IBA is predominantly a sell side representation firm serving the upper Main Street and Middle Markets in the Pacific Northwest. On a very selective basis, IBA will represent buyers in acquisitions of businesses. IBA’s buyer representation is almost exclusively for prior clients, parties who have identified a specific company for acquisition, or to come to the aid of a professional partner in the business community.

All of IBA’s fees are paid by our sell side clients. There is no cost for a buyer to evaluate a business represented for sale by IBA as a potential acquisition. All potential business buyers will be asked to complete a confidentiality agreement and demonstrate the ability financially to negotiate in “good faith” prior to receiving specific information about a business represented for sale by IBA.

The best way to review businesses represented for sale by IBA on an ongoing basis is to participate in our buyer database program. Participants in IBA’s buyer database program proactively receive information on businesses represented for sale by IBA that match their acquisition criteria. Participants in IBA’s buyer database program are required to complete a confidentiality agreement, hold all information provided in strict confidence, and demonstrate the financial ability to negotiate in “good faith”. All information provided to IBA is held in strict confidence.

IBA does not publish a complete set of the businesses it has listed for sale to control the distribution of confidential information and due to the spectrum of industries and sizes of businesses we represent for sale. We prefer to match qualified buyers with specific businesses as they enter the market and professionally present the companies for sale to potential buyers.

IBA is happy to co-broker a transaction and share commission with another business broker. IBA requires the buyer’s broker to make the first inquiry about a business on behalf of their client to be eligible to share commission. If the potential business buyer contacts IBA directly before engaging a broker, IBA remains happy to work collaboratively with the buyer’s broker, but will not share commission.

IBA recognizes that finding a business to purchase in a specific geographic area can be problematic. To address this issue, IBA has a certified franchise broker, Curt Maier, on staff who has the ability to assist with franchise acquisitions.

IBA has a strong collaborative relationship with the Pacific Northwest banking community. We are happy to provide introductions to experienced, knowledgeable bankers actively financing business acquisitions.

IBA recommends all business buyers engage an experienced, knowledgeable business attorney to assist with a business acquisition. IBA is happy to provide introductions to business lawyers we have worked collaboratively with in the past and found their work superior.

IBA recommends all business buyers engage an experienced, knowledgeable CPA or accountant to assist with a business acquisition. IBA is happy to provide introductions to accountants who work with business owners we have worked collaboratively with in the past and found their work superior.

Artificial intelligence is a beneficial tool to use for research and analysis. IBA uses AI in its valuation and sale process. The problems with using AI to value a business are fourfold:

1. The analysis done by AI is only as good as the data it can access. There is no requirement, like with real estate, to publicly report the financial terms of business sales. Only a small percentage of data about completed business sales is found in the public domain. Most of the data is held in strict confidence by the buyer, seller, mergers & acquisitions firm, CPA firm, and/or law firm involved in a specific transaction.

2. Even when the data is available, the terms of sale (percentage cash paid at closing versus amount financed by the seller) and the motivation of the parties to complete a sale (A business owner selling due to health issues versus a company being acquired by a highly motivated strategic buyer) are commonly unknown.

3. The data commonly used for AI analysis is commonly dated. Market conditions in the M&A world change monthly influenced by industry trends, interest rates, new technology, etc. Would you purchase a publicly traded stock based on transactions that occurred 3, 6, or 12 months ago? It is also prudent when valuing a privately held company to use current market data in pricing the entity. The dealmaking M&A firms working in a specific industry and geographic area possess the most current data for valuation.

4. AI commonly produces generic analysis versus localized analysis. Not all marketplaces are the same across the United States. As a local, Pacific Northwest example, two companies doing the same revenue with the same net income on their federal tax returns in the same industry one located in Oregon and one in Washington would likely not sell at the same value. The reason, Oregon has a state income tax and Washington does not. The business owner of the Washington company annually takes more money home than the Oregon entrepreneur. Logically, the Washington company should be worth more in the marketplace than the Oregon one unless local market demand dictates otherwise.

Sold comparables of similar businesses are an interesting datapoint when valuing a privately held company or family business. They have the highest value when they are located in the same geographic location, operate a substantially similar business model, and the motivation behind the transaction for both the buyer and seller are known.

The gatekeeper to accessing a business owner interested in selling their company is commonly the professional business sale intermediary they have engaged to support them in the transaction. This party was commonly selected based on their knowledge, experience, and skill as a business broker.  It is prudent for a business buyer interested in one of the M&A intermediary’s representation projects to communicate with this party in a professional manner and follow their established process for creating a confidential environment for the exchange of information and qualifying potential buyers in terms of financial strength and relevant executive experience.  If interest remains in the potential business acquisition after engaging with the business broker, a buyer should prioritize scheduling an in-person meeting with the business owner to present themselves as a qualified candidate to be their successor in ownership, tour the company, and get their operational and business history questions answered in a multi-sensory environment.  The less digital engagement with a business owner in terms of questioning early in the process the better.  A buyer only has one chance to make a first impression.  Entrepreneurs are essentially selling a child that they have devoted significant time, energy, and resources to in the past. They will commonly have choices on who to sell to, and a buyer who fumbles the initial engagement process with a business owner often will never recover and complete the acquisition. Equally, a buyer who was difficult for a business broker to work with previously will not be advocated for as a potential buyer to future clients.

Successful business buyers commonly enter negotiations with attention to detail. They define the specific acquisition terms for a business with the ability to justify the price offered, clearly define the process that will occur between LOI acceptance and closing, and establish a specific timetable with calendar dates for achieving the mileposts necessary to successfully complete the transaction on time.  Often the biggest variable impacting the closing date for a transaction is when funding will be available. A knowledgeable, experienced, business broker will know this market information fluently.   A detailed, term sheet from a specific bank that has vetted the buyer and the business in terms of debt service coverage and relevant experience will often be required from a business broker for their client to review before negotiations will be commenced.