An Intermediary’s Opinion of Value (IOV) performed by Business Transition Strategies is a comprehensive report targeting the market value range of your business. We recommend that an IOV be performed every one to three years, depending on how soon the business will be prepared for market. The initial projected value is the single most important determining factor for an orderly and timely transition.
The IOV measures businesses against completed transactions in the specific industry in which you operate. The four most important metrics that are considered are: Gross Sales, Gross Profit, Earnings before Interest, Taxes, Depreciation, Amortization (EBITDA) and Discretionary Earnings. The importance and weight given to each metric varies depending on the industry, and can also vary depending on the type of acquirer. Various other methods such as comparisons to public companies, discounted cash flow and asset-based valuations will sometimes be used as a verification or double check.
There is a lot of information in the public domain that can mislead about true market potential. It is not uncommon for exceptional, one-of-a-kind value ranges to be repeated as though these results will play out in all situations. The IOV uses a consistent process, based on data sources, to provide a clear and realistic value range.
The IOV can also help an owner highlight potential areas of improvement, based on comparisons with other industry peers or with similar industries. After an in-depth review of the financials the Intermediary may also suggest areas where the financial presentation can be adjusted to clarify and define expenses. The process helps make the true financial performance easier to understand for an acquirer, as well as facilitate the due diligence process, so is generally part of our transaction process as well.
"The entire process went smoothly and professionally. The BTS team kept me fully informed at every step. They worked hard and were effective in bringing the deal home."
"Skip and I continue to be grateful for all you have done to make the sale of Pure Flow come to fruition."
"BTS’s level of expertise in the process and close attention to detail enabled us to successfully navigate the deal."
"These types of transactions are often long and complicated and I doubt it could have been successfully completed without your close ongoing involvement."
"The outside objective point of view that you have brought us has been invaluable as we prepare for the rapid growth."
"John then found the right buyer and coordinated a seamless transition—he doesn’t miss a single detail."
"John immediately identified our strengths and experiences and discussed a business that ultimately was more in line with our goals."
"The BTS team came in, evaluated everything in a professional and thankfully non-threatening manner."
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Precision Machining Company
Initially, liquidation was a serious consideration. It would offer a quick exit but would hurt loyal employees and disrupt the customers who had come to rely on its quality production.
Green Product Company
Our client owners could dig in for the long haul…However, this would take five years or more. Owners simply lacked the horsepower to do it.
Water Purification Company and Young Buyers
Owners decided they wanted to retire. They also wanted to be fair to the staff who had been loyal to them. Could the company be sold, the staff retained and the facility remain in use?
Magnetics Company with High Profile Customers
(T)he manufacturer would need to focus on growing EBITDA to capture interest from major strategic buyers and achieve a higher multiple of earnings.