Upcoming Events › washington

One of the most frequent discussions we have is “how do you build value in a GovCon?”  The easy answer is “win more contracts.”  But putting aside the obvious, how else do you grow value?  Assuming equal revenues, what might make one contractor more valuable than the next?   And how do you get proactive about not just adding contracts but strategically building enterprise value in a GovCon?

“Business Rich, Cash Poor.”  This is most entrepreneurs the day before their first exit.  Unfortunately this also means that they frequently “under-advised” with little to no financial planning completed before they go to market.  They miss the boat on advanced planning opportunities that should be happening a few years in advance of an exit.

Reps and warranties are one of those things that remain and afterthought deep into a transaction…. Until they aren’t.  Sellers are frequently caught off guard as to what they ultimately are going to rep to, and what the post-closing economics might look like for any issues that creep up.  What’s more – circumspect buyers frequently face competing goals:  speed to closing vs. surety on diligence items (i.e.  to be 100% certain on the risk they are buying takes infinity long…

Selling to employees can be a great way to transition ownership – given the right set of circumstances.  In this session we will discuss the practical considerations with structuring ESOP transactions.  Most transactions are designed as an exit vehicle for a closely held company.   ESOP’s are often viewed as “tax incentive centric” – and as such we’ll discuss tax considerations (and post-tax deal proceeds) for both S-Corps and C-Corps.  We’ll also review what makes a company an ideal ESOP candidate……

Value (or price) is at the heart of every transaction.  Valuation also stands at the intersection of many other critical events for a business owner.  For example: Litigation (divorce, commercial disputes, bankruptcy, shareholder oppression) Equity Incentive plans / ESOP Tax matters (409a, S-Corp Conversions, estate and gift tax) Financial Reporting (Purchase price allocations, goodwill impairment)

A recent survey by PWC and the Family Firm Institute finds that more family businesses are exploring partial liquidity options.  On one hand, prices, demand, and earnings multiples remain very high.  On the other there are many reasons retaining ownership might not make sense: there is a significant risk of obsolescence, and family members are living longer, younger family members are often ill equipped and ill trained to take over the business.  Nonetheless, there remains a significant draw to maintain…

Many transition paths available to business owners are dependent on debt financing.  Understanding how bank’s view deals, debt capacity, and cash flow is critical to assessing the viability of a transaction.  ESOP’s, recaps, partner buy-outs … they all require debt financing.