Manufacturing Today - September/October 2016 - 14

* Understand structure and tax impact - Are all offers created equally? Absolutely not! In addition to
focusing on the gross consideration
(i.e., purchase price), business owners and their advisors must consider
items such as the type of acquisition
(stock vs. asset), form of consideration (cash, seller's note, earn-out,
14

manufacturing-today.com SEPTEMBER/OCTOBER 2016

SPACE TECH EXPO

SERVICE

S U S TA I N A B I L I T Y

L E A N

C ANADA MANUFACTURING

AH
S R EXPO 2016

P RO F I TA B I L I T Y

N EWS

T ECHNOLOGY

C ONTENTS

D IALOGUE

* Understand your company's position in the business cycle - Apart
from industry-specific growth and
individual company attributes such
as customer concentration, gross
margins, and top-line growth, the
overall business cycle plays a key role
in determining the enterprise value
of a business. Most buyers will want
to see that management has been
operating a company at a relatively
higher level of earnings for a year
or two before the sale, as acquirers
tend to discredit "hockey stick" projections. In addition, the business
owner should be able to make the
case that this elevated level of sales
and earnings should be expected to
continue for the foreseeable future,
which can be done by tying top-line
projections to the company's order
book or linking sales projections to
forecasted volumes, as is common
in the automotive industry.

E MPLOYEES

S U P P LY C H A I N

M ANAGEMENT

agreements, insurance policies, employee benefit plans, and collective
bargaining agreements). Importantly, a certain level of "reverse due
diligence" must be performed on
this documentation prior to supplying to the acquirer, and any inconsistencies, inaccuracies or undue delay
in producing requested data may
lead to the acquirer putting the deal
on hold, reducing the purchase price
or even ultimately walking away
from the deal.

M A N U FA C T U R I N G

COLUMN BY | AARON WITALEC

etc.), working capital adjustments,
escrows, caps and baskets, indemnification provisions, representations and warranties. If improperly
structured, an apparently great cash
offer could subject the business
owner to significant and unexpected
post-closing tax and legal liabilities.
* Maintain your focus - Many business owners who go through the
process of selling their company feel
as though it is a second job due to the
amount of time and effort involved.
Because of this, oftentimes the management team loses focus and financial and other operational metrics
slip. Nothing is more damaging to a
sale process than a company's failure to meet projected performance.
The importance of hiring a qualified
investment banker cannot be under-

stated because it is their responsibility to carry the load of moving the
transaction forward.
Each transaction is unique and
presents its own distinct set of circumstances. However, good companies can become highly sought-after
opportunities by both private equity and strategic buyers by following
these guidelines. mt
Aaron Witalec is managing director of UHY Advi-

sors Corporate Finance, and specializes in sell-side
investment banking and buy-side advisory services
for strategic and private equity clients engaged in acquisitions, divestitures, restructuring, private capital
raising and venture capital. He has more than 15 years
of investment banking experience and has advised
on over 200 domestic and cross-border transactions
ranging in value from $25 million to $2 billion across
a broad range of industries. He was named as the
winner of M&A Advisor's Emerging Leader Award for
2016 and was lead advisor on Crain's ACG "Deal of the
Year" in 2015. Aaron can be reached at 313-324-7145 or
by email at Awitalec@uhy-us.com.


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Table of Contents for the Digital Edition of Manufacturing Today - September/October 2016

