Implications of Earnouts when you sell your business – Tax Focus

First, a couple of thoughts on earnouts when you sell your business. While an earnouts is often seen as a mechanism to defer payment of the purchase price; if used correctly, it should in fact be consideration to the seller of a company over and above full cash paid at closing. Earnouts should not be considered part of the purchase price if/until they materialize and are paid to the seller, but why not set additional opportunities to increase the purchase price paid, over and above the full cash price paid? If “x” is the maximum that a buyer will pay for a company in cash at closing, it is still possible to negotiate “x” at closing, plus an additional 25-50% or more after closing. As with most things in life and business, it is not the tool that is at fault, it is the way that it can be misused and misunderstood.

When should you sign a Letter of Intent – Business Buyer vs. Business Seller?

One purpose of a LOI is to document a mutual agreement between the buyer and seller on the major points of the purchase and sale of a business. With this in mind, a LOI is often signed much too early in the process. There is an understandable eagerness if you are selling a business to receive a Letter of Intent from a prospective buyer as early as possible. In some cases, business owners are even advised that they should request a LOI in order to learn price and terms from the prospective buyer.

Mergers & Acquisitions Report and Outlook Q1 2025

In 2024, the U.S. mergers and acquisitions (M&A) landscape experienced a notable resurgence, setting the stage for continued growth in 2025. Deal Volume and Value: Through September 2024, both private equity and corporate M&A deal volumes increased by 17% year-to-date compared to the prior year. Despite this uptick, momentum decelerated later in the year due to elevated uncertainty, in part related to the outcome of the presidential election. In 2025, consensus among analysts is for a ...

O.E.M. MANUFACTURING AND SALES acquired by a Strategic Buyer

OEM manufactures and supplies components and sub-assemblies to vendors of many of the world’s largest brand name original equipment manufacturers. The Strategic Buyer is a U.S. manufacturer and supplier with over 50 locations across the United States. The Strategic Buyer determined there was a strong fit with their strategic growth goals and the opportunity to capture OEM’s customer base, their manufacturing relationships in SE Asia and further expand operations through OEM’s foreign trade zone. OEM engaged ClearRidge to advise on acquisition strategy, manage the sale process and due diligence.
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Mergers & Acquisitions Report and Outlook for Fall/Winter 2024

The first half of 2024 demonstrated a dynamic landscape for mergers and acquisitions (M&A) in the United States. Despite macroeconomic uncertainties, including the interest rate environment and inflationary pressures, strategic consolidations gained momentum, driven by factors such as technological advancement, supply chain optimization, and market expansion. The first half of 2024 recorded ...
Mergers & Acquisitions Report

Heater Specialists Acquires ParFab Industries

Heater Specialists, a fully integrated single-source manufacturer of refinery and petrochemical equipment, acquired the fabrication business of ParFab Industries in Inola, Oklahoma. ParFab Industries is a wholly owned subsidiary of the ParFab group of companies. HSI is a wholly owned subsidiary of Energy Process Technologies, Inc. (“EPTI”). ClearRidge advises EPTI and HSI's Management team and Board on acquisition strategy. In this acquisition, the ClearRidge team advised on financial and business matters, managed the process and due diligence.
Heater Specialists Acquires ParFab Industries

Window Technology, Inc (WinTech) acquires Pocahontas Aluminum Company

WinTech, a leading US manufacturer and supplier to the construction industry has acquired 100% of the stock of Pocahontas Aluminum Company, a window and door manufacturer based in Pocahontas, Arkansas. ClearRidge advises WinTech’s Senior Management team and Board on acquisition strategy. In this acquisition, the ClearRidge team advised on financial and business matters, managed the process and due diligence. Click through for more information on the acquisition.
WinTech Pocahontas Acquisition

Mergers & Acquisitions Report, News and Outlook for Q1 2024

In the central region of the United States, M&A activity has remained robust, but across the broader United States, activity was muted in the first half of 2023, picking up through the remainder of the year. Looking ahead to 2024, two factors that will likely bring greater activity: i) stabilizing interest rates contribute to higher valuations and/or higher activity, and ii) consolidation trends in many industries. For the first time in ...
Q1 2024 Outlook Mergers Acquisitions

Mergers & Acquisitions Report, News and Outlook – ClearRidge Quarterly Update

2023 has been a stronger year for M&A than many were expecting. At the same time, different industry sectors have registered greater disparity in valuations, deal activity and deal volumes than we typically see. We continue to have strong demand for acquisitions and more clients bringing businesses to market than in a typical year. This may be isolated to Oklahoma, Texas, and the Midwest, but our feel for M&A is …
Mergers & Acquisitions Report

Innovex has acquired a minority interest in Downhole Well Solutions (DWS)

DWS (www.downholewellsolutions.com) designs, manufactures, and rents proprietary downhole drilling optimization tools, including the PowerGLIDE oscillation tool, the RIPstick anti-stall and anti-stick slip tool, and most recently the new PileDRIVER. DWS engaged ClearRidge to advise them on acquisition strategy.  The ClearRidge team managed the process and due diligence. DWS will continue to operate as a standalone business under the leadership and majority ownership of ...
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