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• I
want to sell a percentage of my company
• I would like to buy a percentage of a
company
I want to sell a percentage of my company
How is my company
valued? How are my assets
valued?
Our highly successful process starts with a visit by a member of
our team for the purpose of valuing your company. We want to be
sure that we can meet our clients’ expectations before we
take an assignment. Our written valuation reports explain how
we apply three or four approaches—those used by buyers and
investors—to
your financial information to arrive at a range of values for
your company. We also discuss the subjective factors, such as
market share, strength of management team, etc., and their impact
on your company’s value. The report will typically address
structures we believe will help you receive the highest value
for your company. We charge a fee for this service, and there
is no commitment to engage Michael P. Kahn & Associates.
Since we close the largest number of transactions of any consultants
in the homebuilding industry, we get regular feedback on the accuracy
of our initial valuations. Michael P. Kahn & Associates continuously
meets, and frequently exceeds, our clients’ expectations.
I’m not ready to share my intentions
with my staff, how can this be kept confidential?
Most of our clients are concerned about confidentiality, and we
employ several techniques to keep information closely guarded.
We restrict our phone calls and emails to accounts you specify
as private; some of our clients set up email accounts outside
their company’s
email system. We hold meetings with potential buyers and investors
off-site, and can even arrange for due diligence review to be performed
off-site.
How can I protect myself from misuse of
information I share with potential buyers?
Each interested buyer and investor is required to sign a confidentiality
agreement prior to receiving detailed information. The agreement
restricts how information can be used and to whom they may speak,
and prohibits them from hiring your staff for a period of time.
In addition, we work with the top executives and investment groups
of the acquiring companies and can restrict sharing of information
with division-level staff in your market(s).
Who are the buyers? Who are the investors?
The buyers of homebuilding companies are generally large public
or private homebuilders. Their motivation for buying a company
is to enter a new market without stumbling, or to expand in a
market where they already have operations, possibly with a different
product type or price point. Michael P. Kahn & Associates,
Inc. works
with the top executives of these companies, and has completed
many transactions with the most aggressive buyers.
Currently there are a large number of Hedge Funds and Private
Equity Groups looking to enter the “Homebuilding Space” through
a buy-in into a well-managed homebuilding company.
The ideal candidate
will possess:
- An excellent long-term franchise and reputation for
delivering quality product at reasonable prices
- Continuing access
to land and lots
- Experience managing in the full spectrum of housing
market conditions
- A strong senior management team willing to continue
with the business for at least 5-7 years
- A strong bench of mid-level
managers to support the senior team
- An information and accounting
system that is up to date, and able to generate management reports
on a frequent basis
- A strong interest in growing the operation
and capitalizing on opportunities to buy lots and/or communities
arising as a result of the housing downturn.
What will happen to the loyal team I have
assembled?
The stories of buyers acquiring companies and letting go of all
the staff are mostly from long ago, and were very limited in the
first place. Buyers and investors we work with recognize the importance
of human capital, and want to avoid losing talented people with
local market knowledge. They are making an acquisition or investment
to avoid stumbling in a new market, and are relying on your team’s
expertise. Your key staff will probably be asked to sign employment
agreements which keep them on for a stated minimum period of time
and create incentives for them to continue to do a great job growing
the company.
How long does Michael P.
Kahn & Associates, LLC.’s process take?
Our clients are often surprised how fast we move. From the point
of a signed engagement letter and receipt of your retainer, we
assume 30 to 45 days to prepare marketing materials, another 30
to 60 days to actively market a company and obtain one or more
letters of intent from buyers and investors, and another 60 to
120 days to close the transaction. Our team supports each stage
of the process, preparing the marketing materials, providing you
with regular updates on the marketing process, setting up and attending
appointments for visits by prospective buyers and investors, and
negotiating the business agreement and tax treatment.
Working with the Hedge Funds and Private Equity Groups newly entering “the
Homebuilding Space” requires an additional 30-45 days beyond
the normal timeframe described above. The additional time allows
for the Fund Managers to establish working relationships with prospective
builder partners.
How does Michael P.
Kahn & Associates, LLC. get paid for its services?
We charge a flat fee plus travel expenses for our on-site valuation
visit. We charge by the hour while we are developing your marketing
materials, actively marketing your company, and negotiating and
closing your transaction. The hourly charges, which are billed monthly,
are offset 100% against our transaction fee payable at closing.
Our transaction fee is the higher of a percentage of the total purchase
price or a minimum fee, and sometimes an additional fee for exceeding
stated multiples of book value.
I would like to buy a percentage of a company
How can Michael P.
Kahn & Associates, LLC. help me buy a company?
Approximately 40% of Michael P.
Kahn & Associates, LLC.’s business now is representing buyers
in a focused search for candidates in the markets they choose,
using the pricing, product and other criteria they supply. Our team can
provide market research support to assist you in deciding which
market(s) to target. Michael P.
Kahn & Associates, LLC. utilizes local contacts in the market
and rankings of top builders to create a starting list, then researches
each to evaluate the fit with your criteria. We arrange for confidential
agreements to be signed, strategic and financial information to
be exchanged, set up conference calls and/or site visits, establish
valuations of our clients’ preferred targets, and negotiate
the transaction. We continue to support the transaction through
closing to address any concerns that arise during due diligence.
How does Michael P.
Kahn & Associates, LLC. handle confidentiality concerns?
Our team considers every client’s strategies and plans for
expansion as confidential. We are careful to avoid taking on an
assignment which would conflict with another ongoing assignment
in terms of market and scope of work. We utilize two-way confidentiality
agreements for most buyer and investor assignments, which restrict
the use of the shared information, who may be contacted, and prohibits
both our client and their prospects from hiring each other’s
staff for stated time periods. Meetings with prospects are typically
held off-site.
How long does Michael P.
Kahn & Associates, LLC.’s process take?
The time frame varies according to our clients’ needs. Market
research in support of selecting a market to target can take several
weeks to a couple of months, depending on the number of markets
to be researched and compared. Once a market is selected, an initial
list of potential candidates is completed within two to three weeks.
Contacting prospects, obtaining detailed financial and strategic
information and setting up conference calls or visits usually requires
one to three months, depending on the number of candidates and our
clients’ availability for travel. Valuations and formulating
offers may take one to two weeks according to the number of candidates
and schedules. The due diligence period and closing date are negotiated
according to our client’s sense of timing to complete the
review, and familiarity with the market.
How does Michael P.
Kahn & Associates, LLC. get paid for its services?
We charge by the hour for our work in market research, identifying
and contacting prospects, arranging and participating in conference
calls and visits, negotiating and closing a transaction. These hourly
charges are billed monthly, and are 100% offset (excluding travel,
data and other approved expenses) against our transaction fee payable
at closing. Our transaction fee is the higher of a percentage of
the total purchase price or a minimum fee, with a declining fee
structure for subsequent transactions. |
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