Details

Buying, Selling, and Valuing Financial Practices


Buying, Selling, and Valuing Financial Practices

The FP Transitions M&A Guide
Wiley Finance 1. Aufl.

von: David Grau

40,99 €

Verlag: Wiley
Format: EPUB
Veröffentl.: 15.08.2016
ISBN/EAN: 9781119207382
Sprache: englisch
Anzahl Seiten: 320

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Beschreibungen

<p><b>The Authoritative M&A Guide for Financial Advisors</b></p> <p><i>Buying, Selling, & Valuing Financial Practices </i>shows you how to complete a sale or acquisition of a financial advisory practice and have both the buyer and seller walk away with the best possible terms. From the first pages of this unique book, buyers and sellers and merger partners will find detailed information that separately addresses each of their needs, issues and concerns.</p> <p>From bestselling author and industry influencer David Grau Sr. JD, this masterful guide takes you from the important basics of valuation to the finer points of deal structuring, due diligence, and legal matters, with a depth of coverage and strategic guidance that puts you in another league when you enter the M&A space. Complete with valuable tools, worksheets, and checklists on a companion website, no other resource enables you to:</p> <ul> <li>Master the concepts of value and valuation and take this issue “off the table” early in the negotiation process</li> <li>Utilize advanced deal structuring techniques including seller and bank financing strategies</li> <li>Understand how to acquire a book, practice or business based on how it was built, and what it is capable of delivering in the years to come</li> <li>Navigate the complexities of this highly-regulated profession to achieve consistently great results whether buying, selling, or merging</li> </ul> <p><i>Buying, Selling, & Valuing Financial Practices </i>will ensure that you manage your M&A transaction properly and professionally, aided with the most powerful set of tools available anywhere in the industry, all designed to create a transaction where everyone wins—buyer, seller, and clients.</p>
<p>Foreword xi</p> <p><b>Preface xv</b></p> <p>For Sellers xv</p> <p>For Buyers xvi</p> <p>Acknowledgments xix</p> <p><b>Chapter 1 The Basics You Need to Know 1</b></p> <p>Avoiding the Critical Mistakes 1</p> <p>Valuation: The Great Debate 4</p> <p>Assessing What You Have Built (or Are Acquiring) 6</p> <p>Who is Selling? Transition Strategies by Ownership Level 11</p> <p>Overcoming Attrition: Public Enemy No. 1 14</p> <p>What is Being Sold? 17</p> <p>Organizing the Marketplace 20</p> <p>Exit Plans versus Succession Plans versus Continuity Plans 23</p> <p>The Planning Continuum 28</p> <p><b>Chapter 2 Value and Valuation Fundamentals 31</b></p> <p>An Overview 31</p> <p>What Creates Value? 33</p> <p>Standards of Value 35</p> <p>Valuation Approaches and Methods 38</p> <p>The Rule of Thumb Method of Valuation 46</p> <p>Application of Standards and Approaches 48</p> <p>Making Sense of It All 51</p> <p>Who is Qualified? (to Offer an Opinion of Value) 53</p> <p>Valuations for Bank Financing 54</p> <p><b>Chapter 3 Solving Valuation 57</b></p> <p>The <i>Blue Book </i>Standard 57</p> <p>Lessons Learned 58</p> <p>A Value Calculation 60</p> <p>How It Works 61</p> <p>Recurring versus Nonrecurring Revenue 65</p> <p>Assessing Transition Risk 66</p> <p>Measuring Cash Flow Quality 68</p> <p>Fixing the Fracture Lines 69</p> <p>The Profitability Issue 71</p> <p><b>Chapter 4 Building and Preserving Value toward the End of Your Career 75</b></p> <p>1. Get a Position Fix 77</p> <p>2. Focus on the “M” in M&A 78</p> <p>3. Obtain a Formal, Third-Party Valuation 79</p> <p>4. Understand the Impact of Terms and Taxes on Value 80</p> <p>5. Consider Alternative Strategies: Sell and Stay Opportunities 81</p> <p>6. Study <i>Reliable </i>Benchmarking Data 84</p> <p>7. Create a Plan and a Definitive Timeline 85</p> <p>8. Have a Backup Plan 86</p> <p>9. Sell on the Way Up! 87</p> <p>10. Focus on You 88</p> <p><b>Chapter 5 Preparing to Sell 91</b></p> <p>What’s Your Plan? 92</p> <p>Finding the Very Best Match 95</p> <p>When to Sell: Timing That Final Step 98</p> <p>In a Nutshell: How to Sell Your Book, Practice, or Business 101</p> <p>The Listing Process 107</p> <p>Making a Quick Decision to Sell 112</p> <p>When Selling Isn’t Selling 113</p> <p>Ten Things Buyers Will Want to Know 115</p> <p>Handling Key Employees during the Selling/Listing Process 116</p> <p>Letting Go 118</p> <p><b>Chapter 6 The Buyer’s Perspective 119</b></p> <p>A New Direction 119</p> <p>If at First You Don’t Succeed . . . 