BiggsKofford Continues Growth

New ImageBiggsKofford, one of the leading certified public accounting and business consulting firms in Colorado, announced today the promotion of Austin Buckett, ACA, to Director. Buckett joins Chris Blees, Kurt Kofford, Greg Gandy, Greg Papineau, Michael McDevitt and Deborah Helton on the team of Directors.

Before joining the BiggsKofford team, Buckett gained over 11 years of accounting experience working with clients in a variety of industries. He specializes in mergers, acquisitions, transactional support services and financial consulting. Graduating from Alton College in Hampshire, England, he holds an Association of Chartered Accountants designation and is a Certified Merger & Acquisition Advisor.

Buckett joined BiggsKofford in 2005 and worked as a mergers and acquisitions supervisor for the certified public accounting firm. In 2006, he was promoted to Manager and continued to dedicate his hard work and leadership skills to the firm.

“Austin consistently looks for ways to add value to our clients and to help them,” said Chris Blees, Managing Partner. “His experience has moved the firm and our clients forward, which is a great asset for everyone.”

Founded in 1982, Colorado Springs-based BiggsKofford currently employs more than 25 professionals. BiggsKofford offers integrated business solutions, including tax, accounting, merger and acquisitions consulting, business valuation and litigation support.

BiggsKofford has expanded its services to meet the changing needs of over 500 business owners and entrepreneurs in Colorado’s Front Range.

Media, contact Jenn Watton at (719) 579-9090 for more information.

(AICPA, By Kenneth Marks; Published August 2014)

For many Baby Boomers who are considering selling their companies in the coming years, a disappointing reality awaits: Their business is not  worth what they thought. Even in today’s hot merger and acquisition market, a  significant valuation gap exists between what many owners believe their  business is worth and what potential buyers are likely to pay.

This  gap has widened in recent years for a number of reasons.

  • First, low interest rates and moderate expected returns from  stocks and bonds have led owners to need greater proceeds from a sale, driving  their value ambitions higher.
  • Second, at a time when smart companies are investing in  growth and renewal, many owners have tightened their operational belts and  extracted cash. While this business strategy has short-term benefits, owners who  restrict their growth and pay themselves at the expense of losing competitive  ground can diminish the future value and opportunity of the enterprise.
  • Third, some businesses fail to generate economic returns in  excess of their true cost of capital. While this concept can seem academic, it  is the basic concept of value creation. While gaps have always existed between  what sellers want and what buyers are willing to pay, the current gap for  middle-market companies is wider than ever. Let’s focus on how to bridge it.

Back to basics

No  matter how strategic the buyer, all valuations eventually boil down to expected  future cash flow. The value of that cash flow is determined by its absolute  level, the risk of achieving the projected amount, and its growth rate coupled  with the future investment required to sustain it. In the traditional sales  process, buyers start by analyzing historical EBITDA as a proxy for cash  flow.

Bridging the gap

To  bridge the valuation gap, a company must shift the conversation from historical  financials to strategic value. It must demonstrate that it is acting on a  credible, forward-looking growth plan that can be leveraged by the buyer. A  company that can articulate and defend its potential, forecast its performance  into the future, and support that forecast with facts, trends, and action steps  can create a strong position from which to lead negotiations.

To establish a sound, strategic  approach for a sale, consider these two principles:

