business broker Archives

Sun Acquisitions Announces the Sale of a Mobile Document Destruction Firm

January 14, 2021 by Ellen Park

Sun Acquisitions is pleased to announce the successful acquisition of Land Shark Shredding, a mobile document destruction firm based in Kentucky.

Land Shark Shredding was founded in 2007 and operated as a certified Service-Disabled Veteran-Owned Business. They provide mobile on-site recurring document destruction services, one-time purge shredding projects, and media & product destruction. The company services both commercial and federal customers, with over 60% of revenue stemming from Federal Government contracts. The company also operates with extremely low customer concentration.

There are major growth opportunities for the new ownership to continue to grow the business. These opportunities include: implementing online marketing strategies, increasing local commercial business and expanding to other markets, improving route density, and hiring additional sales employees to grow recurring revenue

Sun Acquisitions generated over 60 potential buyers for the business which led to 3 final offers. The team at Sun Acquisitions facilitated a strategic acquisition for the client by creating a carveout deal that separated the business into two components, despite Land Shark Shredding being one legal entity. The business was acquired by two separate strategic buyers.

Matt Brunstrum, Advisor, led the transaction and Joseph Beer, VP of Operations, facilitated the closing coordination for the client. After completing the sale of the company, Matt stated, “Land Shark Shredding was a great company ran by Don Gerard Jr. for over 14 years. We were able to help Don maximize value from the sale of his company by carving out his entity into 2 pieces and finding 2 separate strategic buyers who respectively bought the commercial component and the Federal Government Service-Disabled Veteran Owned Business (SDVOB) component.”

Sun Acquisitions Announces the Sale of a Commercial IT Services Provider

December 16, 2020 by Ellen Park

Sun Acquisitions is pleased to announce the sale of an experienced commercial IT services provider, based in the Greater Chicago Area.

The company, founded 25 years ago, provides a full range of IT services and have implemented recurring revenue streams from a large majority of their client base, which include law firms, accounting firms, and professional service businesses. In addition, they are staffed with experienced and knowledgeable employees with the ability to meet any clients’ IT needs.

There are many opportunities present for the new ownership to continue the growth of this company including: increasing digital marketing efforts, expanding geographically to serve additional markets, and growing the business development team.

This company was sold in record time for the full asking price. Through marketing the business for sale, Sun Acquisitions generated over 100 inquires on the business within just a couple months, which led to multiple final offers. The business was acquired by a company currently in the industry conducting a strategic growth acquisition.

Tony Schiappa was the lead advisor and managed all aspects of this client engagement. After the sale of this business, Tony stated, “We are thrilled to provide our client with a quick and valuable sale, even during the tough times of COVID. The M&A market, despite contrary beliefs, has been incredibly active and we have cultivated a large network of buyers who are interested in acquiring firms in the IT Services Industry.” Tony is the Chief Business Development Officer and Senior Advisor for Sun Acquisitions.

Integration – Communications Plan

November 4, 2020 by Sun Acquisitions

Why do so many post-merger integration plans struggle to be implemented? What can merger experts do to facilitate and streamline integration efforts? To answer this question we have to look at the communication plan.

Did you know that poor communication costs midsize to large corporations on average $62.4 million annually? Communication, as we all know, is at the heart of any business and it should be a top priority in a recently merged entity. A strong communications strategy sets the foundation for clear directives to flow from management and stakeholders to employees and customers. And the lack of such a structured plan will amount to nothing short of chaos.

A good communication plan precedes merger

Communication teams are present from the onset of a merger and acquisition deal. They are as it were the front-liners the moment conversation around business acquisition begins. They are the ones responsible for overseeing, developing, and managing the post-merger integration aspects.

The goal of such a team is to encourage business continuity and foster strong relationships between merged companies. It is the communication team that must filter the right information down to employees, vendors, regulators, and stakeholders. It is their task to keep morale up and ensure turnover is kept to a minimum. Theirs is a job that transcends and cuts across every department and unifies all parties.

To assist them in this overly important task, the communication team designs a plan that dictates their actions at every stage – before the M&A happens, during negotiations, and after the deal is signed.

How to draft an integrated communications plan

What are the steps to take when putting together an effective integration plan? There are five core elements that must be considered. However, because of the complex nature of mergers and acquisitions there is no “one-size-fits-all” approach to structuring these plans. Each communications team can tailor and adjust as they see fit.

