A Business Broker is a licensed agent of a principal registered with the state department of real estate, and as such, they have certain fiduciary responsibilities to negotiate and conduct due diligence on behalf of the principals they represent. In contrast, a Finder is not required to be licensed and is not an agent of the principal. Finders are primarily responsible for making introductions and acting as intermediaries between principals, and they are usually professionals from a specific industry who are knowledgeable about the M&A marketplace.

How is confidentiality protected in transactions?

The BishopKnight Group LLC. guards proprietary information by executing confidentiality agreements with qualified prospective buyers, sellers, and third-party financing sources. Only preliminary summary information is provided, and more detailed information is only disclosed on an as-needed basis.

What is required during due diligence?

Due diligence is the verification of all representations made by the seller upon which an offer has been based. It is initiated after an offer has been accepted and a letter of intent has been executed. Buyers will exhaustively review all relevant, operational, and financial records. Sellers can expect a few representatives of the buyer to spend a week or so at the corporate headquarters of the seller.

What about personal expenses that the seller runs through the business?

In the case of a private company with significant personal or non-recurring expenses, it is appropriate to calculate an adjusted EBITDA and present a recast or restated financial statement that reflects the normalized financial characteristics of the company along with the actual numbers. However, it is crucial to disclose, explain, and defend each assumption used to adjust the actual EBITDA in a clear, honest, and forthright manner.

What is the difference between an ASSET PURCHASE and a STOCK SALE?

In a stock sale, the seller sells the actual corporation, including all assets and liabilities, while in an asset purchase, the buyer only buys certain core assets of the company. It is entirely negotiable who gets what assets and liabilities at closing. It is important to consult with a qualified tax advisor and an experienced transactional attorney before entering any binding agreements.

Do we know a buyer or seller?

The BishopKnight Group LLC. has ongoing relationships with active parties in several industries, including aviation, automotive, print/media, medical/healthcare, pest/lawn control, retail/services, tech/software, and others. If we don't already know enough good candidates, we will conduct a dedicated search to identify and qualify new prospects.

How long will it take to sell or buy?

Allowing time for the collection and analysis of data for valuation, qualification of prospective buyers or sellers and execution of confidentiality agreements, negotiation of the letter of intent, completion of due diligence, and negotiation of the definitive purchase agreement and the transfer of all applicable licenses, most sellers or buyers can expect a 90 to 120-day process from the decision to sell or buy to the introduction of qualified parties.

How much is my company worth?

Many companies sell within a range between 2.5-5 x normalized EBITDA. Larger, more profitable companies can sell for a premium above the range while smaller, marginally profitable companies can sell for a discount below the range. Actual financial and operational data is required to do a genuine valuation.