March, 2016     
MidMarket Talk:

Join Us In Welcoming Our Newest Members!

 

The Alliance of M&A Advisors invites you to check out our new Members here.

 

Visit our Member Directory to find Alliance Members near you! 


 
At the Alliance of M&A Advisors, we know that our members are among the best in their field. MidMarket Talk offers Alliance Members the platform to share their research, insight, and professional experiences. The Alliance offers Networking opportunities, education, and resources geared toward those in the middle market. Interested in becoming a Member of the Alliance of M&A Advisors? Visit us online at www.amaaonline.org
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Submit articles and educational material for our monthly Newsletters and receive CPE Credit! Please send to: lhuntley@amaaonline.org
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CMAA

Join Us For A Special 50th Class

May 2-6 in Chicago, IL

 
 
The CM&AA (Certified Merger & Acquisition Advisor) Certification has become the "Gold Standard" for Middle Market Corporate Financial Advisors.  The 5-day program builds on your existing skills providing you with the necessary framework--and network--to further advance your professional and financial goals as well as those of the clients you serve.
 
Other dates and locations available  online, call us at 312-856-9590, or reach us by email at info@amaaonline.org

Upcoming Chapter Meetings
Keep an eye out for these
Upcoming Meetings

Attend a Chapter Meeting near you! 
  
Mid-Atlantic Philly Chapter Meeting
Wednesday, March 16th

New York Chapter Meeting
Wednesday, March 16th

Arizona Chapter & TMA Meeting
Thursday, March 24th 

New England Chapter Meeting
Monday, March 28th

Dallas Chapter Meeting
Thursday, April 7th 
Coming Soon 

Get Involved
The below chapters are in the development stages.  Want to be more involved with a new chapter in your area? Please email  Corinne Samuelson, and she will schedule a call with David Belew, Director of Member Services.
  • Gulf Area (Houston)
  • Cleveland
  • Florida
  • Northern California
  • Southern California
  • Brazil
  • Minneapolis
  • China
  • Europe
Join Today!
Why Become a Member of The Alliance?
  • Gain access to valuable Member Benefit technology platforms
  • Gain a valuable network of M&A expert Members who act as resources for other Members
  • Featured on our Member Directory, accessible to the public
  • Receive discounted rates to Alliance of M&A Advisors events
2016 Member Outreach 

The Alliance will be expanding in 2016. We are looking to our Members for guidance as we decide how to best use new resources and manpower this year. Over the next month, we will be reaching out to our Members for feedback. Be on the lookout for an email with more details. 



From the Outside In - The Buyer's Perspective on Business Value
Thursday, April 28 2016 
7:15AM-6PM

SPECIAL AM&AA Pricing: $275 thru 4/14, after 4/14 $325  
Use Code: certification 

The vision of XPX is that every business owner will create sustainable, transferable value in their business. The 2016 XPX Summit's theme "From the Outside In - A Buyer's Perspective on Value" supports that vision. We've brought together more than a dozen vibrant speakers and panelists to enlighten and entertain business owners and their trusted advisors.

We're proud to present Christopher Oddleifson, the CEO of Rockland Trust, sharing how the bank has successfully identified and acquired a number of banks over the last several years. Dr. Daniel Korschun, the co-author of "We Are Market Basket" will share how the company created a culture focused on prioritizing stakeholders over shareholders, and in the process became an industry leader. There are a number of concurrent breakout sessions addressing areas where business owners can make changes that help their bu sinesses grow today and increase their value down the road.



Keiter Stephens Advisors announces the sale of Cara Donna Provision Company
Keiter Stephens Advisors ("KSA") is pleased to announce the successful sale of Cara Donna Provision Company (the "Company") located just outside of Boston, MA. to US Foods ("USF").  USF has agreed to acquire the assets of the Company in a transaction scheduled to close on March 4, 2016.
For three generations Cara Donna has been a family owned business focused on high principles and exceptional customer service.  The Company serves over 1,300 customers in several specialty markets as well as traditional foodservice operators across Massachusetts, Rhode Island, New Hampshire, Maine and Connecticut.  Members of the Cara Donna family, management and staff will remain on during a transition period to help ensure the smooth transition of the business to USF's facilities in Seabrook, NH and Norwich, CT.

For more information visit: www.ksadvisorsllc.com

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Where's the Business Selling "Tsunami"?