121</p> <p>Build a Base for Acquisition 122</p> <p>What Sellers Will Want to Know 124</p> <p>Understanding the Audition Process 126</p> <p>Are You a Buyer or a Prospect? 133</p> <p>Nontraditional Acquisition Strategies 134</p> <p><b>Chapter 7 Deal Structuring: Payment Terms, Taxes, and Financing 143</b></p> <p>Seller Financing 144</p> <p>The Shared-Risk/Shared-Reward Concept 145</p> <p>Performance-Based Promissory Notes 147</p> <p>Earn-Out Arrangements 148</p> <p>Revenue Sharing or Fee Splitting Arrangements 151</p> <p>Earnest-Money Deposits 152</p> <p>Down Payments 153</p> <p>Basic Tax Strategies 154</p> <p>Installment Sales 156</p> <p>Asset-Based Sales/Acquisitions 157</p> <p>Stock-Based Sales/Acquisitions 161</p> <p>Bank Financing 164</p> <p>The Mechanics of the Process 166</p> <p>Blending Seller and Bank Financing Together 169</p> <p>Acceleration Options 170</p> <p>Working Capital Loans 171</p> <p><b>Chapter 8 Due Diligence and Documentation 175</b></p> <p>Conducting Due Diligence 176</p> <p>Assembling and Managing Your Team 181</p> <p>Advocacy versus Nonadvocacy Approach 183</p> <p>Documenting the Transaction 184</p> <p><b>Chapter 9 Key Legal Issues in the M&A Process 197</b></p> <p>What Exactly is “Boilerplate”? 198</p> <p>Reps and Warranties 199</p> <p>Covenants and Conditions 202</p> <p>Indemnification and Hold Harmless Clauses 207</p> <p>Protections against Death or Disability 209</p> <p>Default Provisions 210</p> <p>Resolution of Conflicts 213</p> <p>Basic (but Not Trivial) Legal Issues 215</p> <p><b>Chapter 10 The Transition Plan 223</b></p> <p>Regulatory Issues 224</p> <p>Transferring Fee-Based Accounts 232</p> <p>Setting Up for the Post-Closing Transition 233</p> <p>E&O Insurance (Tail Coverage) 235</p> <p>Sample Client Letters 236</p> <p>Conclusion 247</p> <p>Appendix: Sample Documents 249</p> <p>About the Author 279</p> <p>About the Website 281</p> <p>Index 283</p>
<p><b>DAVID GRAU SR., JD,</b> is the founder and president of FP Transitions, the preeminent consulting firm known as much for building sustainable businesses as selling or merging them at the end of a career. FP Transitions has valued over 8,000 financial services or advisory practices and businesses, and consulted on over 1,500 completed third-party transactions. Grau Sr. previously authored the bestselling <i>Succession Planning for Financial Advisors: Building an Enduring Business,</i> also published by Wiley. He has written 90 nationally published articles, white papers, and manuals on complex succession strategies, equity management, business continuity, income-perpetuation plans, and mergers and acquisitions. Grau Sr. was named one of the most influential people in the profession in an industry survey by <i>Financial Planning</i> magazine and is a nationally recognized expert on succession planning and business-perpetuation strategies in the financial services industry.
<p>The purpose of this book is to help advisors understand how to sell what they've built to someone else for maximum value and at optimum tax rates. It is also written to help those on the other end of the deal, so that buyers may understand how to successfully complete an acquisition on the best possible terms, with minimum risk, while writing off the entire purchase price over time. These are not disparate goals; they are connected in every way and part of a win-win-win strategy that aligns the interests of the buyers, the sellers, and the clients who serve as judge and jury over the entire M&A process. This triple bottom line should be the ultimate goal of every transaction—for the good of this industry, its business owners, and the investing public. <p>As a seller, you only have one chance to sell a practice you have spent a lifetime building. As a buyer, you're competing with numerous candidates, many with experience and greater resources. To succeed, you need to know more than the other side, and you need an experienced guide. <i>Buying, Selling & Valuing Financial Practices</i> is <i>the</i> complete guidebook for executing your transaction. <p>Written for sellers and buyers alike, this explicit and detailed road map from a pioneer in the financial advisory profession takes you through the entire process and fully prepares you to maximize your opportunities and avoid costly mistakes.

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