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Many of you are currently wrestling with the following questions: What do I do about my loyal management team or my children who are working in the business, they don’t have enough capital to buy it from me? I’d like to diversify my wealth, which is largely locked up in my company, but I don’t want to sell my business now, what can I do? What most of you probably don’t realize is, there is a way for you to sell your business and still participate in future growth…. Or sell your business to your management team even if they do not have the necessary capital to do the deal on their own. (more…)

Our research department conducts a fair amount of survey research in the industries that we cover. Over the years, we have been asked by quite a few clients to suggest some reference materials to assist them in designing and conducting surveys. While our research department utilizes the skills of a statistician to design and oversee the execution of our surveys, with a little research and the help of the following books, just about anyone can put together a statical sound survey. (more…)

Click here to download The HomeTeam Deal: A Closer Look at the Numbers

We have received a lot of calls and emails over the last few days regarding Rollins’ acquisition of HomeTeam Pest Defense, including, do “Do you have a copy of the purchase agreement?” I’ve included in this week’s report the most commonly asked questions and answers.
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Last month our business valuation department was engaged by a pest control client, Kevin, owner of XYZ Pest Control, to advise him on setting up a stock gifting program. His goals are to gift stock annually to his children over the next 10 years or so, taking advantage of the Federal Annual Gift Tax exemption as a vehicle for saving for their college education. When we reviewed the financial and operational documents on XYZ, we realized that Kevin had made a few acquisitions over the last few years. XYZ’s most recent was the acquisition of a competitor - the purchase of the assets of an S corporation for $1,050,000. Upon digging into the numbers a little deeper, we realized something quite peculiarly, though not particularly surprising. The buyer and seller had allocated a very large portion of the purchase price, $480,000 to be exact, to a non-competition agreement. In this article, you are going to learn why this alarmed us and what you can do to avoid tax mistakes while doing deals.
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