eNewsletter
September 2018

Featured Clients this issue:
**Details of each client below article

- Outdoor Adventure Sports Outfitter #1518
- Full-Service Provider of Electronic Systems #1118
- Packing and Shipping Franchise #718
  The State of the Business Acquisition Market in Colorado
 
I have commented in recent eNewsletters about the strong market conditions. This month's featured article that was penned by team member, Scott Densmore, quantifies activity on a national basis. Due to the strong Colorado economy, we are also seeing significant activity as demonstrated by the two transactions that we closed last week, and the significant pipeline of transactions in progress, including a full price, all cash, seven figure Letter of Intent for a business that we have not actively taken to market.

If you are considering selling your business, or if you are working with a client that is considering selling in the near future, I would suggest that you consider starting the process now. One of the early steps in the process is determining a range in value for the business. Our team would be pleased to meet with you on a confidential, no obligation basis, to get you started.

Ron Brasch & wife, Una
I am exceptionally proud of the team at The FBB Group, Ltd.,  and  we strive to be good corporate citizens. Special kudos go out to team member, Ron  Brasch, and his wife, Una, for being recognized on Saturday, September 8th, for their outstanding contributions to the Fine Arts Center in Colorado Springs, including Ron's recent tenure as Chairman of the Board.

I would also like to thank my team for its contribution to the UCCS Forum, an event founded by our team over 22 years ago that is anticipated to attract over 600 attendees this year. You can find more information about the Forum later in this publication.
  

NOW IS A GREAT TIME TO SELL A BUSINESS

According to the most recent MarketPulse Report, published by the International Business Brokers Association (IBBA), M&A Source, and the Pepperdine Private Capital Market Project, now is truly a great time to sell a business. Almost 40% of business advisors surveyed said that the current market is the best they have seen in the past five years, over 15% said it was the best they had seen in over ten years, and over 20% said that 2018 is the best year for selling a business that they have ever seen! It is clear from the chart below, that market sentiment is up in all sectors when compared to the same time last year.
 


Many things are contributing to the high prices being paid for appropriately positioned businesses. The economy is going strong, funding is readily available, and interest rates are still relatively low. These factors, combined with high business confidence, are providing major benefits to sellers in the way of higher multiples and more cash at closing.

Multiples in most categories remain high, with the largest rise seen in the $5M - $50M range transaction size. This category has seen its median multiple of EBITDA paid go from 5.4 last year to 5.9.

Cash at closing has increased across most categories, with businesses in the $5M - $50M range again seeing the largest change. Average cash at close for this category rose from 64% in Q2 2017 to 80% in Q2 2018.


 
Good times bring increases, but one increase that sellers are not excited about is the time it takes to close. It seems as though buyers are paying a premium, and they know it. Therefore, many buyers are taking more time in the due diligence process to ensure that they fully understand what they are paying such a high price for.

One of the best ways a seller can speed up the time it takes to sell is to have an experienced team of professionals assist them to navigate the process efficiently. If you are thinking of selling your business in the next three to five years, contact The FBB Group, Ltd. With 90+ years of combined experience, FBB is the team you're looking for to value and market your business, negotiate the best deal, and close the transaction.
 
Reference:
Q2 2018 Market Pulse

The  majority of our business is derived from referrals. Please consider referring our services if you encounter a situation involving the potential purchase or sale of a business.

Ronald V. Chernak
President


 
Inspiring business relationships since 1982!
Outdoor Adventure Sports Outfitter #1518
This well-established, very profitable business has been recognized as one of Colorado's top-rated outfitters.  Activities include not only two very different, exciting adventures, but several parcels of real estate, vacation homes, and a bar and grill.  It's the full deal when looking for outdoor entertainment in the state of Colorado.  Top selling entertainment for individuals, families, and groups.  The business, with an exceptional team of experienced guides and a well-trained staff in place, is an ideal acquisition candidate for an investor or a synergistic acquirer.   
  • Purchase Price...TBS
  • Down Payment...TBS
  • Gross Sales...$3,623,812
  • SDE...$887,951

For more information contact Lynn Lage lynn@fbb.com.
Full-Service Provider of Electronic Systems #1118
This business-to-business service company installs and services fire alarm, security alarm, and communication systems.  It is well known in the industry for providing best in class design, engineering, installation, and monitoring services throughout the state of Colorado.  Thriving since its inception over 30 years ago, the company has prized relationships with large organizations that rely on its expertise in new installations and ongoing service.  As a  trusted and respected supplier to many large organizations , the company is positioned  for continued growth.  Real estate, with an estimated value of $435,000 (subject to appraisal), available to purchase with the business.  Sales through July of 2018 up 13% over the same period in 2017.  
  • Purchase Price...TBS
  • Down Payment...TBS
  • Gross Sales...$1,689,613
  • SDE...$365,942

For more information contact Lynn Lage lynn@fbb.com.
Packing and Shipping Franchise #718
This well-known packing and shipping center in Colorado Springs has been consistently profitable for the last ten years - through both good and bad economic times.   Its location provides small package shipping, custom packing, and freight shipping to both residents and businesses in the surrounding area.    This franchise is part of a well-established, international brand that provides in-depth owner training, advertising support, and very competitive domestic and international shipping rates.  This business should be ideal for either 1) an owner/ operator wanting to buy and grow a local business or 2) a buyer already in the shipping industry
  • Purchase Price...$195,000
  • Down Payment...$195,000
  • Gross Sales ...$374,119
  • SDE...$86,766

For more information contact Rob Amerine rob@fbb.com.

Save the Date! 

Come learn about the trends and dynamics occurring nationally, statewide, and in our community!
 
The UCCS Economic Forum is the premier resource for local economic information. This information is provided for-and-supported-by-local businesses. 
 
Don't miss the opportunity to hear how the global, national, state, and local economies are expected to perform next year. Hear the information you will use to develop your business plan for 2018.

 To see the full agenda and additional details, visit: UCCS Economic Forum
**Terms & Definitions

TBS (To be suggested by Purchaser) - Seller, in his/her sole discretion, has the right to accept or reject all offers.

Seller's Discretionary Earnings (SDE):  A term used to denote a business's cash flow or the amount of pretax money a buyer can expect to earn in first-year operations.

EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization):   All interest, tax, depreciation and amortization entries in the Income Statement are reversed out from the bottom line Net Income (It purports to measure cash earnings without accrual accounting, canceling tax-jurisdiction effects, and canceling the effects of different capital structures.)
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