1. Identify leading stakeholders

When companies merge there are many people that must be informed. They fall into two major categories: internal and external stakeholders. The way you communicate with each group will be different as each requires a particular tone that addresses their interests.

External stakeholders are generally investors and analysts who must be convinced of the associated benefits of the deal. Customers and vendors are another part of the external lot whose continued loyalty must be carefully courted.

Internally, we are looking at employees from the two businesses. Tensions will undoubtedly high as is common in such high profile transactions. When structuring a strategy around employees, it should include communication for workers unions and any legal documents you may require.

2. Identify hotbed issues and significant milestones

It is imperative that communication teams identify situations that can prove bothersome so adequate preparation can be made ahead of time. These issues may be severance packages, litigation cases from disgruntled employees, and or other third parties.

Concurrently, the major milestones also need to be anticipated so external and internal stakeholders can be informed correctly. Such milestones may include the announcement of new leadership structures and when the official Day 1 will be.

3. Establish governance systems for the communications team

The communications teams must be on top of things at all times. This requires sufficient resources in the form of both human capital and finances. Integration success rests upon good governance structures within the communications team.

More likely than not there will be three distinct roles within such teams: The integration leader, the integration steering committee, and the communications leader. All work together like a well-oiled machine ensuring that the communications plan is executed expertly.

4. Frame your core messages and how you will deliver them

Communications teams must carefully extract the main points to be transmitted to stakeholders from the meetings taking place behind closed doors. These key points or core messages will be the narrative that is pushed and will help keep everyone on the same page.

The message must be unifying, positive and reinforce the value to be had in coming together. It’s not hard to see that the communication plan is really pivotal in getting both internal and external stakeholders to understand what’s happening.

5. Develop open communication channels

Communication involves dialogue. The communication plan must take into consideration the feedback from employees and external parties. An open communication channel between the communications team and these entities is critical as their input can help consolidate and speed up integration. When people feel as though their opinions and values are being heard and addressed they are more likely to co-operate with post-merger integration efforts.

Considerations to factor in when building an integration communication plan

What are some of the things communications teams must be aware of when building their communications plan?

Develop the communication plan early: everyone waits on the communications team for information. Therefore make sure you start working on drafting clear strategies early on.

Leave no one behind: don’t overlook stakeholders no matter how insignificant in the deal they may be.

Promote harmony within the hierarchy: the objective of the communications plan is to unite parties not create division and disunity; watch your tone and language.

Don’t overlook culture: culture is often a neglected element during deal structuring. Be mindful of the different company cultures when delivering messages.

Broadcast clear directives: messages should be clear and concise and not leave people wondering what the message actually was.

Remember you’re talking to human beings: this is particularly important when you have to deliver unpleasant news such as layoffs and retrenchments.

Discuss your communications plan with qualified brokers

Would you like to go over your communications plan with a team of skilled qualified brokers? Sun Acquisitions is one of the leading business brokers in Chicago. Our advisory services include strategy development, divestitures, acquisitions, consultations, and business valuation. To discuss your communications plan don’t hesitate to reach out to us. Contact us to schedule a complimentary and confidential consultation with one of our certified advisors. Let’s discuss your business and review your goals.

Disclaimer: Any information provided in this blog is not intended to replace legal, financial, or taxation advice given by qualified professionals.

Integration – Culture Consideration

October 21, 2020 by Sun Acquisitions

How important exactly is company culture in M&A transactions? Well, according to a study by Isaac Dixon, “Culture Management and Mergers and Acquisitions”, cultural incompatibilities are the root cause of 30% of failed M&A integrations. Despite this research, many executives are dismissive of culture, an outlook that places the responsibility of managing potential culture clashes on operating leaders. Company culture differences have the ability to undermine even carefully crafted mergers and acquisitions. Case in point the $35 billion Omnicom and Publicis merger that fell through in 2014. Given the importance of culture, what measures can CIOs take to address culture integration?

Culture Consideration Tip #1 Appoint corporate culture leaders

The complex nature of mergers and acquisitions necessitates input from a wide range of professionals. There is an obvious need to bring on board experienced culture change leaders. People with the ability to unite distinct corporate cultures. Experts who will not allow culture clashes to get in the way of realizing economies of scale or erode the value of the transaction. These leaders will be instrumental in charting a new hierarchy and structuring the new organization model.

