Wednesday 31 January 2018

M & A Advisor vs. Investment Banker vs. Business Broker: What’s the Difference?


M&A Advisors

M&A advisors and investment bankers are similar in their offerings, though there are certainly some differences. M&A advisors bridge the transaction market gap between the smaller businesses that are sold by business brokers. The larger transactions typically take on a more complex structure and the regulatory bodies require the servicing professionals to carry certain licenses. However, depending on the transaction structure, some lower middle market transactions do not require the advisor to be licensed under the securities laws. You will find that most M&A advisors are not licensed. This is very much a grey area and subject interpretation of certain foggy facts that will hopefully be addressed by the SEC and Congress in the months to come. If not carefully navigated this can create additional transaction risk to both the advisor and the transacting parties.


Investment Bankers

Investment bankers typically offer a broader range of services and work with larger companies; however, in the last 5 to 10 years it is more common to see investment banking firms servicing clients in the middle market. Investment banks provide several services that business brokers do not. Some of these services include: fairness opinions, public offerings, a much broader line of financial services, etc. These require formal licensing as a broker-dealer. Additionally, investment banks are usually staffed with various professionals that provide a wider range of experience, licenses, and other certifications. The depth of experience and wide array in skill set allows the bank to handle more complex transactions and provide these technical services.

Business Brokers

Business brokers typically serve smaller companies that will likely sell to an individual buyer (vs. a corporate or institutional buyer). The types of businesses they usually service are hair salons, franchises, gas stations, dry cleaners, convenience stores, small service businesses, single location restaurants, etc. The professional agreement terms that are used are very similar to selling a house. It is rare that a business broker will charge an upfront fee. However, it is very common that they will require that the preparation of marketing materials and historical and forecasted financials be all done by the business owner. If you are a buyer, you should know that most, if not all, the preparation is done by the seller. This creates a much bigger transaction risk for both the buyer and seller – it is more likely that the books will not be prepared in agreement with GAAP accounting standards and/or it is highly unlikely that they are audited financials. The typical transaction is the sale of the company’s assets using a template or standard legal forms. These forms often omit key sections that minimize post-transaction liabilities.


How Does the Term ‘M&A Advisor’ Compare to The Term ‘Business Broker’?

One of the primary distinctions between the popular use of the term ‘business broker’ compared to the term ‘M&A Advisor’ is the fact that business brokers are often licensed real estate brokers. In my experience, M&A Advisors almost never have real estate brokerage licenses. Many main street transactions include the property on which the business is based. The owners usually want to sell the business and the property together. If an M&A Advisor is involved in a transaction that includes a real estate component, they would usually separately engage a real estate agent to facilitate the real estate portion of the transaction – even if both are being sold to the same buyer

How M&A Advisors and Investment Bankers Are Similar?

Both Investment Bankers and M&A advisors run a proactive process to sell a company that is structured and usually focused on creating a competitive and timed market for the seller with the goal of optimizing the value and reaching the seller’s objectives. As mentioned before, the process a business broker takes is much more passive. The proactively managed process of M&A advisors and investment bankers tend to add a lot more value. Investment bankers and M&A advisors typically buy and sell companies to/for institutional companies, family offices, other mid to large size companies, private equity funds and occasionally the high wealth individual. The transactions at this size and stage of the market tend to be much more complex. The required level of sophistication, deal experience, and understanding in corporate finance is not found at the lower-end of the spectrum. It is often that these professional provide non-transactional value. In many cases, these groups have worked with companies in similar industries or comparable sizes. They have seen common challenges and growth strategies that work. A polished professional may enlighten management with operational changes that could improve the company prior to a sale.