Contents
Manufacturing Today - September/October 2016 - Cover1
Manufacturing Today - September/October 2016 - Cover2
Manufacturing Today - September/October 2016 - 1
Manufacturing Today - September/October 2016 - 2
Manufacturing Today - September/October 2016 - Contents
Manufacturing Today - September/October 2016 - 4
Manufacturing Today - September/October 2016 - 5
Manufacturing Today - September/October 2016 - 6
Manufacturing Today - September/October 2016 - 7
Manufacturing Today - September/October 2016 - 8
Manufacturing Today - September/October 2016 - 9
Manufacturing Today - September/October 2016 - 10
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Manufacturing Today - September/October 2016 - 19
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Manufacturing Today - September/October 2016 - 89
Manufacturing Today - September/October 2016 - 90
Manufacturing Today - September/October 2016 - 91
Manufacturing Today - September/October 2016 - 92
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Manufacturing Today - September/October 2016 - 94
Manufacturing Today - September/October 2016 - 95
Manufacturing Today - September/October 2016 - 96
Manufacturing Today - September/October 2016 - 97
Manufacturing Today - September/October 2016 - 98
Manufacturing Today - September/October 2016 - 99
Manufacturing Today - September/October 2016 - 100
Manufacturing Today - September/October 2016 - 101
Manufacturing Today - September/October 2016 - 102
Manufacturing Today - September/October 2016 - 103
Manufacturing Today - September/October 2016 - 104
Manufacturing Today - September/October 2016 - 105
Manufacturing Today - September/October 2016 - 106
Manufacturing Today - September/October 2016 - 107
Manufacturing Today - September/October 2016 - 108
Manufacturing Today - September/October 2016 - 109
Manufacturing Today - September/October 2016 - 110
Manufacturing Today - September/October 2016 - 111
Manufacturing Today - September/October 2016 - 112
Manufacturing Today - September/October 2016 - 113
Manufacturing Today - September/October 2016 - 114
Manufacturing Today - September/October 2016 - 115
Manufacturing Today - September/October 2016 - 116
Manufacturing Today - September/October 2016 - 117
Manufacturing Today - September/October 2016 - 118
Manufacturing Today - September/October 2016 - 119
Manufacturing Today - September/October 2016 - 120
Manufacturing Today - September/October 2016 - 121
Manufacturing Today - September/October 2016 - 122
Manufacturing Today - September/October 2016 - 123
Manufacturing Today - September/October 2016 - 124
Manufacturing Today - September/October 2016 - 125
Manufacturing Today - September/October 2016 - 126
Manufacturing Today - September/October 2016 - 127
Manufacturing Today - September/October 2016 - 128
Manufacturing Today - September/October 2016 - 129
Manufacturing Today - September/October 2016 - 130
Manufacturing Today - September/October 2016 - 131
Manufacturing Today - September/October 2016 - 132
Manufacturing Today - September/October 2016 - 133
Manufacturing Today - September/October 2016 - 134
Manufacturing Today - September/October 2016 - 135
Manufacturing Today - September/October 2016 - 136
Manufacturing Today - September/October 2016 - 137
Manufacturing Today - September/October 2016 - 138
Manufacturing Today - September/October 2016 - 139
Manufacturing Today - September/October 2016 - 140
Manufacturing Today - September/October 2016 - 141
Manufacturing Today - September/October 2016 - 142
Manufacturing Today - September/October 2016 - 143
Manufacturing Today - September/October 2016 - 144
Manufacturing Today - September/October 2016 - 145
Manufacturing Today - September/October 2016 - 146
Manufacturing Today - September/October 2016 - 147
Manufacturing Today - September/October 2016 - 148
Manufacturing Today - September/October 2016 - 149
Manufacturing Today - September/October 2016 - 150
Manufacturing Today - September/October 2016 - 151
Manufacturing Today - September/October 2016 - 152
Manufacturing Today - September/October 2016 - 153
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Manufacturing Today - September/October 2016 - 155
Manufacturing Today - September/October 2016 - 156
Manufacturing Today - September/October 2016 - 157
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Manufacturing Today - September/October 2016 - 164
Manufacturing Today - September/October 2016 - 165
Manufacturing Today - September/October 2016 - 166
Manufacturing Today - September/October 2016 - 167
Manufacturing Today - September/October 2016 - 168
Manufacturing Today - September/October 2016 - Cover3
Manufacturing Today - September/October 2016 - Cover4
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