Advertisement CORPORATE GROWTH & M&A JANUARY 19-25, 2015 S-19 M&A TRANSACTIONS Private company valuations are heading higher BY ROBERT BRUML AND ANDREW GELFAND Private company owners frequently question, “When is the right time to sell a business?” Today’s low interest rates and ample liquidity have generally increased the value of private companies and this environment presents attractive sale opportunities for company owners. With the supply of capital flowing into the coffers of private equity firms and other financing sources exceeding the availability of opportunities, the supply/demand imbalance favors the business owner. Moreover, private equity has flowed well beyond the core industries in Northeast Ohio to include BRUML almost all areas of the economy, including health care, business services, media and technology. If you think your company is too small, it may complement an GELFAND existing platform company owned by a private equity firm. If you are reluctant to sell the entire business, you may consider a “minority recapitalization” with private equity or an alternative lender that can provide liquidity without a change of control. Strategic buyers also have aggressively reentered the acquisition market to complement organic growth. Today’s economic environment is conducive to meeting your financial goals. With low interest rates and robust financing markets in place, company owners should examine strategies to enhance the value of their companies. Some of the value drivers and strategies to consider for both a sale or recapitalization include: are “restated” but supportable r Undertake a “quality of earnings” analysis r Emphasize new product or service offerings r Build brand recognition and market reputation r Build depth in the management team r Complete key agreements with customers and suppliers r Create a defensible market position with diversification r Invest in proprietary technology or patent portfolio r Make the case for market, product or financial synergies r Develop financial projections that are credible Eventually interest rates will rise and there will be a pullback. The present timing, however, offers a unique opportunity for private owners to achieve liquidity at favorable values. Having a proactive and experienced M&A advisory firm should be part of your “value added” planning if you are considering a sale or financing. Robert Bruml is President of Bruml Capital Corp. Contact him at 216771-6660 or bob@brumlcapital.com. Andrew Gelfand is Senior Vice President of Bruml Capital Corp. Contact him at 216-771-6660 or andy@brumlcapital.com. Solutions Realized Whether your business has plans to grow from within, make acquisitions, or recapitalize, one thing is clear: It’s critical to have a knowledgeable banking partner in your corner. That’s why businesses depend on FirstMerit Bank’s expertise in Business Credit and Sponsor Finance to help turn their plans into success. As a preferred capital provider for private equity groups, we’re here to listen, to learn, and to understand your business and your goals. Let us show you why these great companies chose FirstMerit Bank. A portfolio company of: A portfolio company of: A portfolio company of: $29,000,000 Senior Secured Credit Facilities Sole Lead Arranger & Administrative Agent February 2014 $10,000,000 Senior Secured Credit Facilities Sole Lead Arranger & Administrative Agent March 2014 $14,000,000 Senior Secured Credit Facilities Sole Lead Arranger & Administrative Agent May 2014 A portfolio company of: A portfolio company of: A portfolio company of: $49,000,000 Senior Secured Credit Facilities Sole Lead Arranger & Administrative Agent May 2014 Undisclosed Amount Senior Secured Credit Facilities Sole Lead Arranger, Sole Bookrunner & Administrative Agent May 2014 Undisclosed Amount Senior Secured Credit Facilities Sole Lead Arranger & Administrative Agent July 2014 r Present financial results that A portfolio company of: A portfolio company of: ortf lio compan f: tfoli p portfolio company of: $7,500,000 Senior Secured Credit Facilities Sole Lead Arranger & Administrative Agent November 2014 TO LEARN MORE, CONTACT: Undisclosed Amount Senior Secured Credit Facilities Sole Lead Arranger & Administrative Agent November 2014 Joe Kwasny, Senior Vice President, Business Credit, at 330-849-8736 or joe.kwasny@firstmerit.com. Jacqueline Hopkins, Managing Director, Sponsor Finance Group, at 312-429-3618 or jacqueline.hopkins@firstmerit.com. Member FDIC 3637_FM14 firstmerit.com Crain’s Cleveland Business Custom Publishing