News & Resources
We developed a guide that covers topics on the MBO process from both the management and shareholders perspective.
The success of the deal now hinges on ensuring working capital targets, and any potential adjustments, satisfy the interests of both the buyer and seller. It doesn’t matter how big the deal is, at some point, and perhaps initially with no apprehension, you’ll encounter a discussion about working capital during the M&A process.As advisors we have routinely witnessed the problems that arise from failing to appropriately negotiate working capital targets early in the process. These problems can limit the ability of both parties to come to consensus in other areas of negotiation and can ultimately have profound impacts on the final sale price of the company.
You have received an offer for your business based on a multiple of EBITDA. What is EBITDA and are you sure the multiple is right?
Immersed in finance theory, my cohorts and I analyzed numerous public companies, performed financial analysis on their reported financials, and prepared valuation models using discounted cash flow (DCF) methodologies to find the intrinsic valuation of these companies. We then, with great confidence (and in hindsight, with great naivety), told the world whether the price of the stock was overvalued or undervalued.We were kings of Fundamental Analysis (FA). We viewed trendy valuation methodologies at the time (such as ‘value per engineer’) as pure gobbledegook. According to Investopedia, fundamental analysis is a method of measuring a security's intrinsic value by examining related economic and financial factors.
You may not know it, but some people go crazy for sneakers! So much so, there is even a “stock exchange” for buying and selling and tracking the value of sneakers called StockX. StockX’s last valuation round placed the company’s value at $1.1-Billion.Just for a day, we thought we would get into the craze! It all started when driving into work on a Saturday listening to CBC radio. The host was interviewing a local skate shop called Top of the World, that was lucky enough to have received 30 pairs of Nike’s SB Dunk Travis Scott limited edition sneakers. Don’t know who Travis Scott is? Neither did we. His claim to fame is that he dated Kylie Jenner.
The CFO plays a key leadership role in an organization, acting as the trusted business advisor to the CEO and the Board of Directors, by providing them an objective view of the financial performance of the business, while holistically assessing the company’s risks and opportunities.Today the CFO role is not viewed as solely keeping score or maintaining operational efficiency (cost containment, controls, quality of data, defined processes, etc.) it’s about “operational agility” and the CFO’s ability to collaborate, focus on growth, embrace a culture of adaptive learning and to effectively deliver analytics that are both meaningful and change agents for the company.
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