Buyer Profile
Type- Community Bank
Offices- 1 State
Number of branch offices- 8
Location- Mid Atlantic
Business Channel- Traditional Retail Banking
Summary- This small community bank does not currently have a mortgage company. They are looking to buy a small company and have the current owner stay on as President to run the mortgage company as a subsidiary of the bank. The bank may offer the seller an ownership interest in the mortgage company and/ or stock in the bank. They are looking to acquire one mortgage company with yearly closed loan volume of between $100 million to $500 million.
Buyer Profile
Type- Independent Mortgage Banker (IMB)
Offices- 50 States
Number of branch offices- Disclosed upon signing of NDA
Location- Entire USA
Business Channel- Traditional Retail Mortgage Banking -Loan Officer self-sourced.
Summary- This IMB is a well-known and respected Top 20 Lender in the country. They are in an aggressive acquisition mode and are looking to buy multiple companies. They would prefer the owner stay on, but for larger acquisitions would consider a onetime buyout from the current owner. This IMB is open to various structures of acquisition including as an owned subsidiary, DBA, net branch etc. The IMB may offer the seller an ownership interest in the mortgage company. They are looking to acquire multiple mortgage companies with yearly closed loan volume of between $100 million to $2 billion yearly.
Buyer Profile
Type- Venture Capital Backed Company.
Offices- Disclosed upon signing of NDA.
Number of branch offices- Disclosed upon signing of NDA.
Location- Entire USA.
Business Channel- Traditional Retail Mortgage Banking -Loan Officer self-sourced.
Summary- This VC backed company is looking to buy a mortgage company for a onetime upfront lump sum payment. They are open to the current owner either staying on or not. The seller must have all agencies approvals including Ginne Mae. They are looking to acquire one mortgage company with yearly closed loan mortgage volume of between $1 billion to $3 billion yearly. They are willing to pay the higher of 7 times net earnings or 100 basis points on the last 12 months closed loan volume.
The process/steps for consummating the selling of your company are as follows:
Step 1- 30 minute introductory call with Milestone Mergers.
Step 2- Sign NDA with Milestone Mergers.
Step 3- Sign Contract for Milestones Mergers Fees.
Step 4- Sign NDA with seller.
Step 5- Introductory Zoom Meeting with Seller.
Step 6- Exchange of Basic Financial information.
Step 7- Sign Non-binding Term Sheet for Sale of your company.
Step 8- Sign Binding Contract for Sale of your company.
Step 9- Seller to provide deposit in the amount of 20%.
Step 10- Complete Due Diligence within 30-60 days.
Step 11- Close on Transaction.
Please contact us to discuss selling your Mortgage Company
Gary Freedman
Managing Partner
Fairfax, VA 22030
Cell: 703-501-0500
Financial Health and Growth Potential:
Prospective buyers often prioritize companies with a strong financial performance and promising growth potential. Selling during a period of robust financial health can attract higher valuations and a broader pool of interested buyers.
Industry Trends and Market Conditions:
Keeping an eye on industry trends and market conditions is essential. High demand for businesses in your sector can lead to better offers. Understanding the overall economic climate helps gauge potential buyers' appetite for acquisitions.
Personal and Business Readiness:
Assessing your personal and professional readiness is crucial. If internal challenges or burnout is a concern, it may be the right time to consider a change in ownership.
Competitive Landscape:
Evaluate the competitive landscape in your industry. A unique position or a competitive edge can make your company an attractive proposition for buyers seeking strategic advantages.
Technology and Innovation:
In industries driven by innovation, selling at the peak of technological advancements can be advantageous. Buyers may be willing to pay a premium for access to cutting-edge technology and intellectual property.
EVALUATING THE MARKET
Understanding the market dynamics and accurately assessing your company's value are pivotal steps in the selling process. Effective market evaluation involves a combination of financial analysis, due diligence preparation, and collaboration with industry experts.
Financial Valuation:
Engage financial experts to conduct a thorough valuation, analyzing financial statements, cash flow, and growth projections. A realistic valuation is crucial for attracting serious buyers.
Comparable Sales Analysis:
Research comparable sales in your industry to benchmark your company's value. Analyzing recent transactions provides insights into market trends and pricing expectations.
Due Diligence Preparation:
Conduct a comprehensive due diligence review of your own company. Proactively address potential issues, enhancing transparency and building trust with potential buyers.
Industry Experts and Advisors:
Seek guidance from industry experts and experienced advisors, such as investment bankers and legal professionals. Their insights can provide valuable perspectives on market conditions and the sales process.
Market Timing:
Timing is critical in mergers and acquisitions. Assess the market cycle and potential economic shifts to strategically time the sale for maximum value.
STRATEGIC CONSIDERATIONS
Beyond timing and market evaluation, strategic considerations significantly impact the success of a company sale. These considerations encompass identifying the right buyers, preparing for due diligence, negotiating deal structures, and planning for the post-sale transition.
Identifying the Right Buyers:
Determine the type of buyer that aligns with your objectives, whether it's a strategic buyer, a competitor, a private equity firm, or a management buyout.
Preparing for Due Diligence:
Anticipate and prepare for the due diligence process by organizing financial records, contracts, and legal documents. Proactive preparation streamlines the examination of your company's operations.
Negotiation and Deal Structure:
Engage in strategic negotiations to achieve the best deal structure. Consider factors like cash versus stock transactions, earn-outs, and non-compete agreements.
Employee and Customer Communication:
Transparent communication with employees and customers throughout the sale process is crucial. Open communication fosters trust and stability during the transition.
Post-Sale Transition Planning:
Develop a post-sale transition plan to ensure a smooth handover of operations. Consider the integration process, key employee roles, and customer relationships. A well-executed transition plan minimizes disruptions and sets the stage for the new owner's success.
CONCLUSION
Successfully selling a company requires a multifaceted approach. By carefully evaluating the optimal timing, thoroughly assessing the market, and considering strategic elements, you can navigate the complexities of the process and maximize the value of your business in a competitive market.
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