Culture Consideration Tip #2 Embed culture integration into meetings

Culture integration must begin at the top. Senior executives must make the first efforts to display a united front so employees can follow suit. Corporate culture leaders must identify culture owners from the merged entities who will take ownership of promoting culture at inhouse meetings. These culture owners will ensure that at every scheduled meeting there is a moment given to the presentation of the new culture. These presentations should be well-structured and specific and not vague assertions of the need for collaboration and teamwork.

Culture Consideration Tip #3 Compromise: find the middle ground

Integration should not mean the annihilation of the culture of the acquired entity, even in a takeover. The cultural strengths of the merged companies should first and foremost be recognized then draw lessons from each company culture. Find the middle ground of how cultural strengths may be integrated and expressed.

Examples of companies that managed to get this right and turn their transactions into successful mergers and acquisitions include Google and Android, H.J. Heinz and Kraft Food, AT&T and BellSouth, Verizon and Vodafone, Disney and Pixar with Marvel, and Travelers Group and Citicorp.

Culture Consideration Tip #4 Select key decision-makers

The ability of a recently merged entity to respond quickly and make decisions is often hampered by associated styles or cultures of decision making. Even prior to the merger, the way decisions are made can be telling signs. Take the aforementioned Omnicom and Publicis deal that never saw the light of day.

Omnicom CEO John Wren said at the time, “There are strong corporate cultures in both companies that delayed us reaching an agreement.” This was an understatement because those delays caused a loss in revenue exceeding $1.5 billion.

By selecting key decision-makers who represent the interests of both companies, decisions can be made faster. One can avoid the bureaucratic mill which almost always slows down decision making.

Culture Consideration Tip #5 Be mindful of succession planning

One of the biggest mistakes often made during M&A transactions is paying little attention to employees. This plays a major role in the high turnovers that are characteristic of such transactions. If you wish to retain top talent, accord them the respect they deserve. Remember, how you treat them during this transition will affect their loyalty going forward.

If you’re keen to better understand why employees leave, assistant teaching professor at PennState Smeal College of Business, Jeffrey A. Krug can help. He makes an effort to explain this mass exodus in his Harvard Business Review article, “Why Do They Keep Leaving?”

He argues that while the majority of original executives do leave voluntarily within a few months, a third of them are forced out and another third opt to leave because their job status has been reduced. The departure is not restricted to executives only with even new hires departing in droves. What could possibly be the cause? Krug cites the underlying problem as the failure to respect and retain incumbent leaders which indirectly leads to demoralization among the already nervous workforce.

Culture Consideration Tip #6 Adopt an open-door policy

During a merger and acquisition, the best thing you can do for your employees is for team leaders to keep an open door policy. When information trickles down as gossip instead of direct conversations between leaders and employees there can be a lot of misunderstanding. In an already tense situation, keeping employees in the dark might not be the best move.

Engage your people during the process. Ask their input on how best to create synergy. When you keep lines of communication open, people feel part of the process. They will still be nervous but it will afford them an opportunity to be heard and to ask the tough questions they might have. Purposeful dialogue may help alleviate anxieties across the board.

Culture Consideration Tip #7 Develop resources for easy reference

When organizations merge, structures will be rearranged and hierarchies affected. The old way of doing business is gone. Some of the culture clashes that present themselves at the onset involve employees continuing in their pre-merger practices. It is not enough to simply ask them to change. Documents must be prepared ahead of time that outline unique roles and responsibilities to avoid conflict.

Schedule a free and confidential consultation with Sun Acquisitions

Are you anxious about the post-merger situation? Would you like to discuss how to handle potential culture clashes? Sun Acquisitions is Chicago’s leading business broker offering a host of advisory services to both sellers and buyers. Contact us to schedule a complimentary and confidential consultation with one of our certified advisors. Let’s discuss your business and review your goals.

How to Navigate a Buyer or Seller’s Initial Meeting

September 23, 2020 by Sun Acquisitions

First impressions count. Whether you’re a prospective buyer or a hopeful seller, the initial meeting is very important as it will set the tone of your negotiations. As experienced business brokers, we place great value on preparing our clients on knowing how to successfully navigate their way in this introductory encounter. We coach them on expression and conduct as well as optimism and the best way to present their proposal whether they are the seller or the buyer. Mergers and acquisitions can be complex. However, there is an etiquette that can help smooth out the process. Let’s take a look at things you can do before, during, and after the initial meeting.

