The ExitMap® Case Profiles
From Our Exit Planning Engagements
Every company, every owner, and every engagement is unique. When we are hired, our fiduciary responsibility to our client requires that we are honest about what is possible, realistic about the outcome, and committed to designing a strategy that works.
Professional Services Firm:
(Partners differed in strategic objectives)
This six-partner firm had dramatic internal differences in objectives. The retiring partners wanted to advance several employees to fill new partner positions, while the remaining partners did not. Several rounds of surveys and facilitated discussions, along with individual coaching/ consulting with key partners, led to a unanimous decision to present the firm as a candidate for merger, which was then successfully executed.
Oil Field Services Company:
(Single owner selling to a single employee)
The owner of this company wanted to plan for an exit approximately 7 years in the future. He had 3 caveats: that he would never be an employee for someone else, that he leave with all or substantially all of his equity, and that he realize the increasing value of the company’s growth during that time. Working with a key employee, we helped to restructure the legal entity, and arranged a tax-advantaged distribution and transition plan that achieved all three objectives, while allowing the employee a very attractive opportunity without incurring debt.
(Employee sale becomes third-party sale)
This owner was very enthusiastic about selling his business to key employees. We assessed his team, and identified a void in key skill sets. Filling that void would have reduced the company’s cash flow to a point where employee financing was no longer feasible. With the agreement of the employees, we assisted the owner in identifying and contracting with a national broker who specializes in mergers and acquisitions in that specific industry.
Mid-Market Professional Firm:
(Third-party sale becomes employee sale)
In this company, several founders were ready to retire, while others wished to remain active for several more years. The company had a substantial market value, leading to the assumption that a sale to a much larger entity was the only feasible exit plan. When apprised of the potential listing of the company, a group of managers asked for and received permission to investigate their alternatives. This resulted in arranging outside financing, secured by the managers, to transition the retiring partners’ equity without placing the entire business on the market.
Many clients alter their plan after a realistic assessment of its challenges or opportunities. An advisor’s role is to present alternatives, and help the client select one that will best accomplish his or her objectives.
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