February 28, 2024

Quality of Earnings Report: The Secret Weapon Buyers Won’t Tell Owners About

Quality of Earnings Report: The Secret Weapon Buyers Won’t Tell Owners About

Are you planning to sell your company in the next year or two? 

If so, think about commissioning your own Quality of Earnings report — BEFORE you go to market. Why? Because your buyer will commission one. And it could mean you’ll be leaving money on the table.

A QOE is the business valuation standard prospective buyers use to determine a final purchase price for target companies. If you haven’t commissioned your own, you’ll by necessity be relying on the one your acquirer commissions.

As InterimExecs CEO Robert Jordan said in a recent webinar (scroll down to watch the 8-minute video), consider a middle market business owner who has signed a letter of intent agreeing to sell the company to a private equity fund for 10 times earnings. He believes EBITDA to be $10 million and expects to close for $100 million.

Then the acquirer commissions a QOE to ensure this is a solid investment decision. The report comes back with an adjusted EBITDA of $9.5 million. BAM! The closing price just dropped by $5 million.

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January 26, 2024

Case Study: AHIMA-HCPro Acquisition and the Crucial Role Played by a Team of Interim Executives

Case Study: AHIMA-HCPro Acquisition and the Crucial Role Played by a Team of Interim Executives

AHIMA, a nonprofit whose mission is to ensure that health information is accurate, complete, and available to patients and providers, had a big idea: To expand by buying a for-profit business.

The acquisition target, HCPro, was an industry leader in integrated information, education, training, and consulting products and services in healthcare compliance and revenue cycle management.

The combination, AHIMA CEO Amy Mosser believed, would broaden the reach of both organizations.

But, first came the challenge of the acquisition process – performing due diligence, planning for the integration, and setting a course for the future.

To do that, she needed help in three key areas: financial due diligence, workforce integration planning, and content licensing.

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March 21, 2022

Business Exit Strategy: Owners Neglect at Their Peril

Business Exit Strategy: Owners Neglect at Their Peril

InterimExecs founder Robert Jordan learned early the tremendous weight an entrepreneur must bear: “When you own the company, it’s nothing like being an employee,” he writes in exploring the sacred trust of ownership. “You might as well compare lifting up a hundred pound weight versus a feather.”

Jordan, who founded his first small business at age 26 and “hit every speed bump you could possibly think of, and then a couple more just for creativity points,” has learned a lot along the way. Among the most important lessons: while business exit planning is critical, it is usually neglected – at the owner’s and board’s peril.

Alejandro Cremades, author of Selling Your Startup: Crafting the Perfect Exit, Selling Your Business, and Everything Else Entrepreneurs Need to Know, agrees. He says that a company’s management team must add “crafting an exit strategy” to their business goals.

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April 25, 2019

Remove the Monopolies and Step Toward Innovation

Remove the Monopolies and Step Toward Innovation

The great thing about playing the board game Monopoly as a kid was that you could buy up everything, collect rents all over the place (or get slaughtered if say your older sister was just a better player) but when the game ended, it was over.

We’re now living a real life monopoly game that’s crept up on even the strongest free markets.

In 2017, 75% of the beer market was cornered by three monopoly companies and one, Anheuser-Busch, held more than 40% alone. In the online search industry, one company monopolized the market and held 91% of market share and 98% of the cell phone market is concentrated among the four largest companies, with 70% being split between Verizon and AT&T alone. Even seemingly trivial things like peanut butter, coffins, and adult websites are all controlled by only a couple of firms.

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June 5, 2017
Robert Jordan

What Does “Strategy” Really Mean? Move Over Behemoths, The Little Guys Are Coming for You

Robert Jordan | CEO, InterimExecs

After a call with a “strategy” director (I hate quotes, but let me do this just once) at a multibillion dollar public company, I couldn’t help but thank Forrest Gump for popularizing the proverb:

Stupid is as stupid does

This company is in a sleepy industry and to continue to grow they must find new ways to innovate. Our conversation circled around a request to help in what would be a major, breathtaking pivot into a completely new sector. To succeed, the company would need more leadership and more firepower than organic growth would provide, meaning they were looking to acquisitions. And we had the perfect target – a fit so good as to be called an epiphany.

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January 5, 2016
Daniel Fuhrman

Why M&A Integration is Hard … and What to Do About It

Daniel Fuhrman | Interim CEO, CFO, Turnaround

Everyone has read studies proclaiming the majority of acquisitions fail to create shareholder value.  Yet we are witnessing a roaring M&A market with very frothy valuations and no lack of buyers willing to venture into the game.  Great for sellers.  Timing is everything – private equity groups are finding rich exits to vintage deals entered into prior to the great recession that for years looked like they would be losers.  These favorable returns are giving private equity investors even more reason to bring fresh capital to the table.  Meanwhile, strategic buyers, armed with high valuations on their publicly traded shares and plenty of cash on hand have the wherewithal to bid aggressively, further driving up prices.

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