Company sees widespread adoption of its proprietary exit strategy software, increased demand for expertise as owners of mid-market companies struggle to sell their businesses
B2B CFO, nation’s largest CFO and business transitions services firm, today released a summary of its Partners expertise in exit strategy leadership, highlighting a rapidly expanding client roster for business transition work and widespread adoption of the firm’s proprietary exit strategy software. The summary, completed through a survey of the firm’s 233 Partners in April 2016, showcased expertise featuring 1,621 completed business transitions with more than $51 billion in sales value. With an average of seven business transitions per partner, B2B CFO has moved into a leadership position as the largest source of mid-market business transition experts in the nation.
“Reaching this milestone affirms our leadership role in mid-market business transitions,” said Jerry L. Mills, CEO and Founder of B2B CFO. “Our Partners bring unparalleled expertise and talent to guide business owners going through a sale or acquisition, which typically is an extremely turbulent time in their lives. Combined with the tools, technology and resources that we have created specifically for exit work over the last three years, it is no surprise to me that more and more owners are turning to our Partners for strategic solutions.”
B2B CFO added its exit services to complement its CFO services portfolio in 2013. Since then, the firm has published guidebooks, certification programs and even created proprietary software to assist business owners of privately-held, small and mid-market companies in the sale of their businesses. The firm’s Partners are noting an increase in exit strategy engagement work.
“We have dedicated ourselves and our resources to meet the growing demand of business owners who are ready to transition from their companies,” added Mills. “While we still continue to provide strategic CFO services, providing leadership in business transition was a natural fit for our Partners and their existing experience, measured in this survey, proves it. We currently have 233 Partners across 46 states. This group is the only one in the nation that can make the claim of having completed 1,621 business transitions with a sales value in excess of $51 billion. I’m so proud of our 233 partners and the value they bring to the table, and I know that business owners will benefit tremendously from our experience.”
This study of the 1,621 sales and acquisitions reflects the many options when transitioning out of a business, including Strategic, Financial, Private Equity Group, Management Buyout, ESOP and other choices.
Business owners need to understand that they have multiple choices with a business transition. They should consider gaining knowledge on each and every one of these options. Each option has both positives and negatives. Each option will have different financial and non-financial consequences to the business owner. It is paramount that they gain knowledge on each potential type of buyer in order to understand consequences to them in a possible future transaction.
The largest type of buyer with these 1,621 transactions was a Strategic Buyer (63%). According to Mills, this is very revealing as typically, a Strategic Buyer offers the largest multiple in a transaction. This usually means they pay more for a transaction that the other categories of buyer since strategic buyers sometimes buy the expertise of a company. Mills continued: “I had that happen to me a few years ago. I had a client in Tempe who created a specialized software product. It was the best in the world in its class. My client sold his company to a Strategic Buyer who needed my client’s software to enhance their product. The company who purchased my client ended up selling their company to a Strategic Buyer who wanted all of the software of both companies.”
Below are other key reasons Strategic Buyers will buy a company and may pay more than other types of buyers.
- Market Share – It is sometimes easier for a Strategic Buyer to increase their market share by purchasing a company. Most growth companies are interested in increasing market share. They often do extensive financial analysis and find it costs less money and time to purchase a company to increase market share.
- Competition – Strategic Buyers sometimes purchase a company solely for the purpose of keeping that company away from a competitor that might also be interested in increasing their market share.
- Customers – Strategic Buyers often find it easier to buy a company just to get their customers. This happens when the owner of a company has very good relationships with its customers and the Strategic Buyer knows the only way to get to those customers is through a purchase of the company who has those customers.
But B2B CFO is not the only company seeing business sales on the rise. B2B CFO’s survey is complimented by BizBuySell’s First Quarter 2016 Insight Report shows highest number of small businesses listed for sale since 2009.
San Francisco-based BizBuySell reported that the median revenue and median cash flow of small businesses sold in the first quarter of 2016 reached their highest levels since the largest business-for-sale marketplace first started tracking data in 2007. This is notable as the increased financials are resulting in higher sale prices for small businesses. The full results are included in BizBuySell’s Q1 2016 Insight Report, which aggregates statistics from business-for-sale transactions reported by participating business brokers nationwide.
“We’ve entered a time when thousands of baby boomers are going to want to sell their businesses,” added Mills who has been predicting the “Baby Boomer Tsunami” since 2013. “I’m proud to say that B2B CFO is on the forefront of providing strategic solutions that will help these business owners through this time.”