Professional Documents
Culture Documents
Apparel and Textile Webinar
Apparel and Textile Webinar
June 9, 2010
Marc Federbush is an accounting and audit partner at Anchin, Block & Anchin with
over 20 years of experience. As chair of the firm
firm’ss Apparel, Textile, Diamond &
Jewelry Services Group he provides accounting, business, and financial services
to companies in the industry. His clients range from aggressive, growing
companies to well-established companies. His knowledge of the business,
accounting and tax practices of the industry makes him a sought after resource.
Marc has assisted many clients in business planning and analysis, mergers and
acquisitions, and sales of companies. He routinely consults to businesses and
their owners, advises individuals and businesses on federal and state tax matters,
and works with individuals and their advisors on estate planning matters. He has
directed due diligence services in connection with the acquisition of manufacturers
and distributors and formulated the related tax strategies
strategies. Marc is a member of the
American Institute of Certified Public Accountants (AICPA) and the New York
State Society of Certified Public Accountants (NYSSCPA). Marc is Series 7, 24,
and 66 FINRA registered.
marc.federbush@anchin.com
@
Key Anchin Capital Advisors LLC Team Members:
S l Lipshitz,
Sol Li hit CPA
Executive Director of Anchin Capital
Sol is a partner Anchin, Block & Anchin LLP and the Executive Director of
Anchin Capital. Sol has more than 25 years of experience and has been
i
involved
l d in
i more than
h 100 M&A transactions. i Th
Throughout
h hi career, Sol
his S l has
h
assisted clients through the intricate transaction process of either buying
another business or selling all or part of their existing business. In many
instances, he has assisted clients through multiple mergers and/or
acquisitions. He takes an in-depth look at the "big picture" of the transaction,
not only from a financial point of view, view but from an operational and
management point of view, as well. He knows that in the case of a merger, not
only must the numbers work, but the management philosophy, style and
method of the operations must match as well. A recognized leader in the
merger and acquisition field, Sol has addressed numerous bankers, attorneys,
and business and p professional organizations
g on issues affecting
g mergers
g and
acquisitions, including company strategies and shareholder and family
relationships. Sol is Series 7 and 66 FINRA registered.
sol.lipshitz@anchin.com
Key Anchin Capital Advisors LLC Team Members:
kuldeepak.acharya@anchin.com
Key Anchin Capital Advisors LLC Team Members:
Mi h l Luchinsky,
Michael L hi k MBA
Senior Director of Anchin Capital
michael.luchinsky@anchin.com
A. Industry overview and reasons to consider a sale:
1. Cash Out on Value
2 Difficulty in Obtaining Appropriate Financing
2. Difficulty in Obtaining Appropriate Financing
3. Inability to Attract Investment Capital to Grow
4. No Family Succession
5. Size of Business Matters
1. Cash Out on Value
a. Strategic buyer interest
b. Brand, customers, talent pool, diversify product
category
category
2. Financing Issues
a. Banks/Factors have tightened lending formulas
3. Investment Capital
a. Difficult to obtain for apparel & textile industry
(volatility)
b Give up substantial ownership
b. Give up substantial ownership
4. Family Succession
a. Tough industry
b. Risk value of business
5. Size of Business Matters
a. Size of business is important to be competitive
b. Need to grow to have better chance for success
c Retailer consolidation and their relationship with
c. Retailer consolidation and their relationship with
vendors
B. Mechanisms for Selling Your Company:
1. Hire an Investment Banker
2. Do Your own Active Search
3 Going it Alone Vs. Using a Professional
3. Going it Alone Vs Using a Professional
4. Conduct Passive Search: Get the word out
1. Hire an Investment Banker
Hire an Investment Banker
a. Position companies for a sale
b Find potential buyers
b. Fi d t ti l b
c. Design and implement a very specific strategy to meet
owners’ objectives
2. Do Your Own Active Search
2. Do Your Own Active Search
a. Conduct your own research to find potential buyers
b Search conducted concurrently with running the
b. Search cond cted conc rrentl ith r nning the
business
c. Negotiate with potential buyers
3. Going it alone Vs. using a professional
3 Going it alone Vs using a professional
Buyers on their own
2%
With a rookie broker 2%
Experienced broker 5%
Intermediary
Intermediary 17%
Exceptional intermediaries 50%
Investment Banker +90%
Source: Burbank Group
Going it alone Vs using a professional (continued)
Going it alone Vs. using a professional
a. Experience negotiating deals
b Cost of engagement
b. C f
c. Opportunity cost of going it alone
4. Conduct Passive Search: Get the word out
Conduct Passive Search: Get the word out
a. Let your bankers, accountants whomever else you
deal with know that your company is for sale
deal with know that your company is for sale
b. Functional issues of making a deal work
c. Effectiveness
C. Requirements for a successful transaction:
1. Commitment to Process
2. Realistic Goals
3 Cleanup Balance Sheet and Income Statement
3. Cleanup Balance Sheet and Income Statement
4. Identify Deal Issues in Advance
5. Buyer Integration Issues
1. Commitment to process
a. Internal and external team
b. All owners on board
2. Realistic goals
a. Timetable
b. Price range of valuation
c Tax impact
c. Tax impact
3. Cleanup balance sheet and income statement
a. Presentation
b. Non‐performing divisions, brands
c. Bad assets evaluation
4. Identify deal issues in advance
y
a. Customers
b
b. Employees
Employees
c. Legal
d. Financial Reporting
5. Buyer integration issues
a. Financial
b. Operational
c. Human Resources
D. How to position your company for sale:
1. Planning
2. Positioning
3. Family/Ownership Issues
4. Minority/Majority
5
5. Operations
Operations
1. Planning
a. Develop process
b. Discuss objectives
c. Timing
2. Positioning
a. Improve reporting and financials
b. Restructure operations if needed
c. Determine best type of buyer
d. Clean up legal issues, if possible
e
e. Get consensus on commitment from owners
f. Line up key executives support
g. Determine costs that are not true business costs
h
h. D fi value
Define l off bbusiness
i
3. Family/Ownership Issues
a. Consensus exists
b. Talented versus not talented employees
c. No excess baggage
d. Estate / family planning
4. Minority/Majority
a. What are objectives
b. Sale of majority
1) Loss of control (but may not be so bad)
2) Maintain % for future growth
3) Only way to make a deal
4) Ability to grow with less risk
5) Keep younger generation employed
6) Favored by private equity
Favored by private equity
4. Minority/Majority
c. Sale of minority
a. Maintain control but not as it seems
b. Provides initial liquidity event
c. Get a partner to support growth
d
d. Need to find right partner interested
Need to find right partner interested
e. Future sale controlled by minority owner
5. Operations
a. Clean up
g
b. Zero based budgeting g analysis
y
c. Eliminate divisions / products that are drag on
profits
Questions?