 

By Dan Roth - Managing Director, IBG Business

In collaboration with Alliance Member, John Zayac - Managing Partner, IBG Business

 

Exit planning and business broker firms predicted millions of companies would flood the market as baby boomers focused on retirement. These companies were projected to hit the market starting in 2011, the first year baby boomers reached the age of 65. Four years later, these predictions prove to be overly optimistic and the anticipated consequences have not happened.
U.S. Census Bureau data indicates baby boomers own about two-thirds of businesses with employees in the U.S. - about 4 million companies. Theoretically, if an equal number of boomer business owners attempt to sell their companies each year as boomers turn 65, 210,000 businesses would hit the market each year until 2030.
This predicted "tsunami" of businesses for sale relied on the law of supply and demand to suggest business valuations would plummet and be difficult to sell. Owners were advised to sell fast before the value of their business, and the majority of their net worth, collapsed.
While the number of sellers has increased since 2011, the number of completed sales is climbing at an even faster rate. PitchBook, a private capital market research firm, analyzes the number of announced deals in the lower middle market - a deal size of $10 million to $100 million. In 2015, the number of completed transactions was 70 percent more than 2010.



"I don't subscribe to the idea that a flood of companies looking to sell will struggle to find buyers due to oversupply. A company's ability to sell will depend on its own fundamentals," said PitchBook analyst Daniel Cook.
Since the financial crisis, median M&A valuations for deals under $100 million have hovered around $15 million. "Despite a large increase in sellers in the market, valuations have remained steady, even increasing 4 percent in 2015," said Cook.  "This increase is even more profound when you remove oil and gas transactions from the equation, with median 2015 valuations increasing 6 percent from their 2014 levels."
You can read the full article here.
2016 Summer Conference Dates Announced!

 

Accelerating MidMarket Growth!!  

     

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Feeling Charitable?
How The Philanthropic Free Up Funds and Save Money Doing It
 
An interview with Ryan Boland
VP of the Complex Asset Group for Fidelity Charitable(R)
 
Alliance: Ryan, I was very interested to hear what you do for a living because it
is so specific and unique. Can you tell us about what you do and the types of people you work with?

Ryan: Sure thing. I work with charitably inclined individuals and their advisors. I am an attorney in the Complex Asset Group at Fidelity Charitable. Fidelity Charitable is a public charity and our mission to help people give more efficiently. I help donors give privately held business interests to charity.
 
Alliance: What are the tax advantages of giving these assets to charity vs just giving cash?
 
Ryan: Giving privately held business interests generally provides significant tax advantages over simply selling the private stock or private business and then giving cash to charity using after tax proceeds. By giving the private business interest/stock to charity before there is a sale, the donor is generally entitled to a fair market value charitable deduction and in most instances the charity does not pay tax when it sells the interest. As a result, donors of these assets may achieve a 20-30% tax efficiency over simply selling the interest themselves, then donating cash.

Alliance : This is something that I had not really heard of before. Can you tell me how many people you work with each year?

Ryan: Through our Complex Asset Group at Fidelity Charitable, we accept more than 500 such contributions each year and in 2015  this represented more than $600 million in charitable contributions. So, it's happening on a great scale but we feel it is still growing at a significant pace as more people learn about the strategy.

Click here to continue reading.

Ryan Boland is VP of the Complex Asset Group for Fidelity Charitable(R), an independent public charity with a donor-advised fund program.  Mr. Boland is responsible for reviewing complex asset contributions for acceptance, developing detailed policies and procedures for complex asset donations; and providing training and education about the Complex Asset Group's unique service offering. 
 
Ryan can be contacted via email or phone: 617-875-8810
 

Asynchronous Risk: How to Stack the Deck through Operational Diligence and Excellence

 

By Timothy Van Mieghem

The ProAction Group
 

Tony Robbins wrote a new book, "Money, Master the Game" in November, 2014; his first in over 20 years. He interviewed the 50 wealthiest people in the world to find out their secret to investing. Two of the principles hit home:
 
1. Don't lose money. (While it seems contrite, the idea that we don't invest when there is meaningful downside risk is substantial.)

2. Asynchronous Risk. (Seek investment opportunities with limited downside and an unbalanced upside.)

Asynchronous Risk occurs when you have an upside disproportionate to the cost and exposure to loss in a transaction.
Let's start with a metaphor. A farmer is selling farmland. He is seeking top dollar for this tillable land through an auction. Can you justify the purchase price it will take to win? What if you could know that the land contains drillable oil? Would you want to know this before the auction is complete? What could be better than competing to buy an oilfield when everyone else thinks it is farmland?
 
In September, during the PEI Operating Partners Forum in NY, we focused on ways to maximize the value of our portfolio companies through growth and margin expansion. The firms asked to speak at this event lead the PE industry in driving operational excellence in their portfolios (and the related improvements in EBITDA and market cap). They grow their companies and keep more of the value they create. Elite. Year after year. Best in Class.
 
However; the majority of the operating partners discussing their approach are not invited into the pre-close diligence process. The majority of these operating partners don't get involved in the company until after the closing.

What does this mean? In our farmland metaphor, this means we have a group of investors competing to buy a limited supply of farmland, and only a few (of the elite) are testing to see if the land is actually an oil field disguised as farmland.