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial AdvisoryPrivate Equity,  Debt Financing and International Business Development. These Services leverages insights,   relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.  
  

http://www.alcormna.com



Tuesday 30 January 2018

Benefits of Debt Financing


Access to capital is one among the most important barriers little businesses face once wanting to implement growth ways. That’s why it’s vital to know each the benefits and downsides of debt finance. A convincing truth in business is that it takes cash to create cash; however, it takes inexpensive cash to last. However, wherever can that cash come back from? There square measure scores of choices. Don’t let the word “debt” scare you. Primarily, debt finance is that the act of raising capital by borrowing cash from a loaner or a bank. Reciprocally for a loan, creditors are then owed interest on the cash borrowed. Debt may be cost-efficient, providing little businesses with the funds to top off on inventory, rent further workers, and buy property or much-needed instrumentation.

Advantages of Debt Financing

You Won’t Give Up Business Ownership

To begin with, one major advantage of debt finance is that you just won’t be dropping possession of the business. Once you get rid of a loan from a financial organization or various loaners, you’re duty-bound to create the payments on time for the lifetime of the loan, that’s it. In distinction, if you hand over equity within the style of stock in exchange for funding, you may end up sad regarding input from outside parties relating to the long run of your business.


There are Tax Deductions

A strong advantage of debt finance is that the tax deductions. Classified as a disbursal, the principal, and interest payment thereon debt is also subtracted from your business financial gain taxes. Professional tip: invariably refer to a tax skilled or different monetary planner to assist answer specific questions about however debt affects your taxes.

Low-Interest Rates are Available

Credit cards, peer-to-peer disposition, short-run loans, and different debt finance isn’t useful if the interest rates square measure enthusiastically. However, there's excellent news. A little Business Administration (SBA) loan may be a nice choice for inexpensive funds. With long terms and low rates, associate independent agency loan is that the gold customary for inexpensive finance. If you don’t qualify for associate independent agency loan, there square measure many different choices out there. Simply be conscious of verity price of that loan. Work with a loaner WHO practices complete transparency thus you doesn’t get at bay in a very cycle of borrowing. Perceive your total payment, each interest, and amortization. a decent rule of thumb is that if you sometimes have quite one payment per month or if the payment calculation is too difficult, mind and beware to not move forward.


You’ll Establish and Build Business Credit

The Global Entrepreneurship Monitor report, made by Babson school and different universities, found that one among the highest reasons for discontinuing a business within the U.S. were issues getting finance. Stellar business credit is crucial if you’re seeking inexpensive, semi-permanent debt funding. Therefore, having the flexibility to make your business credit may be a major and crucial advantage to confiscating a loan. Once you build your little business’ credit, you scale back the requirement to accept your personal credit or different high-cost business finance choices. Sensible business credit may also assist you to establish a lot of favorable terms with vendors.

Debt Financing Can Save A Small Business Big Money

Often, little business house owners accept pricy debt – like credit cards, money advances or lines of credit – to induce their business off the bottom. This kind of debt cuts into income and may hinder everyday operations. A giant advantage of debt finance is that the ability to pay off high-cost debt, reducing monthly payments by a whole lot or maybe thousands of bucks. Reducing your price of capital boosts business income.

Long-term Debt Can Eliminate Reliance on Expensive Debt

There are lenders who are using aggressive sales techniques to induce businesses to require out short-run money advances. Some businesses in would like of funds can intermit or six money advances in a very row. This strategy will lure a recipient into a debt cycle with without stopping in a website. Instead, look to induce associate independent agency loan. Independent agency loans have low-interest rates, long terms, and low monthly payments. Independent agency loans may be accustomed facilitate free little business house owners from borrowing traps.


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial AdvisoryPrivate Equity,  Debt Financing and International Business Development. These Services leverages insights,   relationships and a culture that emphasizes a strong orientation towards excellence.


For additional information on how ALCOR MNA can help you Grow your Company,Complete the Enquiry form One of our representatives will contact you within one business day.  


http://www.alcormna.com

Tuesday 23 January 2018

Private Equity & Growth Capital A Growing Opportunity


Growing capital investment is showcasing a diverse set of challenges as well as opportunities to private equity investors. Not all investors are interested or active in the investment but those who are can and will seek capital investments which have matured quite often from the Venture Capital growth cycle and can be on the edge of getting positive EBITDA, but for maximizing the growth opportunities furthermore, investment is needed. Private equity might shy away from those opportunities which might turn out to be cash burning shortly. The reason behind this that there is little appetite for constant responsibility to finance general working capital and cash needs or else for investing significantly where there is less future dilution risk.


