Where to go for help


By Jason Fraler, managing principal, Anchor Peabody, LLC

Opening your business is the single most important event in a company’s timeline. Deciding to sell your business is usually the second most important event, so it is valuable to understand who can help you in the process.

We see deals mentioned all the time in our industry publications: “Company A acquires Company B,” but have you ever wondered who are the people who put together these deals? Sometimes the answer is nobody — Company A calls Company B and the deal is consummated without a third party, but most of the time there is an intermediary involved. For the layman, these intermediaries can be broken down into two basic categories: business brokers and investment banks.

Most of us will only get one chance to sell our business; let’s arm you with the proper knowledge so that you can pick the right one and affect the best possible outcome.

The business broker

Business brokers facilitate the sale process for smaller companies that have less than $5 million in sales, and/or a valuation of less than $5 million.

Sale process: This is very similar to selling a home. A basic overview of the company will be written and distributed to interested parties. Brokers will sometimes list your business on sales and trading networks (often online). The burden of the sale process can fall on the company, depending on the broker.

Price: 5% to 10% of the sale price, with no upfront fees/retainer

Pros: Lower fees; no upfront cost.

Cons: Minimal transaction experience (in scope); typically play “matchmaker” for parties with limited deal expertise; risk for subpar “story communication” and can exhibit a tendency to market firms to a limited number of established buyer relationships.

The investment bank

Investment banks handle large or sophisticated deals, especially those companies that will benefit from their dealmaking expertise. Typically, companies with sales of $5 million to $500 million, and/or $2 million in recurring annual EBITDA (earnings before interest, taxes, depreciation and amortization) will hire what is referred to as a “boutique” investment bank (sometimes referred to as an M&A adviser).

Note: Companies that are larger than $500 million in annual sales will most likely seek the help of Wall St. or “bulge-bracket” investment banks. Most of the companies in our industry aren’t this large, so for discussion purposes, we will focus on boutique investment banks.

Sale process: This is a sophisticated and proactive process designed to create momentum toward a sale and a closed, competitive auction, which maximizes valuation. A boutique investment bank develops high-quality marketing materials, which properly positions the company and articulates the opportunity. Boutique investment banks highlight the value, considerations and risks of a transaction, while tackling “deal killers” early on. They remove the burden of the sale process from the company by bringing in qualifying buyers, regulating buyer contact with management and facilitating information flow, thus allowing business owners to focus on their primary task: running the business.

Price: A percentage of the sale price (2% to 5%) referred to as a “success fee,” depending on the complexity and size of the deal, with an upfront and monthly retainer. Retainer fees cover the boutique investment banks’ cost associated with the significant investment of time and effort required to run an effective sale process. Should you decide to stop the sale process for any reason, you lose the retainer fees. However, if you follow through with the sale, your retainer fees will be credited against the success fee. This dynamic gives the boutique investment bank an ability to recommend when to walk away from an offer, because their costs are covered.

Pros: Wall Street transaction acumen coupled with personalized, senior-level service; will properly “package” and communicate the business’ story/merits to the market; boutique investment banks may have industry expertise.

Cons: Higher fees than a business broker; Boutiques may not offer a full-range of services found at a large bulge-bracket investment banks (i.e. IPOs, exchange of public securities, etc.).

Here are some questions to ask of your business broker or investment bank, to help find out if they are right for you:

• How much industry experience do they have?

• What are the biggest challenges my business faces in a transaction, and how will they deal with them?

• Who is in their network of contacts?

• What is their typical transaction type?

• What is their level of involvement once we have signed the engagement?

• Do they have a clear plan to create momentum for a successful transaction?

• In what may be the most significant event of my businesses’ lifetime, am I giving the transaction the best possible chance to succeed by choosing this adviser?

• Have they offered examples of, and am I comfortable with, their quality of work?

• Will I like working with this person?

• Will this person offer honest and candid advice?

The sale process can be stressful, overwhelming, time consuming, inefficient and a task outside the core competency of the management team. Selecting the proper adviser for your situation is a key to a successful transaction in order to maximize probability of success, execute the transaction efficiently, and prudently optimize valuation and terms.


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Danger: Texting and talking behind the wheel

BY Dinah Wisenberg Brin

As smartphones and tablets become ubiquitous, multi-tasking behind the wheel has been gaining notice as a grown-up workplace danger rather than the sole province of reckless, texting adolescents.

Along with the risks to life and limb, the trend carries significant financial perils for employers.

A worker who causes an accident while reading e-mail or texting on the job can expose an employer to millions of dollars in liability for loss of life, in addition to the costs of property damage and lost productivity.

Safety advocates and the government, alarmed over the prevalence of employee use of mobile phones on the highway, are pushing companies to adopt distracted-driving policies that ban the use of electronic devices while operating a vehicle.

