Our Services

We manage the business sale process from inception to completion. Key areas in which we add significant value are described throughout the phases below:

Confidentiality

MidStreet has proactive methods to ensure a confidential business sale.  Our partners and employees will not disclose a client’s identity or other confidential information without our client’s approval. Each descriptive brochure and marketing document only references a client number, in lieu of name or location, and receives full client approval before dissemination. Confidentiality and Non-Disclosure Agreements are signed by all potential acquirers. Precautions are taken to protect confidentiality in a way that would not be possible without our professional involvement.

Defining Options and Exit Strategies

A wide array of options are available when structuring a confidential business sale.  MidStreet works with the client to understand selling requirements and strategic goals. This includes defining:

  • Exit strategy alternatives
  • The most appropriate types of acquirers
  • Valuation expectations
  • Timing of sale
  • Likely tax consequences
  • Owner’s desire for future involvement with the company

An outright sale of the company is not necessarily the best option.  Other options include: retaining an equity stake in the business; selling to employees; identifying a working or investing partner; and other hybrids.  We will help the client to understand the options and determine the most appropriate direction to pursue.

Valuing Your Company

Our philosophy is that fair market value is the minimum value that should be targeted in a sale. By identifying synergistic industry and financial buyers, we achieve a transaction that often exceeds the fair market value. MidStreet analyzes a firm’s strengths, tangible and intangible assets, financial performance and expansion opportunities.  Utilizing proprietary databases enables us to analyze purchase price comparisons of completed business sales in various industries.  Our constant market exposure provides us with a unique and current understanding of transaction values and deal structures in today’s marketplace.  This provides our clients with an understanding of the likely value expectation, prior to initiation of the selling process.

Recasting

Proper interpretation and presentation of financial information is a crucial step in the selling process. Financial statements are typically prepared for tax purposes, not for business sale purposes, and do not accurately reflect the true profitability and potential earnings capability of a business.  Acquirers must be able to “read between the lines” of the financial statements and tax returns to appreciate the total discretionary pre-tax income that would be available to them.  Failure to properly present true “re-cast earnings” reduces the perceived value of a company.  There are more than 60 potential recasting adjustments that must be considered. MidStreet works with the client and its CPA to ensure that all applicable adjustments are identified and the financial presentation is maximized.

Value Enhancement Strategies

We frequently work with owners to analyze and suggest value enhancing opportunities and initiatives. When implemented at the outset of the sale process, these strategies will enhance marketability and increase the value received from a transaction.

Presentation and Packaging

When acquirers evaluate a business opportunity, they expect the records and facts to be properly organized and documented.  A professionally packaged and presented business increases a buyer’s confidence and comfort level, thereby increasing the likelihood of a successful sale.  A business owner spends years establishing name recognition, market niche, vendor relationships, operation & production systems, management, personnel, distribution channels, customer loyalty and numerous other intangibles.  This is a story that needs to be properly told to educate potential buyers.  MidStreet takes pride in our ability to present an in-depth review of a company’s strengths, weaknesses and opportunities to validate and defend the future earnings potential of the business, thus maximizing its attractiveness and perceived value.  This client approved report does not disclose the company identity, thereby maintaining confidentiality.

Multi-Pronged Marketing Approach

MidStreet utilizes multiple confidential marketing strategies.  One key strategy is the licensing of proprietary corporate databases that provide access to companies that present the best synergistic fit with the client’s firm.  This enables us to target the most appropriate strategic acquirers for the company. At the outset of an engagement, our in-depth research enables us to generate a comprehensive target acquirer list for client’s review and approval, prior to confidentially approaching potential acquirers.

Broad Buyer Spectrum

A business owner’s contacts tend to be limited to a particular industry.  The best overall price often comes from an acquirer and a transaction structure that owners had not previously considered or been familiar with.  Our buyer pool typically includes individual buyers, investment groups and other companies in the same or allied industries that are actively expanding through acquisition.  We also utilize the most prominent M&A websites in our confidential marketing efforts.  Our Internet presence provides maximum exposure to strategic and financial buyers.  All potential industry acquirers are approved by our clients and approached on a blind basis to maximize confidentiality throughout the process.

Screening of Potential Acquirers

The majority of potential buyers expressing interest in a business will not be qualified to purchase the company.  MidStreet pre-screens potential acquirers before they impact a client’s time and focus.  This ensures prospects are thoroughly screened as to their genuine interest level and financial capability to close the transaction prior to their introduction to our client.  This pre-qualification process is a crucial step to prevent wasted effort and protect confidentiality.

Negotiation Process

Sellers are more likely to achieve a substantially better financial package when negotiating through a qualified professional intermediary. During this phase we will typically be negotiating with multiple parties thereby increasing a client’s options and leverage, while avoiding dependence on any particular prospective acquirer. The sense of competition in the negotiation stage typically serves to drive up purchase price, ward off “low ball”; initial offers and quicken the pace. Our involvement allows the business owner to remain at arm’s length during the negotiation process, while still maintaining complete control. Our ability to follow up with and manage the expectations of the parties is typically something a Principal cannot accomplish without appearing anxious, thus compromising negotiating position.

Transaction Structure

The sale of a business involves many elements of financial opportunity to the Principal. The purchase price is only one component of the overall result.  MidStreet takes into account all of the elements of the financial transaction, including:  initial investment; allocation of purchase price; terms and interest rate on notes; liabilities assumed by acquirer; transfer and negotiation of leases; employment contracts; consulting agreements; non-compete agreements; current assets retained by the seller; earn-outs (percentages of future sales paid to Seller); continuation of perks and fringe benefits; stock ownership retention and other pertinent details. The total financial package negotiated on behalf of our clients is the true measure of our value-added service.

Term Sheets / Letters of Intent

MidStreet is available to draft non-binding term sheets that serve as a negotiating document to determine if the parties can reach an agreement on the key terms and conditions of a transaction.  This term sheet confirms the parties are on the same page prior to moving to the due diligence and legal processes.  The term sheet also serves as a blueprint to be used by the closing attorney to draft definitive purchase agreements.

Due Diligence Counseling

Financial and operational representations are made during the sale process.  Potential acquirers rely upon these representations when determining the viability and the worth of a firm.  If these representations are not adequately and clearly substantiated during due diligence, the transaction could be jeopardized.  Our experience and involvement in countless due diligence meetings enables us to anticipate what information the acquirer and their professionals will be looking for.  Our advanced counseling and preparation maximizes the probability that the due diligence phase will be managed correctly and successfully.

Contract Negotiation

Numerous agreements must be drafted and the efforts of multiple parties must be coordinated.  MidStreet works in partnership with our client’s legal and accounting teams to orchestrate a Definitive Purchase Agreement that reflects all details of the transaction.  We play a key role in ensuring that this process is properly managed to avoid jeopardizing a transaction.  Our involvement in this stage keeps the legal process focused on both sides, potentially saving our clients thousands of dollars in unnecessary professional fees.

Closing and Transition Period

This is the point at which the client’s goal has been realized.  The transition period typically involves a period of cooperation during which time the seller will assist the acquirer in effectuating a “seamless” transition.  This includes the transferring of key relationships and proprietary information needed to successfully operate the business.  MidStreet is available to provide advice and assistance following a transaction to help anticipate or resolve any post closing matters that could arise.

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