However, it's not the case that private equity desires a business that is free from capital necessities, with the non-public equity investor’s investment because it is going to be in the ancient acquisition. In most of the cases, bound funds can sure as shooting address the mercantilism shareholders of any undefeated business; abundant of the investment is also new cash for the company. For a typical growth capital investment, non-public equity is going to be searching for a business with a transparent set up modeling out any capital necessities. These are also vital in quantum, however, can typically get to be restricted and specific, and even the uses of such capital can nearly always be targeted on generating substantial EBITDA growth throughout the investment amount. Typical examples embody strategic funding acquisitions, international growth, and entry into new markets, the redoubled capability to attain a vital mass and further development.

Private Equity Structures Featuring Growth Capital Investments

An interesting trend within the market has seen company entities adopt personal equity-style structures to secure critical assets within the growth capital area. These tend to be assets that the capitalist doesn't need to miss out on, however wherever the founder believes that the business has far more growth potential that he or she desires to deliver and earn the good thing about through preserved share possession. These deals so have several of the options of a subsequent acquisition, together with from an ad, legal and tax perspective.


Many growth capital investee corporations can merely not be as prepared for the necessities of AN institutional capitalist when put next with a lot of prime acquisition candidates. This is often the case in a very variety of areas (which are equally relevant to minority investments). It's unlikely that any shareowner debt may be repaired throughout the first years of the investment. Thus loan note interest can typically roll up and sure compound (this in itself can, after all, have its impact on the real equity worth of the business going forward; this can get to be modelled carefully).

There are, of course, a variety of critical variations from the fact that the investment is from a trade customer as against from personal equity. These embody the actual fact that there'll possibly be no sale of the investee business or alternative exit on the horizon for the trade customer through that founders and managers will realize that in progress investments. Associated with this, is that the importance of the founding father of liquidity within the future and his interest not losing worth as a result of the long run capital needs of the business. This results in elaborate negotiations and agreements in such transactions for liquidity opportunities, valuation methodologies and agreement principles regarding the shape and impact of any future capital needs.


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial Advisory,  Private Equity,  Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.


For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.  

                                                                   http://www.alcormna.com

Monday 15 January 2018

ALCOR MNA Provides SME Fund as one of the Funding Options to Raise Capital for Your Business

ALCOR’s SME Fund invests in new or existing SME companies in emerging markets to fund seed capital or growth capital in the range of USD 250,000 to USD 10 Million.

Raising seed capital for a start-up company is challenging. Many seed funds are affiliated with a technology or an innovation, however, we at ALCOR understand the requirement of new technology or process in today’s contemporary world and potential revenues coupled with higher value returns. For leveraging the opportunity, ALCOR normally provides early capital ranging from USD 250,000 to USD 2 Million where a gestation period is 12 to 18 months.For well-established companies, ALCOR provides a tailored funding plan specifically designed to suit the client’s needs. We will work closely with the management team for several weeks to review the business plan and the strategic capital funding approach. ALCOR will provide the most advantageous deal and valuation for the investment offer and help the company grow multifold.


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial Advisory,  Private Equity, Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.



ALCOR MNA’s Low Cost JV Model Helps Organizations in Growing Their Revenue, Reducing Costs and Mitigating Risk

Chicago, IL – Jan 16 , 2018 – ALCOR approach is unique and self-disciplinary to ensure the client is successful. ALCOR being a global pioneer of private equity industry, our team is adept at identifying outstanding entrepreneurs and management teams of emerging businesses. We look for companies that have a clear business strategy with significant opportunities to scale up with a defendable market positioning. While we have a preference towards sectors such as Pharmaceuticals, Life Sciences, Healthcare, Consumer, Technology & Financial Services, we are happy to evaluate investment opportunities in companies in other sectors with a differentiated business model that mirrors global growth story.

