Education
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Maximizing Value in an Education Business Sale
The Challenge:
A company in the education space specializing in test prep, tutoring services, and post-graduate application assistance received unsolicited acquisition offers. They were doing about $12-$15M in revenue a year. The business had multiple shareholders at different stages in life, leading to key questions:
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Were the offers fair? How did they compare to the true market value of the business?
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Should they sell or buy out the exiting shareholders? Could the remaining shareholders structure an internal buyout instead?
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How would different deal structures impact price and value?
The shareholders needed a clear and accurate valuation to make an informed decision and maximize the outcome of the transaction.
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Our Solution:
We conducted a comprehensive valuation analysis to provide the shareholders with a data-driven understanding of their business's worth:
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Normalized cash flows & built financial models – Adjusted financials to accurately reflect the business’s cash-generating ability and future earnings potential.
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Analyzed working capital & capital requirements – Assessed short- and long-term financial needs to determine an appropriate valuation model.
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Developed a Discounted Cash Flow (DCF) model – Used forward-looking projections to estimate the intrinsic value of the business.
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Conducted industry benchmarking & comparable transactions analysis – Evaluated similar companies and precedent transactions to validate valuation assumptions.
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Identified intangible value drivers – Assessed factors like brand reputation, student success rates, and proprietary course materials that enhanced business value.
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Prepared a comprehensive valuation report – Clearly outlined why the initial offers were undervalued and provided leverage for negotiations.
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The Outcome:
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Increased purchase price by $2.5M – Our analysis showed that the business was worth more than the unsolicited offers, allowing shareholders to negotiate a higher sale price.
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Provided clarity on ownership transition – Shareholders gained a clear financial picture to evaluate a potential internal buyout.
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Strengthened negotiation position – Armed with a detailed valuation report, the owners could confidently defend their business's worth and push for better terms.
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Protected shareholders from underselling – The insights and financial modeling prevented them from accepting an offer that was below true market value.
Considering selling your business or buying out a partner? Let’s ensure you get the right valuation.
Connect with us for a free consultation today.