Frequently Asked Questions

A collection of some of the more common questions people ask us.

No, Cafa does not lend or invest money.

As an independent investment banker, Cafa acts solely as an intermediary to facilitate your company obtaining the best-suited financing it requires without any conflicts of interest. We typically arrange funding from $5 million upwards. You can contact us to assess your needs, whether for project financing, debt financing or equity financing. Here are some of our newsletters related to financing:

Depending on your industry and the size of your business, there are many go-to-market strategies to prepare your business for sale and maximize your value. The first step would be to reach out to an investment banker, who will be able to provide an initial valuation range and go-to-market strategy for your business. Look at our “The Investment Banker …the benefits of using one…” and “The Process of Selling Your Business” newsletters to prepare prior to your first meeting. Then, contact us here.

We’ve successfully executed many Management Buyouts (“MBOs”). Oftentimes at the onset, neither the company owners nor the employees actually believe the transaction is possible. Although each situation has its own challenges, an experienced advisor can help you realize your goal. See our Newsletters on the “Key Elements for a Successful Management Buyout” and their takeaways. Please contact us if you’d like to discuss the feasibility of your MBO project. And if you’re a company owner interested in selling to your employees, we can help you orchestrate that too.

In order to find the best possible business, you must proactively seek out your acquisition target based on your predefined criteria. An M&A professional will help you best define these criteria and will set about to search for your target. Although some brokers may have lists of businesses for sale, these are usually very small businesses and they rarely meet all your criteria. Professional advisors like Cafa will identify all the businesses that fit your criteria regardless of whether they are for sale or not. In our experience, the best business to acquire is not actively on the market.

Please read our “Outsourcing Your Corporate Development Department” or our “Finding an Acquisition Target” newsletters. Contact us to see how we can help.

Although there are many ways to value a business, the most common method in M&A transactions is the EBITDA multiple approach as discussed in our “What is your business’s worth?” newsletter. EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) is most often “normalized” to “reveal the true value of your business”. If you would like a preliminary assessment of your company free of charge, please contact us.

If you have any questions on the role of the advisory committee and how it should be set up to successfully contribute to the growth and development of an organization, you can read our newsletter entitled “Advisory Committees for Small & Medium Enterprises“. Or if you like to benefit of our experience as a member of advisory committees, please contact us.

In an M&A transaction, the vendor must typically indemnify the buyer for any violations of the representations and warranties made in the sale transaction. We have seen increasingly widespread use of rep. and warranties insurance in M&A transactions. If you would like to understand the benefit and cost of such insurance, you can read our newsletter entitled “Representations and Warranties Insurance in M&A Transactions”  or contact us.

You’ve decided to sell your business and may now be wondering who your best buyer might be. Our newsletter “Finding the Right Buyer for Your Company” summarizes the different types of potential buyers, their basic characteristics and motivations and the related implications for you in terms of risk to a successful closing. If you would like to discuss how we can help you find the right buyer, please contact us.

When a business is bought or sold, it is understood that the assets and certain liabilities shall include a minimum amount working capital at closing. Our newsletter “Minimum Net Working Capital Threshold in M&A Transactions” will shed some light on the elements to be included as part of the working capital calculation. If you would like to understand how to establish the right amount of Minimum Working Capital to be delivered as part of a sale transaction and how it affects the purchase price, please contact us.

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