Divestiture Services

What's special about JR/Janus' divestiture support?


  1. We get top value for our clients; our reputation proves it. We have the resources, both Domestic and via over 400 colleagues in 42 M&A International offices in 38 countries around the globe, to identify buyers in many cases unknown to our client at the outset. We aim to identify those buyers willing to recognize the full value of the business.

  2. We have the business experience to ensure the divestiture plan is realistic, including realizing our client's value and non-financial goals, - or we recommend against proceeding. Failure is too risky to be an option.

  3. As external advisors, we are able to preserve confidentiality better than if the process were to be managed "in-house".

  4. We don't get sidetracked by "daily operating crises". Management is thus able to focus on the continued success of their business, at this most critical time.

  5. We are relationship driven. Our commitment is to do what's right for our client. Satisfied clients tell their friends.

The JR/Janus approach is proven…


Our practical, effective divestiture program includes:


Pre-sale planning


Our first priority is to develop a thorough and strategic understanding of all aspects of your business. Sometimes we can identify simple and quickly implemented improvements to significantly increase value. On occasion, when deficiencies are felt to seriously detract from value and necessary improvements prove to be more far reaching and time consuming, we will recommend delaying the divestiture process.

What is it worth?


We approach the financial aspects of business valuation from two perspectives - market norms and financial valuation. We consider multiples of EBITDA, EBIT and Book Value; and the goodwill component relative to similar companies, and recent transactions. We construct a range of value, making adjustments for private versus public values.

We employ the Discounted Cash Flow approach. We examine historic and when appropriate, projected income statements for the overall business and major product lines. We consider the cash flow analysis on a stand-alone basis, and also as if the business were in the hands of a full synergy buyer who would be in a position to create immediate opportunities, cut costs, and thereby capture a significant portion of the gross margin as profit.

Beyond the numbers…


Every buyer puts a great deal of emphasis on the strategic factors. We work closely with the seller to present a clear understanding of the market, competition, the focus of the business, and any proprietary advantages including technology, customer relationships, intellectual property, as well as human and physical resources.

What is for sale?


We prepare a Confidential Information Memorandum for prospective purchasers, including:
  • Business Background - Start up and Ownership

  • Current Market Position

  • Market and Competitive Data

  • Customer Base

  • Facilities and Equipment

  • Staff

  • Financial Summary

Who is likely to want the business?


In the past, the buyer to whom the business would have maximum value was most often the full-synergy buyer. While this is still true in many cases, today financial buyers, particularly Private Equity firms, may be induced to pay even more. The overhang of investment capital is substantial. We tap our clients' knowledge, our own domestic knowledge and research capabilities and the M&A International network to identify participants directly involved in the subject industry, in related fields,and financial buyers. In today's shrinking global and world trade environment, the right buyer is as likely to be across the ocean as around the block.

With our client, we balance the desirability of casting a wide net with the need to preserve confidentiality. However, we know that ideally we will create competition amongst buyers.

What information do potential buyers receive?


Prospective buyers will receive a general description of the opportunity. To proceed further, each must execute a Confidentiality Agreement and provide evidence of financial capability to receive the Confidential Information Memorandum.

Working closely with our client, we answer questions from potential buyers. Information of a proprietary or highly competitive nature may be withheld, but to the degree possible, we provide what each buyer requires to facilitate their valuation.

What are the most favourable terms that can be negotiated on behalf of the vendor?


Our clients will attest to the excellent results we have achieved as front-line negotiators on their behalf. Obtaining the maximum price is no doubt the most critical accomplishment. However, the terms of payment and any residual contingent liabilities that can come back at our client are matters of extreme importance. Sometimes non-financial factors are critical to the vendor. We measure success based upon our ability to deliver the best overall package.

What else, if anything, must be done to close the deal?


Murphy (of Murphy's Law fame) always visits a number of times during a transaction, but seems particularly close at hand when Closing approaches. We work with the principals to develop a Term Sheet outlining the business agreement which is signed-off by both vendor and purchaser, and can be provided to legal counsel. We co-ordinate internal and external professional resources such as financing, legal, accounting, environmental and tax, if and as required. We have proven administrative systems to make sure things stay on track, and to the extent possible, pre-empt Murphy.

Acquisition Services

What's special about JR/Janus' customized acquisition support?


  1. We have the business experience to confirm or help develop a realistic strategic action plan.

  2. We work fulltime at finding you the right mid-market acquisition (we're never side-tracked by "daily operating crises".)

  3. Via our own research and our M&A International network, we often find the not-so-obvious opportunities which are not overtly for sale, and thereby avoid the auction process.

  4. Our commitment is to build long-term relationships which allow us to effectively service our clients' requirements on a continuing basis.

The JR/Janus approach is proven…


  1. Determine and/or confirm acquisition strategy and criteria.

  2. Conduct pro-active search.

  3. Valuation and evaluation.

  4. Negotiation.

  5. Support/co-ordinate due diligence.

We have been providing strategic support to businesses pursuing growth through acquisition for over 30 years. We have a practical, effective program covering five stages:

We maintain close contact with our client at each stage to ensure that the program remains on track.

Determine and/or confirm acquisition strategy and criteria


An acquisition program must be an outgrowth of the corporate strategy or it is doomed to failure. A realistic assessment and understanding of corporate capabilities - strengths and weaknesses - is imperative, as is an objective assessment of the opportunities and challenges in the current and potentially new markets.

We have extensive experience working with independent owners and senior corporate officers and corporate development resources from a broad cross section of companies, large and small, simple and complex. We help them develop or fine-tune meaningful business growth strategies.

