sales, the tempting notion sometimes arises: “Why don’t I handle the sale of my business myself?”
The independent business owner who decides to sell, is at the threshold of a major process involving emotions, as well as the marketplace.
In many cases, the business for sale represents the seller’s life work. Being the independent type to begin with, as well as someone who knows about deals and sales, the tempting notion sometimes arises: “Why don’t I handle the sale of my business myself?” Those sellers with similar temptations should first take a look at the steps necessary for the successful business sale, and at the advantages of taking those steps in tandem with the best possible professional guide.
Preparing the business for sale
That looks good or just fine to the seller could make quite the opposite impression on prospective buyers. The weathered sign out front that the seller thinks is “rustic” might strike a buyer as in need of a fresh coat of paint. On the other hand, improvements planned by the seller may be either unnecessary or wrongly-conceived. In either case, sellers would be wise to rely on the advice of a professional Advisor, with experience in dealing regularly with buyers and with the objectivity required to set the business scene to its best advantage. Of course, preparing a business for sale goes way beyond outward appearances. Ultimately, a business will sell according to the numbers. A Business Advisor can be invaluable in helping the seller provide financial records that are clear and up to date.
Pricing and Valuation
All sellers naturally want to get the best possible price for their business. However, they also need to be realistic about the true value of the company for sale and to understand that price is, in fact, dictated by the marketplace. To determine the best price, a professional business advisor will use industry-tested valuation techniques.
Marketing & Advertising
The Professional Business Advisor is key to the marketing of a business. He or she will prepare a marketing strategy and offer advice about essential marketing tools. Advisors, through their data bases of buyer prospects, professional associations and other networks, can get the word out about the business far more effectively than any owner could manage on an individual basis.
Presenting the business
The Professional Business Advisor is experienced in handling the typical objections and negative “readings” many typical buyers will raise. Does the business lack parking space? Is its location less than ideal? The Advisor has the skills to balance negatives with positives, or to point out that what appears to be a disadvantage is not always the case. In addition to skill, an Advisor also offers the seller convenience. Sellers often fail to visualize the number of buyer calls they would have to field if handling the sale on their own. The business owner working with an Advisor can continue managing his or her business at the same time the selling process is taking place.
Negotiating the business sale transaction
The Business Advisor will be the most vital Advisor to sellers during any stage of the sales transaction. Steeped in knowledge about negotiating price, terms, and other key aspects of the sale, the broker will guide the seller each step of the way. During the early stages, while the buyer is still considering an offer, the Advisor is the ideal person to follow up and keep the deal running smoothly. Sellers working alone could lose bargaining effectiveness by doing the follow up themselves.
Mastering the paperwork. Even though business owners handle mountains of paperwork as a part of doing business, few of them have had training in the specialized contracts and forms required for the sale of a business. The Business Advisor is an expert at sales transaction details, will help guard against delays, problems, and the worst of all possible worlds – the “wrecked” deal.
Qualifying buyers
The Business Advisor will determine the right buyer for the right business, focusing on those prospects who are financially qualified and who are genuinely interested in the business for sale. For locating and qualifying prospective buyers, a business advisor uses computerized databases to access comprehensive lists of local, national and international buyers – all to increase the chances of selling a business at peak value. And most important, to avoid wasting the sellers’ valuable time.
Maintaining privacy and confidentiality
When an Advisor is involved in the sale, bringing to the business only those prospective buyers who qualify, it is also easier to maintain confidentiality during the selling process.
Press Release: Sale of Evaroni’s Pizza to Moore Dough, Inc.
On December 16th, 2019, Adena Business Advisors, LLC, successfully completed the sale of substantially all of the assets of Evaroni’s Pizza to Moore Dough, Inc.
Opened in 1967, Evaroni’s Pizza Restaurant has been serving pizza, pasta, salad, and beverages to the residents of Ceredo/Kenova/Huntington, West Virginia for over 5 decades.
On December 16th, 2019, Adena Business Advisors, LLC, successfully completed the sale of substantially all of the assets of Evaroni’s Pizza to Moore Dough, Inc.
Opened in 1967, Evaroni’s Pizza Restaurant has been serving pizza, pasta, salad, and beverages to the residents of Ceredo/Kenova/Huntington, West Virginia for over 5 decades. A community staple, the restaurant is located right in the heart of downtown Kenova, WV on the high-traffic Highway 60, the main road thru town, and offers both dine-in and take out options. With regular operating hours of 4:00 PM to 10:00 PM Tuesday thru Sunday, the business has been extremely profitable for years even considering its limited operating hours and single location. The founders, William and Ethel Evans, passed away in 2016 and 2018, respectively and the business was devised to their children, William Evans, Jr, of New Hampshire and Karen Collier of West Virginia.
The new ownership group consists of Larry, Bridget, and David Moore. David Moore will be working as the General Manager and head of Day to Day Operations while Bridget Moore will handle duties at the Drive Thru as Take-Out Manager. Larry Moore will act as Business Manager/Evening Host while maintaining his current daytime job outside of restaurant.
The Evans family was represented by their long-time CPA, Clifton “Skip” Looney of Charlotte, NC (formerly of Ceredo, WV) and attorney M. Edward Cunningham, II of Dinsmore & Shohl LLP, Huntington, WV.
Evaroni’s Pizza is located at 914 Oak St, Kenova, WV 25530.
Press Release: Jones & Frank Announces the Acquisition of M.L. Leonard
M.L. Leonard is a full-service provider of petroleum equipment distribution, maintenance and installation services to customers across Virginia.
The combined capabilities of these two leading companies further strengthen Jones & Frank’s position in the petroleum equipment industry and enable Jones & Frank to better serve its customers’ fueling equipment needs in Virginia and the greater Mid-Atlantic market.
Adena Business Advisors, LLC served as the financial advisor in this acquisition.
Adena Business Advisors, LLC served as the financial advisor in this acquisition.
Jones & Frank, the premier provider of fueling system solutions in North America, announced today that it has acquired M.L. Leonard. Headquartered in Blue Ridge, Virginia, M.L. Leonard is a full-service provider of petroleum equipment distribution, maintenance and installation services to customers across Virginia. The combined capabilities of these two leading companies further strengthen Jones & Frank’s position in the petroleum equipment industry and enable Jones & Frank to better serve its customers’ fueling equipment needs in Virginia and the greater Mid-Atlantic market.
Keith Shadrick, CEO of Jones & Frank, said “I am very excited about the opportunities that this combination creates for our company and our customers. M.L. Leonard has a strong reputation built on a foundation of outstanding customer service, operational excellence and exceptional expertise in product support. These capabilities will bolster Jones & Frank’s strong sales, service and installation networks to provide our customers with more comprehensive support for all of their fueling equipment needs. M.L. Leonard has thrived under the leadership of Mike and Julie Leonard and will continue on this trajectory as Mike Leonard will assume the position of General Manager of Jones & Frank’s new Blue Ridge, Virginia branch.”
“I am extremely proud of what M.L. Leonard has accomplished to date and how we have been able to earn a position as a valued partner to our customers,” said Mike Leonard, President of M.L. Leonard. “I look forward to continuing to provide great opportunities for our customers and our employees as a member of the Jones & Frank family.”
Barrett Gilmer, Managing Director of MidOcean Partners, said “The acquisition of M.L. Leonard is consistent with our strategy of building the petroleum equipment industry’s leading solution provider in Jones & Frank. Jones & Frank is a world-class company, and its hallmark is providing best-in-class service and high-quality solutions across its customer base. We look forward to continuing to grow Jones & Frank’s footprint across North America both organically and through acquisition.”
The terms of the transaction were not disclosed. Gibson, Dunn & Crutcher LLP acted as legal advisor to Jones & Frank. Adena Business Advisors, LLC served as financial advisor and Gentry Locke acted as legal advisor to M.L. Leonard.
About Jones & Frank
Jones & Frank is the leading turnkey solution provider to the North American fueling infrastructure industry. The company distributes, installs and services fueling equipment for retail fueling stations, commercial and government fleets and emergency power customers. Jones & Frank currently operates a network of 18 branch offices and 4 distribution centers with almost 600 employees located across the United States. Distribution, service, and installation services are provided nationally, and include a network of over 350 highly skilled service and construction personnel. Jones & Frank represents the premier products in the fueling infrastructure marketplace including Gilbarco/Veeder-Root, VeriFone, OPW, Franklin Fueling and Containment Solutions.
Press Release: Sale of C.R. Mullis Oil & Heating Co., Inc., to Great Lakes Petroleum
On February 15th, 2019, Adena Business Advisors, LLC, successfully completed the sale of substantially all of the assets of Looper Oil Company, Inc. to Great Lakes Petroleum.
Andrew R. Holtgrewe, CPA, CBI, was engaged as the exclusive sell-side advisor on the transaction and partnered with Nathan Hull, Managing Partner at Hull & Chandler, P.A., to close the transaction in just 14 days.
On March 28th, 2019, Adena Business Advisors successfully completed the sale of substantially all of the assets of C.R. Mullis Oil & Heating Co., Inc., to Great Lakes Petroleum.
Andrew R. Holtgrewe, CPA, CBI, was engaged as the exclusive sell-side advisor on the transaction and partnered with Nathan Hull, Managing Partner at Hull & Chandler, P.A., to close the transaction in just 14 days.
Established in 1947, Mullis Oil specializes in the delivery of gasoline, heating oil, and high/low sulfur diesel to commercial and residential customers throughout the Greater Charlotte area. A family-owned and operated business since it's inception, owner Don Mullis has run the business alongside his two sons Christopher and Cliff Mullis from the Company's office and bulk plant on Belmont Avenue (off of North Davidson in North Charlotte) for many years.
Headquartered just outside Cleveland, Ohio, Great Lakes Petroleum has established itself as a national leader in the fuel delivery and storage business over the Company’s 40+ year history. Under the leadership of Company President Anthony Arcoria and Regional Sales Manager Charlie Reibling, Great Lakes is looking to use the Mullis Oil acquisition as a springboard to continue its already expanding market leadership in the Charlotte market and throughout the Southeastern US.
Great Lakes Petroleum is located at 5001 Wilkinson Blvd, Charlotte, NC 28208.
Press Release: Sale of Looper Oil Co., Inc. to Great Lakes Petroleum
On February 15th, 2019, Adena Business Advisors, LLC, successfully completed the sale of substantially all of the assets of Looper Oil Company, Inc. to Great Lakes Petroleum.
Established in 1938, Looper Oil specialized in the delivery of gasoline, heating oil, and high/low sulfur diesel to commercial and residential customers throughout the Greater Charlotte area.
On February 15th, 2019, Adena Business Advisors, LLC, successfully completed the sale of substantially all of the assets of Looper Oil Company, Inc. to Great Lakes Petroleum.
Established in 1938, Looper Oil specialized in the delivery of gasoline, heating oil, and high/low sulfur diesel to commercial and residential customers throughout the Greater Charlotte area.
“We had entertained the idea of selling our business for about a year,” stated Gretchen Looper, co-owner of Looper Oil. “After three generations, it was very emotional to let go. We knew we were unable to handle this transactions ourselves. Our accountant recommended Andy Holtgrewe. We met with Andy and he quickly gained our trust. He provided us with a comprehensive evaluation very quickly at a very reasonable price. All necessary information and documentation was handled professionally and accurately. Everything was explained in terms we could understand. The fact that Andy is a CPA is a big plus, especially when considering tax consequences. We had multiple offers and closed the sale in 37 days! We cannot overstate how pleased we are!!!”
Headquartered just outside Cleveland, Ohio, Great Lakes Petroleum has established itself as a national leader in the fuel delivery and storage business over the Company’s 40+ year history. Under the leadership of Company President Anthony Arcoria and Regional Sales Manager Charlie Reibling, Great Lakes is looking to use the Looper Oil acquisition as a springboard to continue its already expanding market leadership in the Charlotte market and through the Southeastern US.