What to do before the introductory meeting

“We should remember that good fortune often happens when opportunity meets with preparation,” says the great businessman and inventor Thomas A. Edison. And indeed, thorough preparation done prior to the initial meeting will lay a foundation upon which successful negotiations can be held. The first port of call is to choose a reputable business broker.

1. How to choose a business broker

Because of their inherently compound nature, mergers and acquisitions typically involve a host of professionals including business brokers. What criteria should you use to select such a team? We recommend you look for experience, an excellent reputation, trustworthiness, and a good M&A track record.

2. Prepare your company papers

Your business brokers will offer advisory services encompassing the legal preparation that you must do. You’ll be instructed on auditing your finances, business valuation, and documents that must be ready to present buyers during the due diligence process.

3. Get yourself emotionally ready

Selling a business or acquiring a business is no walk in the park. You need to be emotionally ready. Studies liken the sentiments felt by sellers when their business is bought to the loss of a child. Grief may accompany the sale. This is why it is imperative to have an M&A firm that can broker deals impartially on your behalf. In addition, they’ll teach you what to say and not say during the meeting.

4. Prepare answers ahead of time

Your advisory team will give you a set of questions to anticipate so you can adequately prepare how you will answer them. If you’re keen to see what sort of questions may be posed by buyers, you’ll be happy to read through this series of questions compiled by the New York Association of Business Brokers.

What to do during the initial meeting

Preparation will put you at ease and help you to discuss the business at length and answer questions in a poised manner. A neutral setting should be chosen for this initial meeting. Ideally, a business lunch would be preferable. This informal setting gives you the chance to relax as you get to know each other. What do you talk about during the meeting?

1. Find common ground first

As you get to know the buyer or seller, ask probing questions that will shed light on why they are selling or why they wish to buy. Knowing their hopes, goals, and objectives can assist you in tailoring your own pitch. After finding common ground, work from this place to establish mutual value and growth opportunities.

2. Tour the business together

After your lunch date, you may wish to give a tour of the facility or offices. However, this should all be done as surreptitiously as possible so as to not alarm employees. The last thing you wish to do is have staff leaving just as you are about to sell the business.

3. Don’t be afraid to ask questions

Whether you’re the buyer or seller, ask as many questions as you can. It’s key to mention here that sometimes comments may be made that can seem offensive. Don’t take them personally. Don’t get emotional. Try to answer objectively. If you don’t know the answer, tell the truth, and say you will get back to them with an answer. Lying about something will backfire when the buyer begins due diligence.

What to do after the introductory meeting

After the meeting, the main discussions will be between the brokers. You’ll be consulted from time to time and updated on the development of things.

1. Schedule follow up meetings

Your brokers will do the follow-up meetings, and provide the buyers with any requested documents on your behalf. From this point until a Letter of Intent is signed you just have to be patient.

2. Continue managing the business

Now is not the time to slacken as you wait for the buyers to make a decision. You should begin looking at developing effective succession planning strategies. The future of the business and your employees depends on the steps you take now. If it’s a merger, you’ll want to think about how to effectively manage the culture aspects of the merger.

3. Assist as and where you can

After signing the Letter of Intent, it’s vital that you help the buyer with the necessary paperwork they need to complete their due diligence. The sooner you can provide the papers, the sooner your buyer can make up their mind whether to proceed to draft a Purchase Agreement or not.

Get the help you need from professional brokers

You don’t have to go through a business acquisition or sell a business all by yourself. Teams such as ours are ready to work with you through the transaction. Our advisory services include strategy development, divestitures, acquisitions, consultations, and business valuation. To discuss more ways to navigate around a buyer or seller’s initial meeting don’t hesitate to reach out to us. Contact us for more information.

Disclaimer: Any information provided in this blog is not intended to replace legal, financial, or taxation advice given by qualified professionals.

Blog Posts

Breaking Barriers: Overcoming Challenges in Marketing Your Business for Sale

Closing the Deal: Finalizing the Sale of Your Business

Navigating the M&A Landscape: How to Maximize Return On Your Privately Held Business

Choosing the Right Path: Exploring Acquisition Strategies for Small to Mid-sized Enterprises

From Vision to Reality: The Art of Successful Mergers and Acquisitions for Privately Held Businesses