Is Business Valuation Necessary?

When you are selling your company, the marketplace determines the true value of your business. Business Valuations provided by business brokers and consultants as a rule, they are academic exercises that are out of date the day they are produced.

Valuations can be useful when one needs an objective appraisal of what a business is worth at a specific point in time, one that can stand up in a court of law. Examples would be estate planning purposes or forced redistribution of assets due to divorce.  But otherwise valuations are not worth the $30,000 to $50,000 a business owner pays.

Why? Shifts in market, economics, and competitive landscapes make valuations obsolete. Additionally, your business will be worth more to the right acquirer or acquirers. If you identify several acquirers that can benefit by adding your product lines, client base or plant locations, you drive your price higher.

For business owners seriously considering the sale of their life’s work, time and money is wasted by buying a valuation. An estimated range that is based on research and confidential discussions with acquirers that are looking for companies like yours should be made a part of the M&A process, rather than an expensive precursor to it.

M&A Markets on the Edge of Revival

In recent weeks a flurry of announcements has energized sentiments in M&A markets replacing a glum that abounded during the recession.  What does this change mean for M&A markets for the rest of 2010 and 2011?  It likely points to a revival in activity.  As we know, fundamentals are the fuel that sustains trends.  However, changes in sentiments are the spark that fires the engine

Opinions vary, but the general consensus is that the economy is recovering, albeit slowly.  Earnings reports have been good and in many cases surprisingly so.  In addition to the performance of the economy, liquidity in the system and access to credit are very important drivers in M&A markets.  Estimates differ, but all suggest liquidity is dramatically higher than in the “heydays” for M&A markets of 2006 and 2007.  Both corporations and financial groups are under pressure to deploy this liquidity, suggesting a spark of sentiment is likely to open the floodgates for M&A markets.  Lenders are active again and interest rates are lower than ever, meaning better access to cheaper capital.  All of these suggest that we could see a near term surge in M&A activity as capital moves off of the sidelines.

The Wall Street Journal no longer reads like an obituary like it did during the recession. Recent reports of M&A transactions like the HP acquisition of 3PAR have started to pepper the news. Uncertainty about future tax policy and the future of the economy seem to be driving a sense of urgency in company owners that want to strike while the opportunity is present. Fundamentals are important, but sentiments cause people to act. The fundamentals are good. And for the first time since late 2007 sentiments are good. The nexus of these suggests a window of opportunity for good companies to come to the market. For more information about Private Investment and M&A please visit Allegiance Capital Corporation’s blog at www.allcapcorp.com/blog.

Allegiance Capital Corporation is a private investment bank that guides privately-owned companies through every aspect of selling and financing a business. The company specializes in selling family-owned businesses for a premium price. The company offers Mezzanine Financing, Executing leverage buyouts, Acquisition Strategy, Business Advisory, Exit Strategy, Family business Consultation and More. Allegiance Corporation not only has a Private Investment firm in Texas and a thriving Advisory Firm in Illinois, the company offers their services in multiple locations both nationally and globally. All Capital Corporation offers buyers and sellers, advice, planning, and strategic development to maximize their buying and selling investments. To learn more about Allegiance Capital Corporation visit http://www.allcapcorp.com.

Buying and Selling a Business: Getting a Premium Price for Your Company

Allegiance Capital operates very differently from other investment banking firms. We invest considerable dollars into developing buyer research to identify better-quality acquirers for the companies we sell. However, our research findings must go beyond finding a quality acquirer – we endeavor to lay out why the target acquirers are ideally suited to buy the selling company that Allegiance Capital represents.

Here’s an example:
Allegiance Capital took on the sale of a chemical company that was in financial trouble and was being pressured by its bank. Our client owed its bank $14 million in principal and $3 million in interest. The bank valued the business $23-26 million. It was easy for Allegiance Capital to uncover several good acquirers who would offer from $18-23 million for the business. However, through the exhaustive research, we identified a Western European acquirer that was a unique match for the client. Due to the rising value of the Euro, cost of manufacturing certain chemicals was considerably more expensive in Western Europe than in the U.S.  Freight rates had tripled, and the European firm had lost its competitive pricing edge because the cost of shipping its chemical products to the U.S. had soared. It needed to produce products in the U.S. By acquiring our client’s company, the European buyer obtained a manufacturing facility that was immediately available. The acquirer maximized this under-utilized facility, and also picked up additional product lines in the transaction. The European acquirer paid $33.5 million for the business.

Somewhere, an acquiring company that will pay premium price for your company is waiting to be discovered. Allegiance Capital will find them for you. When we do, the groundwork is laid for an exceptionally successful transaction where everyone wins.

To learn more about Allegiance Capital Corporation, Private Investment Banks in Dallas, or Business Advisory Firms in Chicago,  please visit www.allcapcorp.com 

5 Tips for Selling Your Business in Dallas and Chicago Markets

The sputtering economy is actually a benefit for those business owners with growing profits and an interest in selling. This is because there are fewer attractive companies for buyers to acquire in Chicago . The M&A market in Illinois is heating up and good companies that come to the market now are receiving high valuations if they can connect with the right buyers. The following information contains 5 key tips to consider in the process of selling your business.

