FAQ About Selling

What is a Merger?
A merger occurs when one corporation is combined with and disappears (or merged) into another corporation. All mergers are statutory mergers, since all mergers occur as specific formal transactions in accordance with the laws, or statutes, of the states where the companies are incorporated. The post-transaction operations or control of a company has no relevance on whether a merger has occurred or not.

What is an Acquisition?
An Acquisition is the process wherein the stock or assets of a corporation are acquired by a purchaser. The transaction may take the form of a stock purchase or an asset purchase.

What's the difference between a Merger and an Acquisition?
An Acquisition is the generic term used to describe a transfer of ownership. Merger is a distinctive, technical term of a particular legal procedure occurring after an acquisition.

What is a Leveraged Buyout?
A Leveraged Buyout (LBO) is a transaction whereby a company's stock or assets are purchased largely with borrowed money, resulting in a new capital structure consisting of a high percentage of debt secured by the assets of the acquired entity.

What is an Earnout?
An Earnout is a method of compensating a seller based on the future earnings of a company. It is the contingent portion of the purchase price. A common type of earnout provides for additional payments to a seller if the earnings exceed agreed-upon levels. Another type of earnout may provide that certain debt given to the seller as part of the acquisition price be paid out early if earnings exceed agreed-upon levels.

What are the different forms of transactions?
There a three general types of transactions in the acquisition of a business; Asset Purchase, Stock Purchase and Merger.

What is an Asset Transaction?
The acquired company transfers the assets of the business to the purchaser. These could include equipment, inventory and real estate, as well as intangible assets such as contract rights, leases, copyrights, patents, trademarks, etc. The acquired company executes the specific types of documents necessary to transfer the assets, such as deeds, bills of sale, and assignments. This type of transaction generally contains tax attributes favorable to the buyer.

What is a Stock Transaction?
The seller transfers the shares in the acquired corporation to the purchaser in exchange for an agreed-upon payment. A Stock Transaction is appropriate when tax costs, risk considerations or other issues surrounding an asset transaction can make a Stock Sale more appealing to the parties.

When is the best time to sell my business?
The best time to sell is when a business is doing well. It's best not to wait until after a business has peaked; the selling price will suffer. However, almost any business can be sold, even if it is not doing well, if the sale is handled professionally and positioned correctly.

How much is my business worth?
A company's value depends on many factors such as cash flow, asset values, financial history, condition of equipment and premises, occupancy issues, competition, and the capital markets. By analyzing your business and your industry, VR can advise you on the proper pricing parameters and market strategy for your business.

Why not sell the business myself?
Most owners find that the frustration, expense and time involved do not yield cost savings and many end up working with unqualified buyers. In fact, because they do not have access to a large number of qualified buyers, many owners end up selling their business for much less than they could have received by working with a well-established Intermediary. Plus, owners find it difficult to work directly with buyers while maintaining confidentiality. Selling a business is a specialized trade. Seek professional assistance when it comes to selling an asset as valuable as your business.

Why VR M&A?
VR M&A fills the void that exists between general business brokerage and the investment banking community. Specializing in transactions valued between 2 and 25 million dollars, VR M&A provides it clients with access to a network of highly trained professionals that have the resources required in this very specialized market. VR Mergers & Acquisitions has forged strategic alliances with the world's top investment banking firms and private equity groups, enabling us to provide our clients access to a lucrative network of active, qualified, and professional buyers worldwide.

When working with VR you receive the following and much more: