The Valere Group

The Valere Group - What We Do
At The Valēre Group, we do not believe in predetermined exit strategies. But, we are fervent that owners of privately-held businesses must plan for the inevitable to assure that they have an opportunity for a transition on their terms. Based on 20 years of experience and work with hundreds of business owners, we have learned that most owners are not prepared for a transition and most are not aware of the key elements necessary to develop a well reasoned plan. By emphasizing these key elements, The Valēre Group helps ensure that owners retain maximum flexibility to take advantage of available opportunities in the future, or to be prepared for unforeseen events.  We do this through a process we call Strategic Value Creation.

Strategic Value Creation Defined

Strategy in the business sense refers to calculated decisions, decisions that have to be viewed and arrived at recognizing the potential of unpredictable and unknown events. These decisions can only stand the test of time if they are based on a solid understanding of transition alternatives.In the context of the services provided by The Valēre Group, the strategy is specifically focused on the maximization of the business' True Value.”

The “True Value” of the business cannot be measured solely from the owner's point of view or from a financial analysis; True Value entails understanding the business from the point of view of a prospective acquirer and/or investor, who values not only the financial performance, but also the intangibles such as “corporate culture” and “tribal knowledge” the special attributes that distinguish the entrepreneurial enterprise. As these intangibles can lead to potential premiums in a transaction, these elements of value must be recognized as part of the Transition Plan to assure they are being protected and enhanced. READ A RELATED CASE STUDY >

The most critical aspect of the planning process for a successful transition involves creating a personalized plan based on the unique attributes of the business and its ownership. To succeed, the plan must be dynamic, adaptable to the inevitable changes that will occur, and well-reasoned, based on the

  • a thorough discussion of ownership's objectives, as best as they can be articulated at the time, encompassing both the financial and non-financial aspects;
  • a considered discussion with owners about the various potential options for transition and/or a liquidity creating transaction, involving a presentation of the advantages and disadvantages of each; and,
  • consistency with ownership's available resources, capabilities and personal values.

Given the fluctuations of the macro financial environment, its ultimate effect on True Value, and the types of transactions that flow in and out of favor, owners have an additional responsibility – that is, the responsibility to know if at any given time they have the opportunity to create liquidity on their terms. This is particularly true because, in most instances, the majority of the owner's net worth is represented by the equity they hold in the business. Therefore, Strategic Value Creation also implies continual monitoring of the True Value.

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The Process
Working alongside your trusted advisors (attorneys, CPAs, etc.), we function as the shareholders’ impartial advocate utilizing the following Four-Step Process:

  • Assess All Transition Options
    Far too often, entrepreneurs reject one option or another based on incomplete information, thereby potentially limiting their opportunities. We facilitate a discussion to assess in detail the pros and cons of all potential transition alternatives.

  • Think Beyond the Financials
    For buyers and investors alike, the “true value” of a business encompasses more than the financials, yet owners often focus only on profits or EBIT and disregard the special attributes that can create premium value. The Valēre Group process identifies the existing elements of value as a baseline that will determine the current potential transition scenarios. We can then create a unique plan, a value-driven plan aligned to ownership's stated objectives, available resources and personal values.

  • Create a Blueprint and Use It
    We assist in the development of a plan, a Blueprint, which protects and enhances the business’ true value (which represents the shareholders’ wealth), and which can be integrated as part of the day-to-day management of the enterprise.

  • Access the Appropriate Expertise
    As part of the implementation plan, we identify, as necessary, expertise in specific disciplines to assist in the initial implementation of the plan.

Download a description of Valēre’s Transition Analysis >

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Steven Bryant recommends Don Matso

Why Strategic Value Creation is Critical
Transitioning to either succession or a sale is the most significant event in the business cycle of the entrepreneurial company and for their shareholders. Every owner will, at some time in their future, transition out of their business in some manner. Ignoring this inevitability, or belatedly approaching the issue at a time when opportunity presents itself or a need arises, can be costly. Yet, the vast majority of owners do not plan for the eventuality. Instead, some owners respond to an unsolicited and apparently attractive offer; some are prompted by a life-changing event for them, a business partner or a spouse.

Transition to either succession or sale for the privately owned business typically involves two vital outcomes – liquidity for the owners and providing a future course for their enterprise, with potentially residual financial rewards for owners and their families. The potential for success of either is diminished without proper planning. A study sponsored by PricewaterhouseCoopers stated that the main reason transitions by private business owners were deemed to be unsuccessful was the lack of planning. Sadly, we have also experienced instances wherein owners, after the fact, expressed satisfaction with a transaction that had already taken place, not realizing they might have been able to achieve even better results with proper planning.

Rufus "Bud" Reitzel recommends Don Matso
By waiting until a transition is imminent, when the value of the business is established, owners limit their options. Conversely, the more time that owners allow to develop and implement a plan in advance of a transition, the better positioned they are when the right opportunity does arise. Strategic Value Creation maximizes owners' opportunity for a transition that responds to their objectives and needs.

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The Required Expertise
To accomplish the above requires a thorough familiarity and experience in dealing with entrepreneurs, knowledge gained from practical experience in mergers and acquisitions and a background of hands-on profit and loss management, as well as the ability to provide objective, impartial counsel that is not financially vested in an eventual transaction.

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What We Don't Do
At The Valēre Group, we do not provide financial planning, investment advice, investment banking and/or mergers and acquisition services, legal or accounting advice. We do, however, work in conjunction with the trusted advisors in these disciplines that you already have, to add value to their professional services in assisting you to be prepared for the future.

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Cashing in Does not Mean Selling Out
By neglecting to plan, owners fail to take advantage of several potential options for a transition. The following are a few examples of alternatives:
  • Succession to senior management team, potentially including family members, allowing the continuation of the family business and positioning for a potential transaction at a later time at an enhanced value;

  • Partial sale to an investor, or a private market recapitalization – the latter can provide liquidity, flexibility, liquidation of a partner's equity who wants full retirement, while allowing owners to maintain an equity position and continue to manage the business with new resources;

  • Sale to a strategic buyer;

  • Sale to employees under an Employee Stock Ownership Plan (ESOP), a financial tool to provide liquidity with potential significant tax benefits.

Robert Martin recommends Don Matso

A thorough discussion of the advantages and disadvantages of all the transition alternatives is necessary to understand what attributes the business must display for any specific transaction to be possible.

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Liquidity on Your Terms
"On Your Terms" means different things to different owners, and can mean something different to the same owner at different times in his/her life, which is why it is critical to create a blueprint that is adaptable to unforeseen changes and that maximizes True Value and, thereby, ownership's options.

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Rufus "Bud" Reitzel recommends Don Matso

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The Valēre Group, Inc. Manhattan Beach, CA 90266
Phone (310) 968 5388 | Fax (310) 796 1123 |

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