IBA is commonly recognized as the premier sell side representation mergers & acquisitions firm in the Pacific Northwest to facilitate the sale of construction industry and allied trade companies for premium values employing “best practices” in an environment of confidentiality. The members of our construction industry transaction team are market leaders in terms of knowledge, experience, and professional deal negotiation/facilitation skill set that are sought after by entrepreneurs and the region’s attorneys & CPA’s to represent their clients. IBA has recently represented construction industry entrepreneurs in the sale of building products manufacturing businesses fabricating products out of steel, wood, glass, textiles, & fiberglass; distribution companies selling products from roofing materials to school & storage lockers; construction companies building & remodeling homes, commercial buildings, carports, and docks; service trade providers of heating, cooling, electrical, and plumbing; equipment rental companies, floor covering sales & installation businesses; and excavation, utility, and site prep contractors. These transactions provided IBA with current market information relevant to pricing, buyer demand, market dynamics, and deal terms that supplied our clients with a competitive edge at time of sale. The construction industry M&A deal space is sophisticated and currently robust. If you are interested in selling a construction industry business in 2019, we would welcome the opportunity to provide an overview of the services we offer our clients. All information shared with IBA is held in strict confidence.
The following is an overview of the skills & services offered by IBA to its clients selling construction industry businesses:
Business Valuation – The first step in the sale of a construction industry company is to determine the price it should be offered to potential buyers. Business valuation is a sophisticated, subjective science that requires an understanding of the accounting models commonly employed by construction industry companies; the valuation models currently being employed in the marketplace by business buyers; the market environment for similar companies in the relevant industry niche & geographic area; and the financing conditions that exist to support acquisitions in the construction industry sector. All four of these factors are critical components to properly valuing a business for sale. Business owners are cautioned against having a party value or represent a business for sale that is not active in the business brokerage marketplace for construction industry businesses, as lack of knowledge of recently completed transactions, the market conditions created by buyer demand, and acquisition financing availability can result in a business being improperly valued. An improperly valued business traditionally sells at a lower price with a longer time period of exposure on the market. Neither of these outcomes are good for an entrepreneur desiring to sell or the company being sold.
Business owners should also be wary of firms that either outsource their business valuations or take businesses to market without an established value. The best business brokerage firms have the knowledge, experience, and ability to value businesses “in house”. A business value needs to be justified & persuasively sold by a business broker to the buyer, their CPA or CFO, their attorney, and bank and/or investors to successfully complete a transaction. A business broker that does not understand the sophisticated intricacies of how & why a specific value was assigned to a specific business will be at a disadvantage when selling the construction industry company and fail to close potential buyers.
IBA offers complimentary professional opinions of market values of businesses to potential clients. 100% of IBA’s fees are paid on performance upon completion of the sale. This business model encourages an honest assessment of value and makes the business broker accountable for delivering their price in the marketplace. Most businesses sold by IBA sell within 10% of the price we go to market and the final sale price is often in alignment with our precision assessment of value that is a component of our business evaluation. IBA sold construction industry companies in 2018 for six, seven, & eight figures for clients.
Professional Sales – The successful sale of any product or service requires a presentation that persuasively articulates the attributes & benefits of the item to a potential buyer. Professional representation of a construction company requires an individual that can convey the unique attributes of the business, financial history, market niche, and future opportunities presented for the company. If this cannot be accomplished, the company will not sell or will sell at a value reflective of the amount of information conveyed. It is recommended prior to selecting representation that business owners have the party convey to them an overview of their business model and competitive advantages of their business to assess the level of knowledge and sales skills of the individual. It is also important to select a broker that has successfully completed transactions involving construction industry businesses and has ongoing engagement with the different demographic groups of buyers interested in acquiring companies in this sector. A few of the demographic groups currently acquiring companies in the construction industry sector include companies increasing market share in an existing niche; companies bringing manufactured components in house to control production schedules and supply; private equity firms, non-profit corporations; and individuals with relevant experience desiring entrepreneurial investment opportunities for direct management. IBA interacts on a regular basis with all of these buyer demographic groups and maintains a database of buyers actively seeking acquisitions in the construction industry sector in the Pacific Northwest. Many of the buyers in IBA’s buyer database are only actively engaged in the mergers & acquisitions marketplace in the Pacific Northwest with IBA based on IBA’s reputation for confidentiality, integrity, and “best practices” in facilitating the sale of a privately held companies.
Experience – The probability of achieving the successful sale of a business is enhanced with the engagement of experienced representation to value, market, sell, negotiate, and facilitate the transaction process. There is no substitution for knowledge & experience. Business brokerage is a business best learned through action and repetition. No business owner wants to be the “trial client” for a business broker to gain the experience necessary to be successful in one of the most sophisticated sales professions in the business world. All business owners want to employ a firm that has the ability for their broker to reference prior personally facilitated transactions, similar negotiations, professional colleagues that have facilitated similar transactions, and relevant conversations with prior client attorneys & accountants during the sale process.
Resources – An ascent of Mount Everest requires experience, knowledge, a professional skill set, and proper provisions for the journey. The sale of a business also requires the appropriate resources to complete the transaction. Business sale resources are commonly cerebral in nature. They include a business attorney cognizant of the “best practice” legal verbiage components employed in a mergers & acquisitions transaction involving a construction industry company; a CPA with the ability to mitigate the tax implications of the transaction for their client, facilitate due diligence efficiently & effectively, and having prior experience valuing components like work in process; and bankers at lending institutions actively engaged in acquisition financing in the construction industry sector. Frequently IBA’s clients bring skilled attorneys & accountants to transactions. Equally common are situations where IBA M&A intermediaries are asked for recommendations of legal & accounting professionals with relevant experience related to the purchase & sale of construction industry companies. We are happy to provide referrals of professionals who have performed at superior levels for their clients in previous IBA facilitated transactions. IBA is also commonly asked to refer bankers experienced with financing construction industry company acquisitions to buyers. We view this as part of our seller representation role, as a transaction cannot close without sufficient capital. Knowing how & where to access acquisition capital is a valuable resource to completing mergers & acquisition transactions.
The sale of a construction industry company can be compared to a game of chess. Anyone can sit down at a chessboard and play a game. However, victory at chess is rarely luck. The same is true for selling a business. Anyone can attempt to sell a business. However, only the most experienced, knowledgeable business brokers with the highest professional skill set can consistently deliver premium prices for their clients in a transaction facilitated employing “best practices” while maintaining an environment of confidentiality throughout the sale process. IBA has successfully facilitated over 4000 transactions since 1975 for our clients in the Pacific Northwest. Many of those transactions involved construction industry companies. If you are interested in selling a construction industry business, we would welcome the opportunity to convey IBA’s sales strategy for achieving the best possible outcomes for our clients in a timely manner. The members of IBA’s construction industry transaction team Gregory Kovsky, Jeff Bryan, Mike Luitgaarden, and Curt Maier welcome the opportunity to meet or talk on the telephone with construction industry and allied trade entrepreneurs. IBA is an actively engaged allied member of the Master Builders Association and values its role as a resource to that community. Please call our office at (425) 454-3052 or email info@ibainc.com, if we can be of assistance.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, and mergers & acquisitions community on subjects relevant to the purchase & sale of privately held companies and family owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.