General FAQs

As my advisor, what is your biggest value add?

2020-08-26T11:47:08+00:00

We are your ally throughout and help you manage the entire sales process. We advise you when things are progressing accordingly or when they are not. We are able to see common pitfalls before they arise and utilize specific strategies to negotiate the best offer possible. You would never go to court without an attorney, [...]

As my advisor, what is your biggest value add?2020-08-26T11:47:08+00:00

What is the Lower Middle Market?

2020-08-26T11:46:39+00:00

The lower middle market is the lower end of the economy’s middle market with a key distinguisher being companies that generate revenues between $1 million to $80 million. It is counter intuitive, but smaller transactions on this spectrum tend to be more complicated. Our expertise is working with companies that fall within this range. It [...]

What is the Lower Middle Market?2020-08-26T11:46:39+00:00

How many agreements / contracts are involved in the transaction?

2020-08-26T11:46:13+00:00

Depending on the commercial terms of the deal there may be as many as 3 separate contracts. There is always a PSA. If the seller is rolling over equity then there will be an operating agreement. If the seller is remaining in an advisory or management capacity then there will be an employment agreement. Keep [...]

How many agreements / contracts are involved in the transaction?2020-08-26T11:46:13+00:00

Definitive Agreement – Purchase and Sale Agreement (PSA)?

2020-08-26T11:45:52+00:00

The PSA is the definitive document, with detail on all aspects of the transaction.  This document is where the attorneys will do most of their work.  It will save time if the most sensitive provisions are negotiated ahead of this phase.  For instance: non-compete, representations and warranties, indemnification cap, just to name a few.   

Definitive Agreement – Purchase and Sale Agreement (PSA)?2020-08-26T11:45:52+00:00

How Rollover Equity is Treated

2020-08-26T11:44:58+00:00

If the seller is part of the future senior management, or would like to invest in the buyer/new company they can choose to Rollover Equity. This is a portion of the purchase price. Keep in mind that this will represent a higher portion of equity, because the buyer is also using debt to finance the [...]

How Rollover Equity is Treated2020-08-26T11:44:58+00:00

What are Non-Compliance Disclosures?

2020-08-26T11:44:32+00:00

In the healthcare industry it is impossible to remain in compliance with all regulation or contractual obligations. It is important to identify non-compliance early in the process and disclose to buyer. Usually this is first done in a conference call. It can also be detailed in within the Rep and Warranties of the LOI. Ultimately, [...]

What are Non-Compliance Disclosures?2020-08-26T11:44:32+00:00

Material Adverse Effects (MAEs)

2020-08-26T11:44:06+00:00

If a buyer walks away from a deal it is usually due to something that is potentially, yet materially, harmful to the business. If a buyer litigates, citing a provision in the Purchase Agreement, there will have to be damages faced by the company to justify the litigation. For example, suing based on an ordinary [...]

Material Adverse Effects (MAEs)2020-08-26T11:44:06+00:00

What are Reps and Warranties or Special Indemnities?

2020-08-26T11:43:34+00:00

All Purchase Agreements have Representations and Warranties put forth by seller. If there is a breach the buyer will have certain financial remedies. There are Fundamental Reps and Warranties, like anything that is considered fraud. In this case, the buyer may be entitled to the entire purchase price to be reimbursed. This is highly unlikely. [...]

What are Reps and Warranties or Special Indemnities?2020-08-26T11:43:34+00:00

What other assistance will I have to retain during the process (attorney)?

2020-08-26T11:42:59+00:00

In all cases, an attorney is required to solidify the purchase agreement, which is the binding document to closing the deal. In some cases, a financial consultant may be required to properly present your company’s financials. It is vital that you select the proper representatives in these categories. We can assist in this selection. It [...]

What other assistance will I have to retain during the process (attorney)?2020-08-26T11:42:59+00:00

What other assistance will I have to retain during the process (attorney)?

2020-08-26T11:42:21+00:00

In all cases, an attorney is required to solidify the purchase agreement, which is the binding document to closing the deal. In some cases, a financial consultant may be required to properly present your company’s financials. It is vital that you select the proper representatives in these categories. We can assist in this selection. It [...]

What other assistance will I have to retain during the process (attorney)?2020-08-26T11:42:21+00:00
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