We are active in the private equity market, whether advising the equity investors, management, target, or debt providers. Our practice covers not only domestic buyouts and buy-ins but also has considerable expertise advising on international transactions. The team is supported by other specialist groups within the firm. Many of our IP and regulatory partners have spent time in-house at technology or media companies, or with regulatory bodies, bringing a useful insight into the underlying due diligence of IP-rich or regulated companies.


Low Cost JV Model: A Strategy for Emerging Growth Companies

We follow a stringent evaluation process. Having a credible business plan that supports the need for growth capital and a clear exit strategy for investors is an important business criterion. Currently, while we invest significant minority stakes in private companies, in exceptional cases we also participate in management buy-outs. Additionally, in case of an outstanding business opportunity, we are willing to participate in listed companies. ALCOR M&A firmly believes that funding is vital to economic growth and its mobilization is key to broad commercialization and expansion of innovative and disruptive products and services from early stage startups and companies. Along with an innovative business idea, strong network, and exemplary execution capabilities, access to capital is the most critical requirement for startups to flourish.

ALCOR offer complete assistance to the clients across different stages of early growth spectrum to raise capital from a host of investors, both locally as well as globally. Our thorough understanding of the private equity funding process along with our global network and execution capabilities is the foundation driving our range of services within the sphere of private equity financing. ALCOR M&A through macro research, in-house analytics and frequent industry interactions, we identify industry and socio-economic trends, local consumption patterns and need-gap opportunities on an ongoing basis. With a cumulative experience of successfully investing in over 100 growth companies, we regularly refine our investment focus based on emerging trends, sectors and investment opportunities.


ALCOR offers its fund management services with an investment range of US$10mn to US$500mn along with an array of investment banking services. ALCOR augmented with an elite Board of Harvard and Oxford alumni; extends its dynamic leadership for M&A advisory, buy-side & sell-side advisory, JV advisory & execution, strategic alliance, management buyouts & leveraged buyouts, Corporate Finance & Restructuring and Business Growth Consultancy. ALCOR Fund has several portfolio companies in emerging markets.


ALCOR has become one of the leading players in PE consulting, M&A, International Business Development and consulting services over last five years. ALCOR has assisted numerous clients in North America, Europe, and Asia to grow their business in organic as well as through inorganic way. At ALCOR, we advise clients across industries during different stages of capital requirements with the primary goal of offering long term appreciation of the capital. 

Technology companies leverage M&A for innovation and growth


Technology, Media and Telecommunications companies find themselves in a period of rapid change, as digital and new technologies shift borders and transform whole industries. New analysis shows technology firms are increasingly interested in acquiring companies, in a bid to grow, access innovation, and expand into new segments. While merger and acquisition activity has been in a state of flux in recent months, technology investment remains one of the world’s fastest growing sectors, driven by innovation and disruption. The industry, has, in recent years, sought to leverage strategic mergers and acquisitions to acquire access to broader tools, as well as users’ data, among others. Facebook’s acquisition of WhatsApp for instance, or Apple’s acquisition of Shazam are examples of such strategic moves.


The industry remains well endowed with cash, while growing disruption in the Fintech space means that tech companies continue to eye ways of competing across traditional borders – with acquisitions of start-ups being a popular investment route. In terms of confidence the rapid growth of tech industry, market capitalisation is reflected across key indicators. Respondents’ level of confidence at their sector level for corporate earnings hit 71% in the latest survey, a massive 70 percentage point increase from the same period last year. Credit availability increased significantly too, while short term market stability was cited by 68% of respondents as improving. The industry is well positioned in terms of equity valuations / stock market outlook, cited by 46% as improving and 51% as stable.The current strong position of tech industry respondents places them in a comfortable position to consolidate, expand and access key technologies and talent – through M&A. The number of respondents that expect to pursue M&A over the coming 12 months stood at 57% in the tech industry, a seven-percentage point increase on the previous year and well above the 33% recorded in October 2013.


