Buying, Selling, and Valuing Financial Practices: The FP Transitions M&A Guide, + Website

August 2016 978-1-119-20737-5 Hardcover (320 pages)

David Grau, Sr.

John Wiley & Sons, Inc.

Buying, Selling, & Valuing Financial Practices shows you how to complete a sale or acquisition of a financial advisory practice and have both the buyer and seller walk away with the best possible terms. From the first pages of this unique book, buyers and sellers and merger partners will find detailed information that separately addresses each of their needs, issues and concerns.

From bestselling author and industry influencer David Grau Sr. JD, this masterful guide takes you from the important basics of valuation to the finer points of deal structuring, due diligence, and legal matters, with a depth of coverage and strategic guidance that puts you in another league when you enter the M&A space. Complete with valuable tools, worksheets, and checklists on a companion website, no other resource enables you to:

  • Master the concepts of value and valuation and take this issue “off the table” early in the negotiation process
  • Utilize advanced deal structuring techniques including seller and bank financing strategies
  • Understand how to acquire a book, practice or business based on how it was built, and what it is capable of delivering in the years to come
  • Navigate the complexities of this highly-regulated profession to achieve consistently great results whether buying, selling, or merging

Buying, Selling, & Valuing Financial Practices will ensure that you manage your M&A transaction properly and professionally, aided with the most powerful set of tools available anywhere in the industry, all designed to create a transaction where everyone wins—buyer, seller, and clients.

Categories: M&A valuations

Chapter 1 The Basics You Need to Know 


Avoiding the Critical Mistakes 

Valuation: The Great Debate 

Assessing What You Have Built (or Are Acquiring) 

Who Is Selling? Transition Strategies by Ownership Level 

Overcoming Attrition: Public Enemy No. 1 

What Is Being Sold? 

Organizing the Marketplace 

Exit Plans versus Succession Plans versus Continuity Plans 

The Planning Continuum 

Chapter 2 Value and Valuation Fundamentals 

An Overview 

What Creates Value? 

Standards of Value 

Valuation Approaches and Methods 

The Rule of Thumb Method of Valuation 

Application of Standards and Approaches 

Making Sense of It All 

Who Is Qualified? (to Offer an Opinion of Value) 

Valuations for Bank Financing 

Chapter 3 Solving Valuation 

The Blue Book Standard 

Lessons Learned 

A Value Calculation 

How It Works 

Recurring versus Nonrecurring Revenue 

Assessing Transition Risk 

Measuring Cash Flow Quality 

Fixing the Fracture Lines 

The Profitability Issue 

Chapter 4 Building and Preserving Value toward the End of Your Career 

1. Get a Position Fix 

2. Focus on the “M” in M&A 

3. Obtain a Formal, Third-Party Valuation 

4. Understand the Impact of Terms and Taxes on Value 

5. Consider Alternative Strategies: Sell and Stay Opportunities 

6. Study Reliable Benchmarking Data 

7. Create a Plan and a Definitive Timeline 

8. Have a Backup Plan 

9. Sell on the Way Up! 

10. Focus on You 

Chapter 5 Preparing to Sell 

What’s Your Plan? 

Finding the Very Best Match 

When to Sell: Timing That Final Step 

In a Nutshell: How to Sell Your Book, Practice, or Business 

The Listing Process 

Making a Quick Decision to Sell 

When Selling Isn’t Selling 

Ten Things Buyers Will Want to Know 

Handling Key Employees during the Selling/Listing Process 

Letting Go 

Chapter 6 The Buyer’s Perspective 

A New Direction 

If at First You Don’t Succeed 

Build a Base for Acquisition

What Sellers Will Want to Know 

Understanding the Audition Process 

Are You a Buyer or a Prospect? 

Nontraditional Acquisition Strategies 

Chapter 7 Deal Structuring: Payment Terms, Taxes, and Financing 

Seller Financing 

The Shared-Risk/Shared-Reward Concept 

Performance-Based Promissory Notes 

Earn-Out Arrangements 

Revenue Sharing or Fee Splitting Arrangements 

Earnest-Money Deposits 

Down Payments 

Basic Tax Strategies 

Installment Sales 

Asset-Based Sales/Acquisitions 

Stock-Based Sales/Acquisitions 

Bank Financing 

The Mechanics of the Process 

Blending Seller and Bank Financing Together 

Acceleration Options 

Working Capital Loans 

Chapter 8 Due Diligence and Documentation 

Conducting Due Diligence 

Assembling and Managing Your Team 

Advocacy versus Nonadvocacy Approach 

Documenting the Transaction 

Chapter 9 Key Legal Issues in the M&A Process 

What Exactly Is “Boilerplate”? 

Reps and Warranties 

Covenants and Conditions 

Indemnification and Hold Harmless Clauses 

Protections against Death or Disability 

Default Provisions 

Resolution of Conflicts 

Basic (but Not Trivial) Legal Issues 

Chapter 10 The Transition Plan 

Regulatory Issues 

Transferring Fee-Based Accounts 

Setting Up for the Post-Closing Transition 

E&O Insurance (Tail Coverage) 

Sample Client Letters 


Appendix: Sample Documents 

About the Author 

About the Website