  • Know  thyself. Analyzing  and executing a successful exit strategy requires a hard look in the mirror. A company  must examine its business model and its relevance to the future. A deep understanding of a company’s value to the  market—including both customers and investors—allows the business owner to put  into place value-creating strategies that offer potential buyers a vision and a  plan for their investment. Remember, a buyer is an investor. Being able to  articulate and defend a growth strategy to a buyer means you must do your  homework and create well defined initiatives that serve as a road map for  continued growth in cash flow and relevance in the marketplace. Demonstrate  your company’s ability to forecast and manage its growth with empirical data  from existing customers and projects. Buyers often interpret predictability as less  risk and, therefore, higher value. The more accurately you can forecast your  business in revenues, margins, and EBITDA and the more clearly you can understand  and control the earnings drivers, the more successfully you can position your  business for a sale on your terms.
  • Know  thy place. Business owners who want to get more for their company  spend time developing solutions that add value to the market segment in which  they operate. They establish a deep sense of the market space and understand who  their competitors are, how their business models work, where they make money,  and where they don’t. They scrutinize data from market research and understand  the competitive landscape and trends. A clear read on how your business fits into the marketplace and how  your growth and strategy will transpire can also widen the pool of  possible “right” buyers. As opposed to a shotgun approach in a broad auction, studying  the defined industry segments that surround your business helps to identify outlying  candidates who may, in the end, see the most value.
    In one example, a niche grading and landscaping firm  took time to understand how each of its competitors engaged with the market and  to explore companies in tangential market segments. By doing so, it found a  strategic buyer that wanted to enter its market segment; a direct competitor  would not have perceived near the value or paid as much. In today’s  environment, a company is wise to optimize its strategic position by exploring partnerships  and alliances that validate its significance to the market, increase its growth  prospects, block competitors, or secure access to certain customers, supply, or  geographies.

Historical  financials validate a business’s ability to be profitable and management’s  ability to operate. By making a strong case for the company’s strategic value,  you give a potential buyer the basis to formulate and pay additional consideration.  By shifting the perspective and discussion from historical numbers to future cash  flow and growth opportunities, you create a productive way to structure a  transaction and monetize the intrinsic value of your business. More important,  you build potential value that a buyer can leverage to realize gains beyond the  near-term numbers.

BiggsKoffordbio-photo-chris-blees celebrates Chris Blees, managing director, who achieved 20 years with the organization this month.  In 2007, Blees was selected to replace founder Jerry Biggs by the firm’s five other partners.

Blees, 42, joined BiggsKofford after graduating from Western State College University in 1994 and has been a director since 1999.  He provides overall corporate leadership for the firm, as well as day-to-day management.  Blees also manages the firm’s merger, acquisition and sales practice.

“The past 20 years with BiggsKofford has been nothing short of remarkable,” said Blees. “I am honored to have such an outstanding team that is determined to maintain the exceptional standards the firm is known for. I look forward to the next 20 years!”

Founded in 1982, Colorado Springs-based BiggsKofford currently employs 30 people.  BiggsKofford offers integrated business solutions, including tax, accounting, merger and acquisitions consulting, business valuation and litigation support.  BiggsKofford has expanded its services to meet the changing needs of over 500 business owners and entrepreneurs in Colorado’s Front Range.

(The Gazette, By Rich Laden; Published March 3, 2014)

One of Colorado Springs’ oldest and most recognizable auto dealership groups  has changed hands – but won’t change its familiar name.

The Red Noland Auto Group, which N.B. “Red” Noland founded in 1974, has been  purchased by Mike Jorgensen and Thom Buckley, the auto group’s top executives  who have been operating Noland’s dealerships for 15 years.

The purchase includes Red Noland Cadillac, Red Noland Infiniti, Jaguar-Land  Rover Colorado Springs, Red Noland Pre-Owned Center and Red Noland Collision  Center.

Terms of the deal weren’t disclosed, but it also includes the auto group’s  roughly 15 acres in the Motor City auto park, along Motor City Drive, on  Colorado Springs’ west side.

Noland, Jorgensen and Buckley completed the deal at the end of last month,  which marked exactly 40 years since Noland came to Colorado Springs and, along  with a Dallas partner, bought what was then called Silver State Cadillac. At the  time, Noland had been with the Cadillac division of General Motors for 25 years,  worked as a Cadillac zone manager in Dallas and become familiar with Colorado  after spending time in the state skiing and flying gliders

BiggsKofford assisted both parties in reaching an agreement, and was glad to be a part of the significant transaction. We wish Red Noland continued success in the years ahead.

To read more, see the full article from the Gazette, here.