In most transactions, there is operational information that can be learned before the auction is complete - information that can help you find the oil fields. What can we know before we buy a company or compete in the auction process?

In the full article, Timothy outlines the three things we can know before we by a company; true capacity, cost reduction opportunities, and market position game changers. Continue reading here.

March Resource
In Partnership with Divestopedia  
How Your Balance Sheet Impacts Business Value 
By Equicapital Income LP 

A balance sheet is one of the most common starting places for buyers when attempting to assess the value of your company. The following items that flow through your balance sheet may impact the value of your business more than you think.

Capital Expenditures

Most businesses would expect to see relatively consistent annual capital expenditures. On the other hand, a company that is growing or has growth plans would typically have capital expenditures that are greater than the average depreciation expense. This shows investment in the business with stated growth plans that are rather aggressive, but are not matched with corresponding historical or planned increases in capital expenditures. This shows that the company is just hoping for growth instead of truly creating it.
Capital expenditures can impact value in two key ways. If ongoing maintenance capital expenditures are consistent and represent a significant component of otherwise "discretionary" cash flow, this shows a relatively capital intensive business or a business with a slate of older assets that need replacing, and cash flows would be adjusted to show the ongoing nature of these cash outflows. This would reduce the value compared to a business that is not capital intensive or has a newer group of assets with a longer life and a delayed requirement for additional investment. If, on the other hand, the capital expenditures are fairly lumpy and are followed by periods of growth, this shows a business that is building capacity and, although capital expenditures would be considered in forecasting future cash flows, future cash flows would reflect a growth profile because of the consistent investment in additional capacity.
Remember, ultimately, it is a metric known as free cash flow (FCF) that buyers are looking for in your business. FCF is the measure of how much cash a business generates after accounting for capital expenditures, such as buildings or equipment, and is the cash that can be used for expansion, dividends, reducing debt or other purposes. Therefore, while profitability is one measure of the value of the business, FCF is ultimately just as important. In simple terms, know the difference in your business between the capex that is required to maintain current profitability and the capex required for any projected growth. 

Read more here


Middle Market Mingling

"We continue to expand our outreach to other leaders throughout the large global middle market ecosystem. Our leaders are now attending and speaking at events for other related professional associations such as TMA, IR Global, XPX, and many others!"
Mike Nall, Founder and CEO of the Alliance of M&A Advisors

 Santiago Simon del Burgo
 
Santiago Simon del Burgo
IPEM 2016 Conference - Cannes France
 
Structured as a marketplace with hospitality suites and networking events to foster business opportunities, the International Private Equity Market (IPEM) is the world's first international PE event to gather the whole value chain of the Private Equity industry, from PE professionals (GPs, LPs, Debt, Advisors...) to business owners, for 3 days of business meetings and intensive networking.
 
"The first edition of the International Private Equity Market was a success thanks to the 718 participants who came from 32 countries to gather in Cannes." Noted Satiago. " Personally it was an honor to represent the AM&AA at this event."
 
 Ken Sanginario and Diane Niederman
 
Diane Niederman, Mike Nall, and Ken Sanginario
TMA Conference in Las Vegas, Nevada
 
The TMA (Turnaround Management Association) Distressed Investing Conference was held in Las Vegas February 17-19.  Mike Nall, Founder & Managing Director, The Alliance, Diane Niederman, VP Alliances and Ken Sanginario, CM&AA and Founder Corporate Value Metrics, joined over 700 attendees for the two day event which focused on corporate restructuring and distressed investing.     



May 18-20th 2016, at the Marriott Marquis, San Francisco





The Alliance of M&A Advisors
and IR Global


  

 


 
 
We are delighted to share a fantastic opportunity to join IR Global, The Alliance (AM&AA) management team and key members in San Francisco for the IR Global 2016 Mid-Year Conference in San Francisco. We have a strategic partnership in place with IR Global and both organizations benefit greatly from the worldwide representation and many different types of advisors within each group.
  
Event Overview
  •  Exclusive limited ticket event for 150 senior level management figures from legal, financial, advisory firms.
  •  Representation from over 40 jurisdictions worldwide.
  • Event content focused on Leadership & Innovation.  Incorporating a number of networking sessions.
  
Despite it being such an exclusive / limited ticket event, as part of our partnership, we have set tickets aside for Alliance Members.   Please contact Diane Niederman at dniederman@amaaonline.org,  if you would like to learn more.  

 
 



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The Alliance of M&A Advisors┬« 
(The Alliance) is the premiere International Organization serving the educational and resource needs of the middle market M&A profession. Formed in 1998 to bring together CPAs, attorneys and other experienced corporate financial advisors, the Alliance's 1000+ professional services firms - including some of the most highly recognized leaders in the industry-draw upon their combined transactional expertise to better serve the needs of their middle market clients worldwide.