ENLIGN Seminar 2007

transcript

Business Brokerage and the Business Intermediary

Presented by

Bob WatsonAffiliate Broker, ENLIGN Business Brokers

Certified Business Intermediary®

ENLIGN Business BrokersFounded 2003 by Jeff Snell

Raleigh NC headquarters / statewide operations

International Business Brokers Association® member

Certified Business Intermediary® credentials required

Affiliate brokers must have owned and operated a business

Affiliate brokers/intermediaries added 2004-present

The International Business Brokers Association®The International Business Brokers Association (IBBA) is a professional society of

business brokers providing education, conferences, professional designations, programsand services and networking opportunities.

Formed in 1983, IBBA is the largest non-profit association specifically formed to meetthe needs of people and firms engaged in various aspects of business brokerage, and

mergers and acquisitions.Today, the IBBA has more than 1800 members in all parts of the world. The IBBA

strives to create a professional relationship with successful business transaction advisors(i.e. CPA’s, bankers, attorneys, and other related associations) to increase the image andvalue of the IBBA to its members and to be a leader in the exchange of business referrals.

Certified Business Intermediary®68 credit hours of IBBA courses and course examinations

Ethics, financial analysis, pricing/valuation, legal and tax implications 3 years minimum business brokerage and intermediary experience

Comprehensive examination after all successful coursework Background checks

Continuing education requirements International charter and activity

A Business Intermediary’s primary professional responsibility is to -

EDUCATE business owners and prospective buyers

Engaging Owners / SellersReferrals from current and past clients

AccountantsAttorneysBankers

Property ManagersFinancial Advisors

Confidential Financial Review3 to 5 Years of Financial Data (Accountant)

Income StatementsBalance Sheets

Tax ReturnsAsset and Inventory Audits

Marketing MaterialsCompetition

Key CustomersKey Employees

Broker’s Opinion of Most Probable Selling Price (BOMPSP)Seller’s Discretionary Cash Flow (SDCF)

Recasting / NormalizationIdentify all compensation

Fair Market Value of assetsReal estate / lease considerations

Research statistical databases for comparable transactions

Document pluses and minuses for specific caseApply multiple methodologies and weightings

Present BOMPSP and EDUCATE SellerDetermine listing price and sign agreement

Marketing the OpportunityPrepare the commentary

Catalog all confidential documentation (valuation)Compile additional media and auxiliary information

Place the listings

Construct a Confidential Business Summary (if appropriate)

Registering and Qualifying BuyersScreen ALL Inquiries

Non-Disclosure Agreement RequiredBuyer Profile Required

Business Intermediary reviewBuyer is provided access to documentation

Business Intermediary consultation with BuyerBusiness Intermediary schedules meeting for Buyer and Seller

Due Diligence Buyer may request any reasonable information

Seller should be prepared to share all pertinent information Business Intermediary communicates with accountants, attorneys,

and relevant representatives of all parties Business Intermediary’s primary professional responsibility is to

EDUCATE Buyers and Sellers actively encouraged to facilitate

Due Diligence (no “games”)

Letter of Intent / Offer to PurchaseFormal commitment to perform a transaction

Firm dates and time-lineIssues to be determined and resolved

Contractual Conditions and ContingenciesBusiness Intermediary mediates negotiations

FinancingCash / Equity / Banks / SBA

Seller financingSeller transition requirements

Seller management / consulting agreementSeller non-compete

Business Intermediary mediates negotiations

Transaction StructureCash

Earn-outsMulti-tiered financing

Seller performance agreementsAssets / Liabilities

Tax strategiesBusiness Intermediary ensures communications

Business Brokerage and the Business IntermediaryTransaction Value

The value that accounts for all monetary considerations received by the Seller

The value used to report the transaction to industry databases and to compute

Business Intermediary commissions

Transaction Value – IBBA definitionThe total of all consideration passed at any time between the buyer

and seller for an ownership interest in a business enterprise and mayinclude, but is not limited to, all remuneration for tangible and

intangible assets such as furniture, equipment, supplies, inventory,working capital, non-competition agreements, employment and/or consultation agreements, licenses, customer lists, franchise fees, assumed liabilities, stock options, stock or stock redemptions, real

estate, leases, royalties, earn-outs and future considerations.

The ClosingAttorney typically hosts the transaction representatives

Business Intermediary coordinates all parties and all required documents

Documents signedTransaction completed

Follow UpBusiness Intermediary maintains

Seller and Buyer contact tomonitor the transition processand to consult as appropriate

Thank you for your attention.

Questions ?

Presented by

Bob WatsonAffiliate Broker, ENLIGN Business Brokers

Certified Business Intermediary®

Contact InformationENLIGN Business Brokers

2009 Caminos Street

Raleigh, NC 27607

919-341-1100

jsnell@enlign.com

ENLIGN Seminar 2007

Economy & Finance