Buyouts: Success for Owners, Management, PEGs, ESOPs and Mergers and Acquisitions + Website (Wiley Finance)

Buyouts: Success for Owners, Management, PEGs, ESOPs and Mergers and Acquisitions + Website (Wiley Finance)

By: Scott Miller (author)Hardback

1 - 2 weeks availability

Description

The definitive guide to best practices for mastering techniques of the insider-led transition planning A must have book for business owners, key employees, and their advisors who need to be aware of the full spectrum of succession options, Buyouts provides objectives, advice, steps, and a host of examples on the full spectrum of insider-led buyouts. A road map for CPAs, it presents the parameters for many of the major industry segments, techniques for managing risk, providing retention and performance incentives for key personnel and insights into getting deals financed. * Features advice and examples of insider led buyouts * Essential guidance on succession options for business owners, key employees, and their advisors * The 411 on selling your company for a fair price, maintaining control over the process, and realizing lifelong goals Transition planning is becoming a hot business topic as millions of business owners head into retirement. The fact is that only a limited number of privately held companies will be successfully sold to third parties. A road map for CPAs, Buyouts presents the parameters for many of the major industry segments, techniques for managing risk, providing retention and performance incentives for key personnel, as well as insights into getting deals financed.

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About Author

SCOTT MILLER, CPA, ABV, CVA, PFS, CMAP, is President of Enterprise Services, Inc. (ESI), a nationally recognized firm in ESOP consulting and valuations, with over 500 clients. An entrepreneur with an extensive history of senior-level industry experience and significant equity ownership in his employers, Miller has authored four professional publications for AICPA on mergers and acquisitions, buying and selling business, ESOPs, and valuing ESOPs. Since founding ESI, Miller has worked with hundreds of businesses throughout the country on strategic transition planning and closing transactions.

