For firms under $15 million in annual revenue, the options to sell are not optimized to net the owners maximum value. Financial buyers such as private equity firms are typically not interested in companies in this size range. In many cases, owners are left to rely on ‘word of mouth’ to find a buyer—an approach that neither maximizes exposure to a large enough pool of potential buyers necessary to command the highest possible price nor preserves confidentiality. Where investment bankers and M&A brokers will work with a firm at all, their fees for firms of this size are extraordinarily high, starting at $250,000 plus a $10,000 per month retainer.
The obstacles confronting sellers creates the corollary problem for buyers: no access to a ready pool of companies for sale. TechServe Alliance Services Corp. has created a better way . . .
Drawing upon the vast TechServe Alliance network, we have access to a large group of prospective buyers: other staffing firms. By expanding the pool of potential buyers to include firms that may not have previously contemplated an acquisition and dramatically reducing the sell-side advisory fees to only $5,000 — a fraction of the cost typically paid by sellers to M&A brokers, we can help smaller firms maximize their net proceeds on sale.
To help guide owners through the process, we have assembled a team of IT & Engineering Staffing industry veterans with transactional experience and deep knowledge of how to position a firm to achieve maximum value on sale. Additionally, using the collective buying power of the program, we have arranged for discounted rates for legal services with Becker LLC, a law firm with significant M&A experience in the staffing industry. For sellers, legal costs are a set fixed fee based on deal size.
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By creating a large pool of qualified buyers competing for the opportunity to acquire IT & Engineering Staffing firms along with low fixed advisory and legal fees disclosed upfront, owners significantly increase the likelihood they will maximize net proceeds from the sale of their company on favorable deal terms.