“This is a new universe of risk,” Douglas Horn, an Independence, Mo., lawyer and founder of new driver safety organization Drive by Example, said in a recent interview.

While teen texting is a problem, adolescents make up a relatively small percentage of drivers and aren’t engaged in the business functions that many adult employees are, Horn said. As the iPhone and other app-filled smartphones have swept the consumer market in recent years, “previously safe drivers” have been turned into risky multi-taskers, he said.

Wanted: Phone policies

While airlines, railroads, and trucking and bus companies may be accustomed to focusing on transportation safety, businesses without large fleets may not have needed to give much thought to the topic until now. They have strong incentive to do so.

The National Safety Council (NSC) recommends that employers design cell phone policies “to follow best safety practices, reduce significant risks and minimize liability,” including bans on using hand-held and hands-free devices while driving for all employees, all company vehicles, all company mobile devices and all work-related communications.

Under a legal theory called respondeat superior, or “vicarious responsibility,” an employer may be held liable for negligent employee activity if the worker “was acting within the scope of his or her employment at the time of a crash,” a concept that has been liberally defined in court cases, the nonprofit group says.

Laws increase

Use of a cell phone while driving quadruples the risk of a crash, according to the AAA Foundation for Traffic Safety. While 94% of drivers agree that it’s unacceptable to text or send e-mail while driving, more than one-third of drivers reported in a 2011 survey that they had texted or e-mailed while driving during the previous month.

Distracted driving has caught the attention of state and federal policymakers. As of September 2012, 39 states, Washington, D.C., Guam and the Virgin Islands have banned text messaging for all drivers, and talking on a hand-held mobile phone while driving is banned in 10 states, D.C., Guam and the Virgin Islands, according to the Governors Highway Safety Administration.

Experts note that texting is but one of many distracting behaviors that occur behind the wheel. However, the federal government considers it especially alarming because it requires a driver’s visual, manual and cognitive attention.

The federal Department of Transportation and the Occupational Safety and Health Administration (OSHA), together with safety advocates, are promoting an anti-texting-while-driving campaign aimed at employers.

In addition, U.S. regulatory agencies have issued rules that take aim at electronic distractions among commercial vehicle operators under their jurisdictions. In 2009, President Barack Obama issued an executive order prohibiting federal employees from text messaging while driving on the job and in government cars and trucks.

“It is well-recognized that texting while driving dramatically increases the risk of a motor vehicle injury or fatality. We are asking employers to send a clear message to workers and supervisors that your company neither requires nor condones texting while driving,” OSHA states in its anti-texting materials. 

Feds crack down

OSHA says it will investigate credible complaints of employers requiring texting while driving and, if necessary, cite and penalize offending companies.

Among other federal agency moves, the National Transportation Safety Board (NTSB) in late 2011 called for a nationwide state-level ban on driver use of portable electronic devices behind the wheel. The NTSB noted numerous distracted-driving incidents, including the 2008 Chatsworth, Calif., collision of a commuter train and a freight train after the commuter rail engineer ran a red signal while texting. The crash killed 25 people and injured dozens more, prompting the Federal Railroad Administration to ban rail employees from using mobile electronic devices on the job.

The Federal Motor Carrier Administration, meanwhile, banned all hand-held mobile phone use by commercial drivers in late 2011.

Penalties pile up

The NSC, in a 2012 report on corporate liability for distracted driving, cites several cases, including a 2007 fatal crash in which the driver and the company that owned the vehicle were found liable for nearly $22 million after testimony indicated that the employee may have been on a personal cell phone call at the time.

In another case, a lumber company settled for $16 million — the combined limits for employer and employee insurance policies — after a salesman talking on his cell phone rear-ended a vehicle and disabled an elderly woman, the NSC report stated.

And in Illinois, a state trooper responding to an accident exceeded 120 mph on a highway while talking on the phone to his girlfriend and using e-mail before losing control of the squad car, the NSC said. The resulting crash killed two teenage sisters, whose family was awarded $8 million, and injured a couple in another vehicle, the report said.

The NSC offers a free cell phone policy kit for employers wanting to implement or improve their distracted-driving policies.

“Can you believe the amount of increased exposure for corporations that thought they didn’t have exposure?” Horn said. He encourages businesses to add distracted-driving prevention campaigns to their corporate wellness programs.

Horn believes anti-texting laws and various apps on the market aimed at preventing distracted driving aren’t enough. The laws don’t necessarily extend to all mobile-device activity on the road, and the apps — some of them employer-controlled — have their limits as well, he said.

Horn believes overcoming distracted driving will require the same sort of cultural shift that resulted in widespread seatbelt use. Those with a financial incentive to promote highway safety — insurers and employers — “can really make a difference and spike cultural change,” he said.

Dinah Wisenberg Brin is a freelance journalist based in Philadelphia.

