Co-Founder George Nemphos and team bring significant expertise in risk allocation to every deal they manage. As Nemphos explained at The Road Map: Valuing and Positioning Your Business for the Next Destination, risk allocation is a tenet of all mergers and acquisitions, not just during a pandemic, and certain “phantoms” may be lurking in the details.
There are many new landscapes and rocky terrain ahead for business owners to navigate. Advisors bring expertise, options, contacts and security to the table.
During The Road Map’s third panel, What Do Transactions Look Like With All the Current Detours?, experts described how the process transforms from a drive to a dance, and provided key insights:
- Covid-19 is a factor, especially with internal sales, as commercial banks are underwriting more conservatively.
- ESOPs are rare, even over the last 24 months.
- Sellers are taking on more risk allocation, and the manner in which the purchase price is calculated and in which it’s paid is fluctuating.
- Panelists see an emerging trend: Instead of passing a business down to the next generation, many lifestyle business owners are now focused on exit strategies, especially when presented with increased valuations.
- Three-to-five years before an exit, consider these three main buckets: living expenses, growth potential and aspirational spending such as legacy, philanthropy or other acquisitions.
- The best transactions get good grades in these three categories: valuation, currency and post-closing risk.
Larry Wilner (moderator) – CEO, The Strategies That Work
Charles L. Maskell – Founder/Managing Director, Chesapeake Corporate Advisors
John Morgan – Managing Director, Verdence Capital
George Nemphos – Co-Founder, Nemphos Braue
Watch the full panel below:
More highlights and videos from the event:
Panel 1: Detours on the Road to Transitions