The tech industry has also increased its acquisition appetite to that of the wider global industry, after considerable divergence between October 2015 and April 2017. The firm notes, however, that while intentions were relatively subdued for the 2015-16 period, actual deal activity was – like much of the wider industry – booming. This year will likely see deal volume decrease by 9% and deal value by 34%.The key drivers cited by the tech firms surveyed reflect wider trends in the strategic M&A space. The top cited reasons include acquiring innovation (24%) and growing market share (also 24%). Access to new geographies and additional talent follow, at 18% and 16% of respondents respectively. Reactions to changes in customer behaviour and securing supply follow, at 14% and 4% respectively. Commenting on the sector’s M&A appetite, the authors stated, “The question of how much of today’s tech sector optimism translates into tomorrow’s done deals will be answered in 2018. Tech companies can work to realise their deal making intentions by taking deliberate steps indicated in these pages: re-evaluate their portfolio review process, take advantage of modern analytical tools, prepare for an increasingly competitive M&A market and pre-plan for integration.”


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial Advisory,  Private Equity, Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.


Wednesday 10 January 2018

First-Time Venture Capital Funds See Strong Performance


Venture capital* fundraising has seen a slight slowdown in in the first three quarters of 2017 when compared to the same period last year. However, first-time venture capital funds represent a larger proportion of total fundraising compared to last year. As at September 2017, first-time venture capital vehicles represented 31% of all venture capital funds closed, compared to 25% in the same period last year. Additionally, the number of first-time funds in market has increased from 470 as at September 2016, to more than 590 in September 2017. Despite the many obstacles that emerging fund managers face, first-time venture capital funds of vintage 2010 or older have generated substantially higher median returns than vehicles run by experienced managers. In fact, first-time venture capital funds of all vintage years between 2006 and 2014, except for 2008 and 2009, have outperformed non-first-time funds.


Key First-Time Venture Capital Facts:

• As at September 2017, there are more than 590 first-time venture capital funds raising capital, up from 470 this time last year. By contrast, there are 900 successor vehicles currently in market.
• The first three quarters of 2017 saw 114 first-time venture capital funds close, which represented over 31% of all venture capital vehicles which saw a close, compared to 25% in the same period last year.
• First-time managers generally outperform experienced venture capital managers. The median net IRR for 2006-2014 vintage first-time venture capital funds is 12.9%, compared to 9.9% for experienced managers.
• On average, first-time vehicles outperformed non-first-time funds with vintage years from 2011 to 2014. In fact, first-time funds with vintage year 2014 have a median IRR of 21.5%, while non-first-time funds have a median IRR of just 7.8%.
• However, first-time funds are riskier: while first-time funds have a standard deviation of 19.1%, vehicles raised by experienced managers have a standard deviation of 15.6%.
• Although the greatest proportion of venture capital investors which have active first-time mandates are based in North America, the region has seen a drop in the proportion of such investors from 51% in 2016 to 40% in 2017.
• By contrast, Europe has seen an increase in the proportion of venture capital investors with first-time mandates from 26% in September 2016 to 32% in September 2017.


 “Launching a debut venture capital fund is a daunting prospect. In recent years the fundraising market has become increasingly crowded, and first-time fund managers are often competing with established firms which have built up their performance track record and can rely on pre-existing networks of investors. As such, debut fund managers have to be careful in how they position their fund’s strategy and scope, as well as how they approach and market to investors. Many investors remain less receptive to first-time funds, concerned that without an established track record they cannot commit to a vehicle.

However, there are indications that these reservations are being overcome, and that investors are warming to investing with emerging firms. This may be in part because first-time funds have consistently outperformed their experienced peers in almost every recent vintage year, offering investors outsized returns. The key challenge is in overcoming the legitimate concerns about the wide dispersal of performance, and convincing prospective investors to commit without requiring a previous track record.”


Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial Advisory,  Private Equity, Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.



Thursday 4 January 2018

M & A News In The Healthcare Industry Sector


The report below provides a good overview of the fourth quarter M&A activity in the Healthcare Industry Sector. 

M&A activity for North American based target companies in the Healthcare sector for Q3 2017 included 183 closed deals, according to data published by industry data tracker FactSet.
National health expenditures are projected to grow at a rate of 5.6% on average per year according to the U.S. Office of Actuary. The country’s aging population is expected to contribute significantly to that spending growth.

Industry Indicators
  • US consumer prices for medical care commodities, an indicator of healthcare costs, increased 2.4% in August 2017 compared to the same period in 2016.
  • US consumer prices for medical care services, an indicator of profitability for healthcare services, rose 1.6% in August 2017 compared to the same month in 2016.
  • Total US revenue for healthcare and social assistance rose 3.4% in the second quarter of 2017 compared to the previous year.

Industry Update

The use of telemedicine in US health care networks is rapidly growing, but the extent of treatment varies widely due to differences in state coverage policies. Currently, 48 states and Washington, DC, include some form of live video reimbursement in their Medicaid fee-forservice models. While states are gradually expanding laws and program guidelines to cover more telehealth services, reimbursements are often restricted to certain types of care. Most states don't allow reimbursement for store-and-forward (data transmission) and remote patient monitoring services.
Only a few states allow telehealth to fulfill insurers' "network adequacy" standards – mandates on how many physicians and facilities must be included in a coverage network to ensure proper care, according to California Healthline. Regardless, health networks are steadily increasing use of telehealth tools to fulfill value-based care initiatives. For California health network Kaiser Permanente, a majority of patient interactions now occur through online portals, apps, or virtual visits.


Transactional Overview

Notable closed lower middle market transactions for the period in Healthcare sector include:

September 2017 – Dynatronics Corp. acquired Bird & Cronin, Inc. for US$15.5 million in cash, convertible preferred stock and contingent payout. Under the terms of transaction, Dynatronics Corp would pay US$10 million in cash, US$4 million in convertible preferred stock, an earn out payment ranging from US$0.5 million to US$1.5 million. Dynatronics Corp. manufactures and distributes technology medical devices, treatment tables and rehabilitation equipment. Bird & Cronin manufactures and distributes orthopedic products.

June 2017 - Saol International Ltd acquired Venus Biotherapeutics Sub LLC, a subsidiary of Aptevo BioTherapeutics LLC, ultimately owned by Aptevo Therapeutics Inc, for US$74.5 million. Under the terms of transaction, Saol International Ltd would pay an upfront payment US$65 million and an additional US$7.5 million related to the achievement of certain gross profit milestones and may receive up to US$2 million related to collection of certain accounts receivable after closing. Saol International operates as an investment holding company. Venus Biotherapeutics provides therapeutic products.

July 2017 - Grifols Innovation & New Technologies Ltd, a subsidiary of Grifols SA, acquired a 44% minority stake in GigaGen Inc for US$35 million in cash. The acquisition would strengthen Grifols Innovation & New Technologies’ research and development portfolio. Grifols Innovation & New Technologies provides research and experimental development services in biotechnology sector. GigaGen offers single cell droplet technology to clinical researchers and physicians.

Source - CFA

Collectively, the  Alcor Mergers and Acquisition  provides M&A advice to public and private companies in all sectors of the healthcare industries, including healthcare information technology, medical devices, pharma, surgical equipment and supplies, biotechnology, assisted living and long term care.

Alcor M&A is a leading advisory firm providing financial services with an emphasis on customized solutions in the areas of M&A advisoryJoint Venture AdvisoryFinancial Advisory,  Private Equity, Debt Financing  and International Business Development. These services leverages insights, relationships and a culture that emphasizes a strong orientation towards excellence.

For additional information on how ALCOR MNA can help you Grow your Company, Complete the Enquiry form One of our representatives will contact you within one business day.