OCTOBER, 2015     
The Alliance Newsletter is here: MidMarket Talk
MidMarket Talk:
Winter Conference!!!
Orlando, Jan 13 - 15
 Early Bird Rates Now Available!
The Alliance of M&A Advisors (AM&AA) Winter Conference heads to Orlando, FL this January 13-15, 2016.  Join a diverse roster of successful dealmakers to hear their insights about current market conditions, and how they get their deals over the finish line in this changing market.
We expect 500+ attendees representing countries from all over the world. You'll be in good company with key industry players that include:
  • Investment Banks and Intermediaries
  • Leading Private Equity Investors
  • Senior and Mezzanine Lenders
  • CPAs
  • Attorneys
  • Business Valuators
  • Consultants and other Advisors
Plan now to join us in Orlando. Register today to catch the best rates to attend!
Do You Know A Middle Market Thought Leader?

Of course you do! Nominate your peers (yourself included) for the Middle Market Thought Leader of the Year Award.

Nominees must be submitted November 16th. Award recipient(s) will be honored at the 2016 Winter Conference. 
 
Welcome New Members

September 2015 

 

See the full list of our newest Members from September 2015. Click here

 

2016 Dates Now Available 


 
February 29th- March  4th, 2016
Thunderbird Global School of Mgmt
Phoenix, AZ

May 2nd-6th, 2016
DePaul University| Loop Campus
Chicago, IL

September 19th-23rd, 2016
DePaul University| Loop Campus
Chicago, IL

November 14th-18th, 2016
Villa Graziadio Executive Center
Malibu, CA

The "Certified Merger & Acquisition Advisor" (CM&AA) designation serves to maintain the highest recognized standards of professional excellence for middle market corporate financial advisory and transaction services, and to provide a benchmark for professional achievement within that overall body of knowledge.


The Alliance of M&A Advisors is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org
Program Level: Advanced
Delivery Method: Group Live
36 CPE Credit Hours earned

Upcoming Chapter Meetings
Make New Connections!

Attend one of our upcoming Chapter Meetings in a location near you! 
  
Midwest Chapter Meeting
Wednesday, October 28th 2015  
7:30AM- 9:30AM CT

New York Chapter Meeting
Wednesday, November 18th 2015  
5:30PM-8:30PM ET

Philadelphia Branch Meeting
Thursday, December 10th 2015 
5:30PM-8:30PM ET
Save The Date!
Get Featured!
Alliance Members, do you want to be featured in Midmarket Talk?
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  • Tell us about your speaking engagements
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Gain CPE Credit!

 

Submit articles and educational material for our monthly Newsletters and receive CPE Credit! Please send to: lhuntley@amaaonline.org
 

Media Partners Events:
PrivCap Media


2015 Energy Game Change Conference, December 10, 2015
Houston

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

The Alliance - Where The Experts Go


Our Members are among the best in their fields. See what they have to say about the Middle Market and Related Topics Below.
  
The articles below were written by our expert Members. Want to see your article published in the next issue of  The Alliance - MidMarket Talk?   Email us at info@amaaonline.org

Majority Recapitalizations - 3 Reasons Why They Work

Recapitalizations are the way of the future. It is no longer acceptable for an owner to sell their business one day then turn around and go to the shore the next. Private equity investors and strategists alike can bring down their risk profile and increase valuation by keeping owners engaged for some period of time post-closing. If an owner is going to stay around post-closing, why not keep some equity?
Recapitalizations are typically used to fund future growth initiatives, make a company's structure more stable and/or provide liquidity to business owners. When an owner sells over fifty percent of the business, but still maintains ownership in the company, this is a majority recapitalization (less popular but still achievable is a minority recapitalization whereas an owner sells a percentage of the business which is less than fifty percent).
Here are three reasons why majority recapitalizations make sense for business owners:
They keep a piece of the pie.
A business owner may not be ready to fully retire. However, they may be willing to relinquish some of their day-to-day management duties where they may not add as much value as in other areas where they really excel. A majority recapitalization allows owners to remain involved and own a portion of the business while lessening their overall responsibilities.
It's worth mentioning that by keeping original business owners involved, the company culture is less likely to change. Employees who love where they work are more likely to stay engaged and continue contributing to a company's bottom line.

* Learn more about our Certified Merger & Acquisition Advisor (CM&AA) program on the sidebar.

Follow Up: Substantial Fines for Unauthorized Transfer of Customer Data During an Asset Deal- The Wording of the Penalty Order Is Now Available!