Contents

Acknowledgments xvii INTRODUCTION The New Reality for Business Owners in 2012 1 The Middle Market 2 Not Another Mergers and Acquisitions Book 3 Chapter Organization 4 CHAPTER 1 Buyout Examples 7 Case Study SRC Holdings, Corporation 7 Starting at Ground Zero 9 The Great Game of Business 9 Looking into the Future 10 Case Study SSG Financial Services 11 Impact of the Plan 12 Intangible Benefits 12 Looking into the Future 13 Case Study Quality Assembly and Logistics, LLC 14 Success Factors 15 Case Study Jumbo Heater & Manufacturing Company, Inc. 16 Tensions and Failure 17 Lessons Learned 18 Summary 19 CHAPTER 2 The Economy 21 Brief Overview of the Current Recession 21 Crises Following Wall Street 23 Prospects for the Immediate Future 2012 and 2013 24 Near Term Regulatory Environment Tax Increases 25 Additional Regulations Coming 26 The Longer View 26 Global Perspective 27 Summary 27 CHAPTER 3 Finance 29 Community Banks 30 Impact of Pending Dodd-Frank Act 31 Secured Loans 32 Regional and National Money Center Banks 32 Mezzanine Funds 33 Private Equity 34 Small Business Administration and Government Sources 35 Seller Notes 36 Summary 37 CHAPTER 4 Valuations 39 Purpose of the Valuation 40 Determining the Transaction Consideration 41 Price and Terms Briefly Examined 41 Standard of Value for Transactions 42 Fair Market Value 43 Adequate Consideration (Employee Stock Ownership Plan and Trust Specific) 44 Investment Value 45 Fair Value 45 Emotional Value What a Buyer and Seller Perceive 46 Types of Buyers and Sellers 46 Attributes of Ownership Control and Minority Positions 47 Control Position (Enterprise Value) 47 Lack of Marketability 49 Additional Adjustments to Valuation 50 Three Valuation Approaches: Income, Market, Asset 50 Income Approach 50 Market Approach 54 Asset Approach 59 Summary 61 CHAPTER 5 Industries and Businesses 63 Technology and Software 64 Communications 65 Energy 65 Commodity Goods Retail Food and Agriculture 65 Healthcare 65 Manufacturing 66 Construction 66 Main Street Businesses 66 Discretionary Products and Services Industries 67 Professional Services 67 Summary 67 CHAPTER 6 Professional Advisors 69 Attorneys 69 Certified Public Accountant 70 Financial Advisors 71 Case Study: The Maher Group 71 Investment Bankers 72 Case Study: The McLean Group 73 Behavioral Science 73 Case Study: Humber Mundie & McClary 74 Key Employees 75 Board Members or Advisory Members 76 Family 76 Summary 77 CHAPTER 7 Documents and Due Diligence 79 Due Diligence for the Seller 79 Have an Exit Plan Know Your Options 80 Review Legal Requirements 81 Identify Advisory Team 81 Optimize Value 81 Put the House in Organizational Order 82 Address Key Employees 83 Due Diligence for the Buyer 83 Key Employee Leadership 84 Selection of Advisors 84 Structuring the Transaction 84 Financial Considerations 85 Tax Planning 86 Review Legal Issues 86 Common Documents and Key Covenants 86 Term Sheet 86 Confidentiality Agreement 87 Letter of Intent 87 Stock or Asset Purchase Agreement 87 Loan Agreement and Notes (Bank and Seller Financing) 89 Employment, Non-Solicitation, Incentive, and Retention Agreements 89 Leases Real Estate and Other Assets 90 Summary 90 CHAPTER 8 Short Course on Taxes 91 Tax Issues for the Seller 91 C Corporations and S Corporations 92 Asset Sales and Stock Sales 93 Transaction Terms to the Seller 97 Tax Issues for the Buyer 98 Reporting an Asset Sale IRS Form 8594 98 Stock Sales 99 Transaction Terms to the Buyer 100 Summary 101 CHAPTER 9 Buyouts Non-Sponsored Management 103 Advantages 104 Cautions 105 Seller Assistance 105 Buyer Commitment 106 Transaction Size 106 Valuation Insights 107 Valuation Assistance 107 Practical Considerations 108 Viewpoint of the Seller 109 Have a Plan to Exit the Business 110 Time Is an Ally 110 Viewpoint of the Buyer 111 Management Leadership 111 Professional Advisors 112 Legal Counsel 112 Financial Advisors 113 Family Members 113 Risk Environment 114 Financing the Transaction 114 Technical Matters 115 Records and Financial Reporting 115 Determine Financial Resources 116 Facilities 116 Valuation 117 Structuring the Transaction Stock Sale 118 Structuring the Transaction Asset Sale 120 Successor Management 121 Summary 125 CHAPTER 10 Buyouts Sponsored Management 127 Advantages 128 Financial Assistance 129 Carried Interest and Management Fees 130 Valuation 131 Viewpoint of the Seller 132 Non-Recourse Issues 132 Total Transaction Consideration 133 Viewpoint of the Buyer 133 Interests of the Private Equity Group 133 Envy Ratio 134 Interests of the Management 135 Mutual Commitments 136 Professional Advisors 137 Risk Environment 138 Reasonable Expectations 138 Technical Matters 142 Tax and Legal Structure of the Company 142 Private Equity Group Funding 143 Professional Support 143 Summary 144 CHAPTER 11 Buyouts Sponsored 145 Advantages 146 Cautions 147 Valuation 148 Auction Environment 149 Viewpoint of the Seller 150 Viewpoint of the Buyer 151 Professional Advisors 153 Risk Environment 153 Today s Reality 154 Technical Matters 156 Capital Structure 156 Carried Interest and Management Fees 157 Summary 157 CHAPTER 12 Buyouts Management and Employee Stock Ownership Plans and Trust 159 Advantages 160 Traditional Uses of an Employee Stock Ownership Plan and Trust 160 Selling Stock to the Employee Stock Ownership Plan and Trust 161 Purchase of Stock with Pre-Tax or After-Tax Dollars 162 Employee Stock Ownership Plan and Trust as a Shareholder 162 Cautions 163 Repurchase Obligation 