1. Deciding to Sell- First and foremost, you must be fully ready and determined to sell your business in Illinois. Ask yourself, “Why do I want to sell?” and “What will come out of this Sale?” If you have a definite answer to these questions, then it may be the time to sell your business.
2. Determining the right time to sell- Keep a keep a keen eye on the market. If your business is doing reasonably well in spite of the economy, then it may be an excellent time to sell.
3. Choosing the right investment banker Chicago - Choosing the right investment banker will enable you to meet your personal and financial goals and achieve a premium price. Past performance determines future success.
4. Identifying potential buyers- Work to find buyers that align with your culture and vision. Your investment bank should take the lead and create demand among several acquirers to ensure you achieve a premium price for your company.
5. Preparing the collateral- You have made your final decision to sell your business. To finalize the details and begin implementing the sale of your business, prepare all documents, reports and research that must be needed. Remember that you’re selling your life’s work and the collateral should represent that.

Now that you have the first five steps of selling your business and you have decided it is a good time to sell your business, it is important to do your research and find a quality Private Investment Bank to help you find and meet the right market for your business. Your business is a personal investment and a company you chose must know the market in and out to help connect you to the right buyers.

Allegiance Capital Corporation: Private Investment Bank in Chicago and Dallas

Allegiance Capital Corporation is a private investment bank that guides privately-owned companies through every aspect of selling and financing a business. The company specializes in selling family-owned businesses for a premium price. The company offers Mezzanine Financing, Executing leverage buyouts, Acquisition Strategy, Business Advisory, Exit Strategy, Family business Consultation and More. Allegiance Corporation not only has a Private Investment firm in Texas and a thriving Advisory Firm in Illinois, the company offers their services in multiple locations both nationally and globally. All Capital Corporation offers buyers and sellers, advice, planning, and strategic development to maximize their buying and selling investments. To learn more about Allegiance Capital Corporation visit http://www.allcapcorp.com.

Private Investment Bankers Dallas and Chicago

Private investment bankers Dallas and Chicago are in great demand these days. The growing popularity is on account of various functions performed by them and services provided to their clients. They provide one stop solution to all the investment decision needs, consultancy services, financing requirements, equity management etc.

It is needless to say that the team of experts at these investment banking firms is highly knowledgeable and experienced in various realms of conducting business. Their expertise lies in helping their clients take effective business and investment decision that will help them in multiplying their worth multiple times.

The importance of a highly reputed and experienced investment banking firm has also increased post recession as the businesses are looking for new and innovative ways to carry out their business activities. The various ways in which investment bankers chicago assist their business clients include helping them make judicious business decisions by providing them with all the needed market information and business statistics.

An investment banking firm has specialized knowledge in various domains of carrying out a business in all possible industries. In fact there are industry specific investment banking firms that specifically cater to the business needs of firms and corporate organizations operating in a particular industry.

To begin with, investment bankers bring about consensus with respect to the price between buyers and sellers. Obviously either party would like to maximize its value in a particular deal. The sellers would like to get the maximum for themselves while the purchasers would insist upon a big bargain.

The chances of deadlock or the deadlock itself is prevented by the effective intervention of these advisory firms Dallas. They will make either party involved in the transaction see some reason in compromising a bit on their stand and also ensure that the interest of their clients is enforced.

It is also the duty of private investment banking firm to advise its business clients in the task of making their business appear as a favorable investment proposition to the purchasers and other investors. Whereas buying and selling businesses is concerned, investment bankers are always at hand to help their client go about the process in the most favorable way.

In addition to providing business valuation services Chicago , they also advise their clients interested in divestiture of the best time when it is most profitable to do so. Similarly in matters of mergers and acquisitions, the advice of the acquisition advisors is highly solicited for. They are the ones who are aware of the market standing and asset worth of every firm in the market and can even come up with a few potential investment options for their clients.

The kind of knowledge about the firms in the industry and the market dynamics that is required for effective merger and acquisition solicitation is too well possessed by the investment bankers. Therefore a lot of them are also acting as acquisition advisors for their clients.

Selling A Company Successfully

Every successful business began in the imagination of an entrepreneur. Out of vision, determination, and a relentless pursuit of customers, a business was born and it grew to become an enriching life's work.

Most entrepreneurs get only one opportunity to sell a company, and they deserve to maximize their return.

When business owners are ready to quantify their body of work through a sale, they need an investment banking partner who will protect their interests, very confidentially present their company to the right buyers, and craft the likelihood of a premium sales price.

Allegiance Capital Corporation has a proven methodology, exceptional marketing expertise, and the financial acumen to help get business owners what they deserve. Allegiance Capital has numerous locations and offices for example we have a Private Investment Bank in Dallas, TX as well as Financial Advisory Firms in Chicago, Illinois.