The wording of the German Data Protection Supervisory Authority's decision is now available on the case involving the penalty fine imposed based on the unauthorized transfer of customer data during an asset deal. 

According to this, the two possible justification for the transfer of data that were taken into consideration failed to convince in the end for the following reasons:

The so-called "list privilege" as justification for advertising purposes was excluded based on the fact that the list privilege cannot be applied to email addresses...

Value Creation: De-Risking the Business Before a Sale

Much has been written about what business owners should do to improve the value of their business. So much so, that when it comes to developing a set of priorities to get ready for a sales or other transfer process, uncertainty and confusion reign supreme. Depending on who you listen to, advice favors improving sales, enhancing profits, cash flow or market potential, picking the right advisor, etc. Everyone seems to have their own opinion. The fact is, they all play a role in the buyer's perception of how value correlates to the quality of an acquisition target.

The problem is every buyer in an arms-length process looks at the situation somewhat differently. But every seller should strive to get his business presented and classified as an A++ investment opportunity. The one factor that trumps all others in achieving this objective is how much risk is inherent in the business for the buyer. Understanding and "de-risking" the business should be the seller's number one priority before entering into a sale process. A low risk opportunity helps to position the business above other options, creates a competitive buyer environment, increases value, enhances negotiations and deal terms, and minimizes the time to LOI and close. Too much risk can cause a buyer to reject the entire opportunity in short order.

Generally speaking, there is an inverse relationship between risk and quality. The higher the risk in a deal, the lower its quality. So it follows that an A++ deal will have low risk and will get the seller's business on top of the pile for buyers' review. But where does the risk come from, can it be quantified and controlled, and how does it relate to value?

Blood is thicker than... well, oil.

Being in business with a partner presents its own unique set of challenges; when that partner is family, however, the dynamics and complexities increase considerably.  My father was in business with his older brother for more than 30 years.  I still remember conversations around the dinner table where he urged me to go it alone if I ever decided to get into a business.   His frustration originated from two common fundamental tradeoffs in family businesses - a lack of autonomy regarding business decisions and a lack of transparency into the portion of the business lead by his brother.
K Oil

Nevertheless, even though it was difficult at times for my father to work with his brother, in hindsight he proclaims the business would not have been successful without him.  His primary reasoning was they shared the same vision, they each had unique and complementary skills, and their shared responsibility helped to alleviate the burden of owning a business.

Those aspects are certainly important but I believe the truth is much deeper than my father depicted or even realizes.  This is perhaps due to his family's nature.  I am certain the underlying core reason their business partnership was successful for 30 years was the same reason that motivated them to go into business together in the first place -  family values and trust.
As an advisor to closely held businesses I have seen the very best and the very worst of what occurs when mixing family with business.  Being an advisor, candidly I am called upon more frequently for the latter.  As a result, I catch myself building up skepticism regarding mixing the two.  That said, I do on occasion run into family businesses where trust and family values are at the center of their relationship and I am reinvigorated.  I am not declaring that these values are all that are needed to run a successful family business because they are not - but when I think about all my experiences of dealing with family businesses  it is those who demonstrate these two attributes that are always the more successful.

Next time I will address a very important topic- the decision of transitioning a family business to the next generation.  Stay tuned, and as always I hope to hear from you with comments/questions.

Check out more articles by Scott  here
You Asked, We Answered!
 
When asked what new Member Benefit they would like to see, Alliance Members named IBISWorld.

 Meet Your Newest Member Benefit!
 
IBISWorld is the world's largest industry market research provider, offering access to over 1300 US industries or 97% of the economy through an interactive web-based database. M&A advisors turn to IBISWorld to reduce hours of research time when it comes to crucial industry analysis necessary in the M&A due diligence process. IBISWorld is also a critical tool in business development when it comes to identifying and targeting those industries prime for M&A activity.
 
AMAA Alliance Members receive 10% discount* on new IBISWorld 12-month subscriptions when AMAA membership is mentioned. IBISWorld builds custom-fit solutions based on the specific needs of a firm. To speak with one of our representatives or to book a customized demonstration call 1-800-330-3772 or visit www.IBISWorld.com today.
 
*First-time subscribers only. Cannot be applied to existing IBISWorld subscriptions

Avention Training Dates 



Avention, formerly OneSource, is committed to your continued business success. They offer FREE web-based customer training delivered by qualified product experts to provide you with the knowledge and skills to get the most business value from your investment.
 
Designed by learning paths to highlight critical product functionality, these courses enable you to optimize the functionality of this powerful tool.
 
The next Avention web-based training courses are scheduled for:  
 
 Click here for more information on Avention Training


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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.