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High-tech, water-saving K&B innovation


ConservCo Waterfall Series Showerheads
The WS-M5C-C Multnomah Showerhead Combo-Pack, named after one of the largest waterfalls in the world, offers five spray patterns in a wide-faced “Rain-Style” showerhead. Engineered to flow at 2.5 gallons per minute, its design makes the user feel as if he or she is using more water. The Multnomah Combo-Pack includes two showerheads (one fixed and one handheld). The heads can be used together in one shower, or separately in two. The showerhead, made of ABS and brass, was seen at this year’s National Hardware Show’s New Product World. (

KitchenAid French Door Refrigerators
KitchenAid has introduced new freestanding French door refrigerators that utilize a system of advancements to extend the storage life of fresh and frozen ingredients. These models join a line of models with the company’s Preserva Food Care System, which controls humidity, ethylene gas and odors. Sequential dual evaporators provide independent cooling to help prevent refrigerator air from mixing with freezer air. Two interchangeable humidity-controlled crispers with a FreshFlow Produce Preserver in one of the crispers helps delay over-ripening by up to 25% in produce. The crispers are humidity-controlled automatically based on the amount and types of foods. (

Moen Russo kitchen faucet
The new Moen Russo kitchen faucet, available exclusively at Menards, is a pulldown kitchen faucet with a single-handle, single-hole design. It has a Spot Resist Stainless finish, which resists water spots and fingerprints. It also features a high-arc spout — ideal for filling large pots and pans — and offers a multi-function pulldown wand to allow users to switch between several water-flow patterns with the touch of a button, including powerful spray, aerated stream and a pause button. In addition, the Moen Reflex system offers a wide range of motion, reach and secure retraction. Each Russo faucet features the Moen 1255 Duralast cartridge for a smooth handle feel, as well as the Quick Connect installation system. A “click” audibly signals a secure connection and eliminates the need for tools to attach the water line to the faucet. (

GE Double Ovens
GE has announced eight double-oven models, including an electric slide-in double oven. Double ovens also reduce energy use and save money by cooking with the oven best suited to the meal. The smaller top oven heats faster and uses less energy than the bottom oven, as well as most standard single ovens. The bottom oven can hold larger meals, and in most GE models, features advanced convection cooking for even baking and roasting. (

TOTO Wyeth Faucet Collection
TOTO’s Wyeth Faucet Collection features high-­efficiency lavatory faucets, tub fillers and shower trim. The collection complements traditional, transitional and contemporary bath decor. This Universal Design product suite features ADA-­compliant lever handles to facilitate ease of use. The environmentally friendly, Watersense-labeled, high-­efficiency faucet consumes a 1.5 gallons per minute. (

Porcher Chapeau pedestal lavatory
The new Chapeau pedestal lavatory from Porcher coordinates with a wide range of bathroom decors. The white pedestal lavatory completes the Chapeau suite. Available separately as a wall-hung option or with a 36-in. Right Height pedestal, the Chapeau lavatory offers design flexibility. The lavatory features faucet holes on 8-in. centers and fire clay construction. Also available is an optional European complete pop-up drain assembly, which is offered in three finishes: polished chrome, polished nickel and brushed nickel. The matching Chapeau LXP toilet features a one-piece elongated design and is available in 1.6-gallon per flush (gpf) or high efficiency 1.28 gpf models. Both models feature American Standard PowerWash bowl cleaning technology, which ensures a powerful flush and superior bowl cleaning. (

BLANCO water-saving kitchen faucets
German manufacturer BLANCO has introduced nine new water-saving faucets, which conserve water without sacrificing style or performance. The new BLANCO Linus, the award-winning BLANCO Culina and the new BLANCO Alta are just a few designs from the collection. With an 1.8 GPM flow rate and ceramic disc cartridge, each faucet helps preserve the earth’s drinking water supply. The ultra-efficient BLANCO Hydra saves 30% with a 1.5 GPM flow rate. The BLANCO eco-friendly faucets come in a range of finishes, including Polished Chrome, Satin Nickel plus Silgranit II colors: Café Brown, Biscotti, Truffle and Anthracite. (

Dacor Warming Drawers
Dacor’s Renaissance 30-in. Millennia Warming Drawer is a complement to the recently launched Renaissance 30-in. Single and Double Wall Ovens. The Warming Drawer features black glass and vertical stainless steel facades, as well as an identical brushed stainless steel handle. The Renaissance 30-in. Warming Drawer offers four different heat settings: Proof, Low, Medium and High. The Proof mode is ideal for activating yeast when baking bread, while the other settings are used for keeping dinner plates warm. The Warming Drawer also features an Illuminated Electronic Control Panel, which allows for simple and convenient temperature selection. A Moist/Crisp Slide feature allows users to select how moist or crisp they want their food to be when warming. (


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How concerned are you that a trade war could hurt your business?