Good acquisition criteria will determine whether a company is a good "fit":
  • Dynamics of the industry

  • Size of investment

  • Predictability of revenue & profit

  • CAP-X required

  • Competitive position

  • Staff competence

  • Potential impact of technology

  • Tangible asset values

Pro-active search, not simply looking for "For Sale" signs…


In addition to businesses that are "for sale" and fit the criteria, we also focus on a second universe-businesses that are not for sale. With a detailed understanding of the acquisition criteria, and a list of prospects provided by our client, we conduct exhaustive research utilizing:
  • Personal industry contacts - current participants,
    association executives, customers & suppliers

  • A knowledge of market trends

  • M&A International's global network of over 40 firms

  • Internet, including online electronic databases

  • Government directories and industry association material

  • Trade publications

  • Annual reports (to flag misfits)

  • Research reports

  • Other intermediaries

JR/Janus maximizes your chances to success…


When the target is "for sale", and ample information is readily available, JR/Janus professionals analyze the data in the context of the established criteria. Experience and objectivity blends to provide a pragmatic consideration of the opportunity.

In the case of a business that is not for sale, the first approach to the owner can be threatening, and perhaps result in an outright rejection. Often the prospective purchaser receives a professional intermediary more positively than direct contact. We are sometimes retained to make the initial contact with a target already identified by a client.

Valuation and evaluation ensures value…


Using our proprietary computer models, we conduct a financial valuation, including historical analysis and modelling future "what if" scenarios. Our analysis considers book value/adjusted fair market value; industry norms for EBIT and bottom-line earnings multiple, and particularly Discounted Cash Flow.

The qualitative - strategic factors - are critical. We have the expertise and experience to deal with them in the context of our client's strategy and criteria. Assuming the numbers and the fit are right, the next step is to negotiate the deal.

Disciplined yet sensitive negotiation support…


We work with the principal to incorporate the basic transaction parameters into a Term Sheet which then provides the basis for contract preparation. We represent our clients well - and never more so than during negotiations. We battle hard for maximum advantage. But we know what it's like being across the table - because we're often there on behalf of vendors. We know the other side is as smart as our side. So while we fight hard, we're careful not to win a marginal battle only to lose the war.

Co-ordination for effectiveness & efficiency…


We monitor the due diligence process to make sure the agreements the principals reached as expressed in the Term Sheet, continue to be the road map. Although we are neither venture capitalists, accountants, lawyers, nor environmental experts, we can recommend the best professionals in their field, and oversee and co-ordinate their participation towards a successful Closing. All professional advisors should be directed to focus on those matters within their field of expertise which must be corrected to protect their client. When differences do arise, they should be highlighted and referred to the principals for resolution.

Valuation Services

JR/ Janus specializes in private company valuation services as they relate to:
  • Buy & Sell Transactions

  • Investor Considerations

  • Shareholder Agreements

  • Estate planning

  • Reorganization/ Restructuring

  • Financing Transactions

From a Quantitative Perspective:


Assuming a going concern, we approach the financial aspects of business valuation from two perspectives; market norms as well as detailed financial analysis. We employ appropriate valuation approaches and techniques depending on each circumstance.

We also consider the resulting and comparable multiples of existing and forecast EBITDA, EBIT, Book Value and the goodwill component relative to recent transactions and comparable companies. When performing comparable company benchmark analysis we make necessary adjustments for private versus public values as necessary.

As an example, we would put a great deal of emphasis upon a Discounted Cash Flow (DCF) valuation methodology for a business operating in a growth market where reliable forecasts are available. In our experience, a prudent and sophisticated investor will consider this methodology, based on free cash flow, the most reliable indicator of potential value.

When conducting the DCF analysis and in forecasting earnings, we start with normalized(1) historic performance, and make various assumptions as to what revenue and cost synergies as well as growth opportunities may be available to a strategic investor; or in some cases, to a special interest purchaser. Such assumptions get reflected in the projections of future performance helping to provide a realistic range of potential value.

From a Qualitative Perspective:


In addition to historical and projected financial performance, to be meaningful in the context of the way an investor will consider value, we also need to fully understand internal and external non-financial factors, including:
  • economic & industry outlook

  • competitive positioning/growth potential

  • proprietary technologies/patents

  • capacity for growth

  • state of assets

  • customer relationships / dependence

  • supplier relationships

  • management capability and intentions

  • company culture

We are mindful that any goodwill value will be based on these factors in addition to the historic and projected financial performance of the business.

Public versus Private Company Differences


In addition to the age-old public company valuation premium for liquidity, ease of exit, and absence of the need for hands-on involvement, versus a private company, size alone can also have a material impact on value. Often, small and mid-market companies lack market clout, have limited access to capital (debt and equity), limited public awareness, reliance on key people, etc. These factors can all contribute to a higher perception of risk by investors. Instinctively one is tempted to apply a discount from public company multiples in valuing a private company, to reflect this risk, thereby resulting in a lower multiple. However, this is not always justified, and we prepare an in- depth analysis to make a realistic interpretation of risk from an investor’s perspective, both for the private company being valued and the public company being used as a comparable.

Ultimately, assessing the going concern value of business assets and equity involves art (experience) as well as science (analysis). Value often encompasses intellectual property, intangible assets, and goodwill over & above the net tangible assets of the business. At JR/Janus, not only do we provide the detailed financial analysis but we rely upon our many years of experience to apply professional judgment when dealing with the constantly changing field of valuation.


(1)Normalization of financial statements of private companies refers to making adjustments for items that would not have typically occurred in the normal course of business e.g. revenue or costs uniquely discretionary to the owner(s).

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