Offit Kurman`s M&A team can help you prepare and maximize the sale of your business. To get in touch with a lawyer specializing in mergers and acquisitions, click here. To learn more about current M&A opportunities and news about other transactions, visit mandapulse.com. To discuss how our team can help your business, contact us by phone Offit Kurman is one of the fastest growing full-service law firms in the United States. With 14 offices in seven states and the District of Columbia and 50% growth in two years through expansions in New York and Charlotte, North Carolina, Offit Kurman is well positioned to meet the legal needs of the dynamic businesses and individuals who own and operate them. For more than 30 years, we have represented private companies and patrimonial families throughout their life cycle. In contrast, valuation fell over the same period for all other categories of defense and government services studied: large multiplatform contractors, defense technology companies, diversified IT suppliers, and commercial aerospace manufacturers and suppliers. We have recreated the table below. As with all commercial transactions, the issuance of M&A transactions by the government is cyclical.

Valuations are high now, but it won`t stay that way much longer. Business owners considering selling should be prepared to sell now or survive a market downturn that could last for several years. With government spending accounting for 35.1% of U.S. gross domestic product in 2018 (of which federal spending accounted for 20% and state and local governments accounted for the rest), government procurement is a big business. This has led to strong M&A activity in this sector, especially from medium-sized private companies. However, doing business with the government and obtaining correct assessments for private acquisition targets requires a thorough knowledge and understanding of the risks and opportunities faced by government contractors. To understand the unique characteristics of government contractors and how these nuances affect their market value, we will examine the sector, analyze how cascading contract characteristics affect future cash flows, the role of the federal government in creating competition, current market dynamics, and the role of private equity in acquisitions and valuations. Mergers and acquisitions (M&A) in public procurement have reached new heights. That`s according to Intel`s Defense and Government Services Market Report (PDF) released last month by investment banking firm Raymond James. The report shows that the earnings before interest, taxes, depreciation and amortization (EBITDA) valuation multipliers of government service providers are remarkably high. In addition, valuations have shown an upward trend in recent years, from 10.8x in 2017 to 13.4x in 2019.

Offit Kurman has helped many government entrepreneurs in the Mid-Atlantic region and beyond successfully sell their businesses. Over the past few months, our team has worked with clients to close the following deals: Government entrepreneurs who have built successful businesses over a long period of time often neglect to answer a simple question until very late in the game. The question “What is the value of my business?” has far-reaching implications and emerges in a number of scenarios, such as selling the entrepreneur`s business, creating long-term incentive plans for employees, planning the estate/estate of the business, and the death/divorce of an owner. At least once a month, we get a call from a customer or potential customer asking us something like, “I want to sell my business and have an offer on the table. What`s next? If you know what your business is worth, so much the better – you may be able to move immediately to signing a confidentiality agreement and negotiate a letter of intent, but how many business owners are in the best position to know if a particular offer is fair? Business valuations are carried out by auditors who have particular expertise in business valuation. Depending on the circumstances, a number of methods are used. For example, pre-sale valuations are likely to be different from in-house valuations to create phantom shares or stock appreciation rights plans, for example. The most common valuation methods are: asset-based. This is a factual and objective methodology based on the assets currently on the company`s balance sheet. An asset-based valuation is the most conservative type of business valuation and generates the generally known “book value” of a business.

Book value is difficult to dispute because it is simply a snapshot of the value of everything on a company`s balance sheet at any given time. However, its weakness is that it ignores the future cash flows generated by these assets. If a business is active and healthy, and is expected to generate increasing profits in the future, an asset-based valuation is likely to be lower than the actual value of a business. .