George & Company Merger & Acquisition (M&A) Intermediaries

Growth through acquisition can be a critical component of an established company and/or entrepreneur’s portfolio expansion. Increasing the size and scope of your organization through M&A can offer benefits such as increased geographic distribution, customers, products, services or technologies and/or personnel.

George & Company has over four decades of brokerage experience in the lower middle market and upper main street transactions that continue to greatly facilitate a successful acquisition strategy. Critical to successful buy-side engagement is the development of a rigorous process to screen, identify and evaluate potential acquisition candidates. We can help you clarify and refine your specific transaction objectives and the criteria to be used to evaluate potential targets, including industry niche, operations, sales volume, profitability, geography, management and more.

A targeted buy-side search process can begin once the acquisition profile is established. George & Company uses a number of databases, industry associations and other sources to identify targets that fit your profile. This process may include many targets that are not currently on the market, but might be interested in a sale if approached properly. You can also include potential targets your company has previously identified.

Using a third-party for the initial contact with these targets can be critical. As most businesses and entrepreneurs are aware, target companies frequently receive calls from investment bankers, business brokers and competitors inquiring about their availability for sale. These “fishing expeditions” usually lead nowhere and make targets skeptical of entertaining a sale process. George & Company serves as your representative to reach the key decision makers at a target and arrange an introductory discussion as to the seriousness of the inquiry.

Your management team is focused on running your business. You are hiring George & Company to do the “legwork“ on much of this buy-side process. Part of our job is to gather pertinent information on target companies so we can evaluate those opportunities against your acquisition profile.

Following this initial screening, we will present suitable candidates to your management team for further evaluation and internal discussion. Our next step will be to request additional diligence information from the resulting target list to further refine the viable candidates. We continue to serve as the intermediary until you reach the point of scheduling a site visit and requesting more detailed diligence.

It is extremely helpful in the buy-side process for selected members of our client’s and a target’s management teams to have a face-to-face meeting, on-site at the target’s business location. George & Company can gather and evaluate written information and financials but a meeting between management teams cannot be outsourced in this process. Occasionally, a prospective target will not meet until an offer is submitted but for M&A deals within the lower middle market, we have been successful in arranging an introductory meeting between the parties at this stage of the buy-side process.

In conjunction with a site visit, George & Company develops a valuation model containing historical and projected financial statements, quality of earnings adjustments, working capital requirements and a determination for the fair market value of the business. Based on these results plus cash flow requirements, George & Company will advise you on a transaction structure necessary to prepare a Letter of Intent (LOI) for the target.

George & Company will work with your counsel to draft a customized Letter of Intent (LOI) for submission to the target. The LOI includes certain binding and non-binding terms and outlines the primary components of your intended transaction. Following deliberation between our client and the target, the LOI will be mutually executed between the two parties, providing both parties a level of comfort that the general framework of a deal has been agreed to before significant effort in detailed due diligence is conducted by our client.

The due diligence process includes a legal, financial and strategic review of the target’s documents, such as financial statements/tax returns, contracts, patents etc. Our client’s transaction counsel performs the legal review, its internal/external accountants review the financial information, and its management performs the strategic review. Results of the due diligence investigation will further refine the value of the target’s business and may affect deal terms, financing, reps & warranties, employment agreements, etc. included within the binding purchase agreement between the parties. We work with our client’s deal team throughout the due diligence process.

Prior to closing the transaction, we call upon our understanding of the target’s business, ownership, management and financial situation to help our client’s management team determine the appropriate transaction structure, negotiate deal terms and successfully close the acquisition. We closely review and critique the final legal documents before execution by our client.