164 Valuation Insights 165 Viewpoint of the Seller 166 Selling to the Associates that Made the Company Successful 166 Financing Considerations 167 Viewpoint of the Buyer 168 Employee Stock Ownership Plan and Trust Attributes 168 Professional Advisors 169 Employee Stock Ownership Plan and Trust Trustee 169 Employee Stock Ownership Plan and Trust Literate Counsel 170 Independent Appraiser 170 Other Advisors 171 Risk Environment 171 Standards for Likely Success 172 Technical Matters 180 Employee Stock Ownership Plan and Trust and Qualifying Stock 181 Employee Stock Ownership Plan and Trust Trustee 181 Funding Methods and Contribution Limits 183 Multiple Qualified Benefit Plans 184 Employee Stock Ownership Plan and Trust Tax Issues and Incentives 184 IRC Section 1042 Tax-Free Rollover 185 Repurchase Obligation 187 Anti-Abuse Provisions S Corporations 187 Other Shareholders and the Employee Stock Ownership Plan and Trust 188 Summary 190 CHAPTER 13 Buyouts 100% Employee Stock Ownership Plan and Trust 191 Advantages 192 Traditional Uses of an Employee Stock Ownership Plan and Trust 193 Selling Stock to the Employee Stock Ownership Plan and Trust 193 S Corporation Attributes 194 Cautions 195 Corporate Governance 196 Acquisition Debt Analysis 196 Valuation Insights 197 Paying for Control 197 Viewpoint of the Seller 198 Financial Assistance 198 Viewpoint of the Buyer 199 Senior Management Issues 199 Employee Stock Ownership Plan and Trust Trustee 200 Professional Advisors 201 Acquisition Debt Considerations 202 Risk Environment 202 Case Study Sentry Equipment, Inc. 206 Case Study Chatsworth Products, Inc. 208 Technical Matters 210 Employee Stock Ownership Plan and Trust Trustee 210 Funding Methods and Contribution Limits 210 Multiple Qualified Benefit Plans 211 Employee Stock Ownership Plan and Trust Tax Issues and Incentives 211 Repurchase Obligation 212 Anti-Abuse Provisions S Corporations 212 Corporate Governance in the 100% Employee Stock Ownership Plan and Trust Company 213 Summary 214 CHAPTER 14 Buyouts Professional Firms 215 Architectural and Engineering, Public Accounting, and Management Consulting Firms 215 General Observations for Professional Service Firms 217 Architectural and Engineering Firms 218 Viewpoint of the Seller 218 Viewpoint of the Buyer 219 Valuation Insights 220 Risk Environment 221 Technical Matters 223 Public Accounting Firms 224 Viewpoint of the Seller 224 Viewpoint of the Buyer 226 Valuation Insights 227 Risk Environment 227 Technical Matters 229 Management Consulting Firms 230 Viewpoint of the Seller 230 Viewpoint of the Buyer 231 Valuation Insights 231 Risk Environment 232 Technical Matters 232 Summary 233 CHAPTER 15 Buyouts Using Parallel Companies 235 Advantages 236 Cautions 237 Valuation Insights 238 Viewpoint of the Seller 239 Viewpoint of the Buyer 239 Professional Advisors 240 Risk Environment 241 Technical Matters 244 Summary 244 CHAPTER 16 Buyouts with Family and Management 245 2010 Tax Law Update 245 Advantages 246 Long-Term Horizon 247 Cautions 248 Remaining Competitive 249 Valuation Insights 249 Valuations Involving Non-Family Investors 250 Viewpoint of the Seller (Founding Generation) 250 Behavioral Issues 251 Viewpoint of the Buyer (Next Generation) 251 Practical Experience 252 Professional Advisors 253 Risk Environment 254 Lack of Diversification 254 Technical Matters 256 Psychological Considerations 256 Tax Efficiency Gift Taxes and Purchases of Stock 257 Historical Perspective on Taxes 257 Tax Reform Act A Financial Benefit to Families 258 Gift and Estate Taxes Following December 31, 2012 260 Tax-Efficient Succession Strategies 260 Strategies to Provide Income to the Founding Family Members 260 Strategies to Compensate Key Employees 264 Summary 265 CHAPTER 17 Buyouts with Employee Cooperatives 267 Advantages 268 Cautions 270 Valuations 271 Viewpoint of the Seller 271 Viewpoint of the Buyer 272 Professional Advisors 272 Risk Environment 273 Case Study Select Machine, Inc. 274 Case Study Cooperative Home Care Associates 275 Technical Matters 277 Employee Cooperatives 277 Tax Deferral with IRC Section 1042 277 Employee Cooperative Transaction Considerations 278 Multi-Stakeholder Cooperatives 279 Comparison with Employee Stock Ownership Plans and Trust 279 Summary 281 CHAPTER 18 Buyouts of the Smallest Companies 283 Advantages 283 Cautions 284 Limited Transition Options 284 Valuation 285 Industry Rules of Thumb 285 Viewpoint of the Seller 286 Realistic Outlook 287 Viewpoint of the Buyer 287 Professional Advisors 288 Risk Environment 288 Technical Matters 289 Financing the Transaction 289 Facilities 290 Summary 291 CHAPTER 19 Inside Buyouts Compared with Sale to Outsider 293 Relative Negotiating Strength 293 Where s the Money? 294 Seller Skin in the Game 295 Asset or Stock Sale 296 What Are You Really Getting? 297 Contingency Payments 298 The Day After 298 Time Uncertain Getting to the Close 299 Investment Bankers and Intermediaries 299 Common Third-Party Buyers 300 Strategic Buyer 300 Competitors 300 Suppliers and Key Customers 301 Private Equity Firm 302 Summary 302 About the Website 305 Index 307

Product Details

  • publication date: 28/09/2012
  • ISBN13: 9781118229095
  • Format: Hardback
  • Number Of Pages: 328
  • ID: 9781118229095
  • weight: 560
  • ISBN10: 1118229096

Delivery Information

  • Saver Delivery: Yes
  • 1st Class Delivery: Yes
  • Courier Delivery: Yes
  • Store Delivery: Yes

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