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VR Facilitates Sale of Company to Employees Using ESOP
(A Qualified Retirement Plan, Similar to a 401(k))
ByCamm Morton, Owner of VR Business Brokers office in Baton Rouge, LA
The nine siblings that own the Hi Nabor supermarket chain founded in 1963 by their father, the late Sam Crifasi, have sold the business to their employees through an employee stock ownership plan. Terms of the deal were not disclosed but some 190 full-time employees will be eligible to participate in the ESOP, which will own 100% of the company.
Hi Nabor has three locations in Baton Rouge and estimated revenues in excess of $40 million. Employees were notified of the deal at a company gathering Sunday afternoon.
An ESOP is a qualified retirement plan, similar to a 401(k), that can be used as a business succession tool and as an employee ownership vehicle to provide employees with an ownership stake in the company. The ESOP buys, holds and sells company stock through a trust, providing employees with a retirement plan benefit and an additional form of compensation.
Hi Nabor CEO Jim Crifasi says the company’s leadership team has been engaged in succession planning for the past several years and initially thought the idea of an ESOP was “crazy.” But the more they learned about the plans, the more sense it made for the company’s future.
Taking the Necessary Steps: How VR Can Help Maximize Value
By JoAnn Lombardi, PresidentVR Business Brokers/Mergers & Acquisitions
Business owners face a myriad of challenges daily. One challenge no owner wants to grapple with is financial distress. But, if you have struggled with declining profits, rising costs, fierce competition, and other overwhelming problems for some time, and the situation does not seem to be improving, selling may be the best solution. There are steps VR M&A Advisors can assist with to maximize your business’s value.
Assessing Value
Deciding to sell your company is never easy. You have invested significant time and emotional energy in your business. But once you determine that selling is your best option, VR will help you begin the process by making a hard-liner assessment.
First, we will find out what your business is worth. A professional valuation gives you a basis for negotiating the sale price and terms with potential buyers. VR will review your financial statements and determine values for assets such as real estate and equipment.
We also can assess the value of your sales volume and determine whether it might be attractive to another company. Your intangible assets, such as people, knowledge, and intellectual property, can be just as important as tangible property; recognized brands, copyrights, trademarks, proprietary customer or client mailing lists, and long-term contracts all can have significant value. Values placed on intangible property, however, are likely to be scrutinized closely by potential buyers.
Once you understand your company’s market position, financial status, and strengths and weaknesses, you will have some idea of what you can expect from a sale.
Give Buyers What They Want
What is valued in the sale of a distressed company is usually different from what is considered in the sale of a stronger, more profitable company. If they are not simply looking to liquidate assets, buyers generally want to see the potential for improvement and signs that internal problems can be fixed relatively easily.
Has COVID Affected The Chances Of Selling Your Business?
by Ryan Jorden, VR Business Brokers - Managing Partner, Owner of VR Business Brokers in Calgary, Canada
When someone buys your small business, they are buying the future of your company. Short of time travel, this can best be understood and predicted by a thorough examination of the historical track record. Since the most recent is the most relevant, that largely consists of the past three to five years of financial statements, along with all supporting documentation for inventory, payroll, taxes, and the like. One thing that has always caused an issue with predicting the future cashflow of any small business is selling during or just after an aberrant year.
A specific business may experience an aberrant year if they lose a major client, a key staff member leaves, or the owner-operator experiences a health crisis. Several industries also experience abnormal years, such as bad hail years for the auto body shops, roofing companies & siding companies, cold winters for the battery & tire shops, and oil price fluctuations that affect a wide range of business such as fabrication shops, downtown consultants, and small-town hotels & restaurants. 
Larger than that are the significant regional interruptions to the predictable history of a business, such as floods, wildfires, droughts, cold snaps or hurricane years. While those are issues that affect only specific industries or specific locations, this past year has been very different. COVID has been a great equalizer, in that it’s affected everybody all at once. It’s also going to be on the books and in the history of every single business. That means it will be relevant from a purchaser and lender’s perspective for the next five years. 
Maximizes Returns for Insurance Investors
byRyan Downie, Axial
Large acquisitions steal the headlines — but do they produce the biggest returns for insurance investors?
While the potential for a home-run deal is understandably alluring to management and M&A teams alike, the success rate of these deals is relatively low among property and casualty (P&C) and life insurance carriers. Smaller acquisitions more frequently deliver superior returns, yet they are less frequently pursued because the incremental improvement from each deal isn’t considered worthwhile.
Programmatic M&A — serially and systematically executing a larger number of smaller deals — optimizes returns for insurance companies, reports McKinsey. This is especially relevant for PE firms under the current macroeconomic conditions. Publicly traded carriers are less likely to finance acquisitions with equity, because their valuations are lagging other industries. Meanwhile, thanks to low interest rates, mutual insurers and PE-backed carriers are as prepared as ever to acquire the right targets.
Insurance M&A strategy has been misguided
An estimated 60% of life and P&C carrier transactions over the past 15 years were executed primarily to increase scale, according to a McKinsey analysis of 250 North American deals. The implicit goal of such deals is to improve returns through operating leverage. However, other deal types actually delivered more value, according to McKinsey’s data. Smaller acquisitions provided roughly 4.5% higher excess returns for life and P&C insurers. This was derived primarily from product diversification and capability enhancement, whereas geographical expansion and scale gains actually dragged on results. Unsurprisingly, clear synergies and efficient integration are the most reliable ways to augment returns through a business combination. The data also reveals a massive gap in excess returns between the best and worst performers, underlining the importance of getting your M&A strategy right.
Online Senior Discount Store in Florida
COVID PROOF BUSINESS!! Very profitable online discount store, variety of product, mostly adult diapers to under pads, chux to booster pads, wipes to gloves, and even incontinence skin care, medical equipment, and medical supplies. They offer home health care products from manufacturers like Abena, Able-Life, Aloe Vesta, Covidien, Depend, Invacare, Bard, UroMed, Coloplast, Ensure, Boost, Carex, Lumex, ConvaTec, Drive Medical. Direct relationships with manufacturers, two 1 (800) numbers and three domains are included in the price. Company also has customer base that brings weekly-monthly recurring orders, total customers 11283 of which 986 are on re-order subscription and/or re occurring orders. Average customers spend 2k until they pass away or stop purchasing. Gross margins are at 30%. Amazon Store is also included with sale. 
For more information contact: Baris Guler at baris@vrbocaraton.com.
VR in Wyomissing, PA Sold a Traffic Control Flagger Business
This successful and dependable Traffic Control Flagger Business was a separately operated and independently profitable division of a larger traffic safety control company. The Flagger Business provided flagging services with experienced, American Traffic Safety Services Association (ATSSA) Certified Flaggers. With offices throughout Pennsylvania, this Flagger Business was able to promptly and professionally meet the needs of customers. The business was certified by the Pennsylvania Unified Certification program as a Disadvantaged Business Enterprise and Women-Owned Business Enterprise (DBE/WBE); and was an approved PennDOT Pre-Qualified Subcontractor and Supplier. These certifications and pre-qualified designations enabled the business to meet customer's DBE/WBE participation goals. 
Congratulations to Ray Melcher for your successful closing.
For more information contact: rmelcher@vrmarathon.com
Thinking of selling your business or looking for an established 
business to purchase?Contact a VR Office Near You!
Have You Ever Considered Selling Businesses?
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