First, the background: Presidio employs more than 2,000 IT professionals. BlueWater has been one of Cisco Systems' fastest-growing channel partners. And Foros apparently advised BlueWater on the sale to Presidio, The VAR Guy has heard from sources down the road from Wall Street.
For VARs and MSPs in the M&A market, a financial advisor can help on a range of M&A processes including:
- Preparing a "book" -- highlighting a company's business performance -- for potential buyers to review.
- Targeting a shortlist of potential suitors and making first contact to see if the potential buyers have interest in the seller. Often, the financial advisor will have direct-dial connections to C-level executives, including CEOs, CFOs and executive VPs of business development.
- Setting a company's proposed valuation based on current and future earnings projections, typically tied to an EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization).
- Assisting in M&A negotiations, which often include earn-out agreements, executive retainers, employment contracts, non-compete agreements and more.
On the small and midsize business (SMB) front, boutique advisors often assist smaller VARs and MSPs. Key names in the M&A advisor field include Cogent Growth Partners, Martin Wolf Securities, and Weaver and Associates (run by MSPAlliance President Charles Weaver), just to name a few.