The Alliance of Mergers & Acquisition Advisors (AM&AA) just came out with deal stats from the last half of 2012. To check out the most up-to-date M&A activity, check out their survey results here.

Chris Blees

Chris Blees

President & CEO

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The Alliance of M&A Advisors and the CFO Alliance have cordially invited Chris Blees, CPA, CM&AA, to speak at The Middle Market: Our World of Opportunity in 2013 Conference to be held January 14-17 at the Hilton Miami Downtown.

Chris will be presenting on due diligence with Steve Ross, MCM Capital, and Aldy Keene, Loyalty Research Center.

The Alliance of Merger & Acquisition Advisors® (AM&AA) is the premiere International Organization serving the educational and resource needs of the middle market M&A profession.

BiggsKofford has worked with the AM&AA since the beginning of BiggsKofford’s Merger & Acquisition department, now BiggsKofford Capital, which is led by Chris Blees, BiggsKofford, P.C.’s President & CEO.

Chris Blees

Chris Blees

President & CEO

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Chris Blees, BiggsKofford’s CEO, wrote an article that was recently featured on portfolio.com and is geared towards business owners who are preparing to exit their business.  

Check out the article here

If you have questions about selling your business or building value to sell it in the future, feel free to e-mail Chris here.

Austin Buckett

Austin Buckett

Manager

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Every year brings about new expectations and hopes for the coming year, especially as it relates to the economy and business performance.  Given the past three to four years, it is about time we had something to look forward to. 

I recently attended the annual AM&AA winter conference to see what others in the M&A market had experienced in 2011 and were anticipating for the coming year as we roll into 2012.

The conference itself is attended by people from all over the country that work in the M&A middle market, defined as working with companies valued between $5m – $250m.  The attendees are comprised of Investment Bankers, Private Equity Groups, Attorneys and Advisors.

The overall theme of the conference for this year was ‘culture’.  In particular, the role a company’s culture plays into the success of a transaction and the valuation it attracts.  In summary, those with great cultures that are ready for a sale and can be easily handed over to a new owner will generate the most interest from a buyer.  Those that do not have good cultures or team members with good work ethics will likely be passed over from a buyer perspective or heavily devalued as buyers are becoming more aware and more sophisticated on the cost of trying to overcome cultural issues with new acquisitions.

 Below is a summary of the discussions and expectations noted during the conference:

  • 2011 Performance:
    • Deals done in 2011 were on a par with 2010.  While we are a long way from the highs of 2006 and 2007, it is encouraging to see deal activity stabilize and not retreat to pre 2010 levels.
    • Average deal valuation multiples remained constant in the $10m – $25m deal size range at 5.3 x EBITDA.  However, there was an increase in the overall middle market (deal sizes up to $250m) valuation multiples driven by deals north of $100m in deal value.
    • Debt multiples, the amount of purchase prices funded by debt, increased slightly.  Again this was at the larger deal level and was one of the reasons for increased valuations overall.
  • As we head into 2012, it is encouraging to see the larger end of the middle market generating increasing value and bank lending easing up on.  While this has yet to benefit the smaller end of the market, it is a good leading indicator and we expect these trends to continue moving downstream into 2012 and 2013.
  • Private Equity funds are still struggling to find quality deals they can invest in.  There is currently an estimated $450bn of private equity money that has not yet been deployed and many funds have moved downstream to look at smaller business, even those with EBIDTA of $1m are now getting interest from Private Equity Groups. We expect that Private Equity will continue this trend for the next few years as they try to put their money to work and justify raising additional funds in the future.

So is now the time to sell?  For most of our clients, we have yet to see a real uptick in the deal market that they would fall into and we anticipate the market improving over the next 12-24 months.  Therefore, we anticipate sellers being in a better market position towards the end of 2012 and into 2013.  However, given the buyers significant preference for well run companies we strongly advise anyone who is considering an exit in the next 3 – 5 years to really focus on internal improvements to make their business more attractive to a buyer.  

If you have any questions or would like more information on this subject please contact me at (719) 640-0831.