Your Orlando Florida Business Broker

Impact of the New Tax Law When Selling Your Business February 8, 2018  by  Michael Shea PA Starting in 2018, the New Tax Law will have a enormous impact on middle market businesses. This is true whether you are at the point in life where it’s time to sell or if you want to grow your business by acquiring other companies. Sell-Side Let’s talk first about those who want to sell their company. If this is you and you want to stop reading, all you need to know is that selling now will cost you substantially less in income taxes. You get to take more home after tax. Deductions (depreciation) that have sheltered income for you in the past at 35% to 39.5% tax rates will now be taxable (recaptured) at rates as low as 21% to 29%. Most transactions are structured as a sale of assets which places the seller and buyer in the frustrating process of making an allocation of purchase price among the depreciable assets, working capital and intangible assets such as goodwill. This ...

The Frustrations of Buying A Business January 23, 2018  by  Michael Shea PA Time and Time again I have met buyers who are encountering  frustrations  in the buying of a business. The reasons vary from buyer to buyer but if I may let me offer some specifics to the buying process as it relates to the Orlando Florida and Kissimmee Markets. 1. First thing, recognize t that there is a market and there is competition. Orlando is one of the few places where there are outside factors like immigration buyers that impact the purchase process. Buyers of businesses looking for visas have additional concerns like steady cash flow, simplicity, need for home-based businesses, and the ever-present concern of the target meeting the needs of the USCIS for E2 investor Visa’s 2. How you did things in your country or state or in your past professional life will not dictate the process here on the ground. There are outlined and defined processes here. Choosing to accept them a...

Avoid Unwanted Surprises in Due Diligence April 12, 2017  by  Michael Shea PA   (Edit) Avoid Unwanted Surprises During Due Diligence Buyer of Businesses often uncover unwanted surprises during due diligence — resulting in downward purchase price negotiations, lower valuation multiples, lenders getting scared off, or the deal falling through. In today’s economic climate, potential buyers are willing to search long and hard to identify the best acquisition candidate. Transparent financial and operating information is more important than ever. For companies anticipating sale, sell-side due diligence can identify and quantify issues and exposures that could negatively impact a deal. How Sell-Side Due Diligence Helps Sellers According to a recent survey commissioned by BKD, 66% of closely held/family-owned businesses anticipate a change in ownership in the next 10 years. For would-be sellers looking to maximize value, it is prudent to begin preparing now. Sel...

What Add Backs are Legitimate in an M&A deal? March 11, 2016  by  Michael Shea PA An add back, for the uninitiated in M&A numbers, is an expense that is added back to the profits (most often earnings before interest, taxes, depreciation, and amortization, or EBITDA) of the business for the express purpose of improving the profit situation of the company. It’s a bit of alchemy; when you toss in enough add backs to the profits of a company, you turn EBITDA into the mythical “adjusted EBITDA.” The theory behind these add backs is that these expenses are purported to be extraneous, one-time, and/or “owner’s” expenses. In plain English, these add back expenses will either go away once the company is in the hands of the new owner or won’t be incurred again. Some legitimate add backs include the following: Adjustments to owner’s compensation: Many owners of closely held companies, especially successful and highly profitable ones, give themselves outsized salarie...