Buying, Selling, and Valuing Financial Practices: The FP Transitions M&A Guide, + Website
August 2016 978-1-119-20737-5 Hardcover (320 pages)
David Grau, Sr.
John Wiley & Sons, Inc.
Buying, Selling, & Valuing Financial Practices shows you how to complete a sale or acquisition of a financial advisory practice and have both the buyer and seller walk away with the best possible terms. From the first pages of this unique book, buyers and sellers and merger partners will find detailed information that separately addresses each of their needs, issues and concerns.
From bestselling author and industry influencer David Grau Sr. JD, this masterful guide takes you from the important basics of valuation to the finer points of deal structuring, due diligence, and legal matters, with a depth of coverage and strategic guidance that puts you in another league when you enter the M&A space. Complete with valuable tools, worksheets, and checklists on a companion website, no other resource enables you to:
- Master the concepts of value and valuation and take this issue “off the table” early in the negotiation process
- Utilize advanced deal structuring techniques including seller and bank financing strategies
- Understand how to acquire a book, practice or business based on how it was built, and what it is capable of delivering in the years to come
- Navigate the complexities of this highly-regulated profession to achieve consistently great results whether buying, selling, or merging
Buying, Selling, & Valuing Financial Practices will ensure that you manage your M&A transaction properly and professionally, aided with the most powerful set of tools available anywhere in the industry, all designed to create a transaction where everyone wins—buyer, seller, and clients.
Avoiding the Critical Mistakes
Valuation: The Great Debate
Assessing What You Have Built (or Are Acquiring)
Who Is Selling? Transition Strategies by Ownership Level
Overcoming Attrition: Public Enemy No. 1
What Is Being Sold?
Organizing the Marketplace
Exit Plans versus Succession Plans versus Continuity Plans
The Planning Continuum
Chapter 2 Value and Valuation Fundamentals
An Overview
What Creates Value?
Standards of Value
Valuation Approaches and Methods
The Rule of Thumb Method of Valuation
Application of Standards and Approaches
Making Sense of It All
Who Is Qualified? (to Offer an Opinion of Value)
Valuations for Bank Financing
Chapter 3 Solving Valuation
The Blue Book Standard
Lessons Learned
A Value Calculation
How It Works
Recurring versus Nonrecurring Revenue
Assessing Transition Risk
Measuring Cash Flow Quality
Fixing the Fracture Lines
The Profitability Issue
Chapter 4 Building and Preserving Value toward the End of Your Career
1. Get a Position Fix
2. Focus on the “M” in M&A
3. Obtain a Formal, Third-Party Valuation
4. Understand the Impact of Terms and Taxes on Value
5. Consider Alternative Strategies: Sell and Stay Opportunities
6. Study Reliable Benchmarking Data
7. Create a Plan and a Definitive Timeline
8. Have a Backup Plan
9. Sell on the Way Up!
10. Focus on You
Chapter 5 Preparing to Sell
What’s Your Plan?
Finding the Very Best Match
When to Sell: Timing That Final Step
In a Nutshell: How to Sell Your Book, Practice, or Business
The Listing Process
Making a Quick Decision to Sell
When Selling Isn’t Selling
Ten Things Buyers Will Want to Know
Handling Key Employees during the Selling/Listing Process
Letting Go
Chapter 6 The Buyer’s Perspective
A New Direction
If at First You Don’t Succeed
Build a Base for Acquisition
What Sellers Will Want to Know
Understanding the Audition Process
Are You a Buyer or a Prospect?
Nontraditional Acquisition Strategies
Chapter 7 Deal Structuring: Payment Terms, Taxes, and Financing
Seller Financing
The Shared-Risk/Shared-Reward Concept
Performance-Based Promissory Notes
Earn-Out Arrangements
Revenue Sharing or Fee Splitting Arrangements
Earnest-Money Deposits
Down Payments
Basic Tax Strategies
Installment Sales
Asset-Based Sales/Acquisitions
Stock-Based Sales/Acquisitions
Bank Financing
The Mechanics of the Process
Blending Seller and Bank Financing Together
Acceleration Options
Working Capital Loans
Chapter 8 Due Diligence and Documentation
Conducting Due Diligence
Assembling and Managing Your Team
Advocacy versus Nonadvocacy Approach
Documenting the Transaction
Chapter 9 Key Legal Issues in the M&A Process
What Exactly Is “Boilerplate”?
Reps and Warranties
Covenants and Conditions
Indemnification and Hold Harmless Clauses
Protections against Death or Disability
Default Provisions
Resolution of Conflicts
Basic (but Not Trivial) Legal Issues
Chapter 10 The Transition Plan
Regulatory Issues
Transferring Fee-Based Accounts
Setting Up for the Post-Closing Transition
E&O Insurance (Tail Coverage)
Sample Client Letters
Conclusion
Appendix: Sample Documents
About the Author
About the Website
Index
