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Resources for Sound Business Decisions.™


“SWISS ARMY KNIFE” OF BUSINESS

DEALSENSE PLUS+

®

THE WORLD’S MOST COMPLETE M&A SOFTWARE SYSTEM SAVES TIME AND SHORTENS DEAL CYCLES.

DealSense is your all-in-one system for business valuation and evaluating the economics of middle-market mergers and acquisitions including combinations, consolidations and rollups.

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Dealsense Plus

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PRODUCT INFO: DEALSENSE PLUS+

FINANCIAL ANALYSIS, VALUATION AND M&A PLANNING SOFTWARE FOR MID-MARKET DEALMAKERS AND ADVISORS.

This time-tested system has been called the “Swiss Army Knife” of business valuation and M&A planning software.

DealSense Plus streamlines the process of analyzing a company, estimating value, structuring a transaction and evaluating ROI based upon a very robust approach to projecting and discounting free cash flows.

It eliminates the inconsistencies and limitations of error-prone spreadsheets while providing an illuminating and diligent analysis. The resulting efficiencies allow you to:

  • Shorten the time required for business analysis, valuation, and planning.
  • Spend more time and energy on the strategic elements of the deal in order to build value and reduce risk.
  • Negotiate from a position of informed strength.

DealSense is the only deal diligence and productivity tool that can benefit both Sell-side I-bankers and Intermediaries along with Buy-side Private Equity, Corporate Buyers and their Advisors.

  • Prepare valuations and evaluations for their clients (based upon Market or Fair Market Value).
  • Help clients understand and bridge the value gap–a source of potential revenue and future deal flow.
  • Enhance pre-marketing due diligence and preparation–for fewer hiccups during due diligence.
  • Present supportable normalization (recast) adjustments to financial statement data.
  • Prepare effective “pitch books” and confidential information memoranda based upon hard numbers and the data points that buyers need and want to see (such as free cash flows).
  • Create fact sheets and “teasers.”
  • Analyze the repayment prospects for seller financing and contingency payments such as an earn-out or royalty.
  • Add buy-side analysis and advisory services to their practice.
  • Initially evaluate and triage deal opportunities.
  • Drill down into historic financial data.
  • Develop a price along with deal structure and terms.
  • Prepare detailed and fully linked projected financials/cash flows based upon price, terms, funding and new operating assumptions.
  • Evaluate the ROI of post-deal free cash flows (the “Investment Value” of the deal).
  • Consolidate/combine two business entities and evaluate accretion/dilution along with enterprise value created.
  • Prepare editable Terms Sheets, Acquisitions Proposals and Transaction Consolidation Reports.
  • Prepare in-house valuations of portfolio companies.

DEALSENSE PLUS+ SCREENSHOTS

Comlete system for sell-side and buy-side dealmakers
Easily set up Financial Statements
Control all aspects of post-deal projections including synergies and assumptions under new management
Detailed financials and recast adjustments
Easily make assumptions for capital expenditures and depreciation after the deal
Ratios, comparison to industry norms, and other analytics help you assess performance and position
return on invesment irr and npv based on post deal free cash flows helps buyers determine if the deal meets their hurdle rate threshold
Return on invesment, IRR, and NPV based on post-deal free cash flows helps buyers determine if the deal meets their hurdle rate threshold
Handles both asset and stock purchases
Add debt funding from seller financing and other lending sources
Flexible equity funding options

SUPPORTABLE VALUATIONS AND DEAL ANALYSIS:

The valuation component of DealSense Plus was developed in collaboration with Practitioners Publishing Company (a Thomson Reuters company) to conform to their 3-volume Guide to Business Valuations. The valuation prepared by DealSense Plus is used by CPAs and valuation professionals in business planning, taxation and litigation-support matters.

So, you get the best of both worlds: Supportable Market and Fair Market Valuation and robust M&A analysis and Post-Deal Investment Value. DealSense is the only system that delivers both.

Leverage your time, enhance your knowledge, sharpen your analytical skills and better influence your company’s or clients acquisition activities with the DealSense Plus business valuation and M&A analysis software system.

ADDITIONAL INFO: DEALSENSE PLUS+

THE “SWISS ARMY KNIFE” OF ACQUISITION VALUATION AND ANALYSIS.

A disciplined and comprehensive system for analyzing, valuing, pricing and evaluating the ROI of corporate acquisitions and buying a business.

IS THIS YOUR STORY?

You or your client are buying a business. Financials need to be adjusted and analyzed. Models need to be developed and maintained to value and price the company. Detailed projections are needed to evaluate the implications of different funding and operating assumptions. Plus, new assumptions are constantly being introduced as a result of negotiations with the seller and funding sources. Due diligence and post-acquisition planning are constantly introducing new variables to evaluate. You feel like you’re working with a moving target and you’re working in a pressure cooker. And to add to it all, you find yourself wasting hours hassling with spreadsheets—time that could be better used focusing on strategic thinking and value creation.

If this story has a painfully familiar ring to it, then it’s time to join the thousands of Business Buyers and their Advisors who’ve added MoneySoft’s deal valuation and acquisition analysis software to their toolbox. DealSense Plus is a logical, step-by-step guide through the process of financial analysis, business valuation, pricing, structuring and financing acquisitions that make economic sense. At last, you’ll be free from the mind-numbing, time-wasting, living-hell that business writers have appropriately called. . . “Spreadsheet-itis.”

IMAGINE WHAT YOU COULD DO WITH THE TIME YOU’LL SAVE

Here are a few examples:

  • Focus on business-building strategies and value creation instead of hassling with spreadsheets and writing formulas.
  • Organize raw business data into actionable analysis and insightful reports for management, the boardroom, funding sources and prospective investors.
  • Optimize purchase price, structure, and terms.
  • Create a realistic and feasible financial blueprint for an acquisition.
  • Respond quickly as new data becomes available through the negotiating, due diligence and financing processes.
  • Standardize valuation and acquisition analysis within your organization so team members can more effectively collaborate on the content and implications of the analysis. (Some clients use DealSense Plus to supplement or validate their in-house models.)

You will leverage your time, enhance your knowledge, sharpen your analytical skills and better influence your company’s or clients acquisition activities with MoneySoft’s deal-analytic software.

DEALSENSE PLUS PROVIDES ROCK-SOLID, WALL-TO-WALL ACQUISITION VALUATION AND ANALYSIS

Here’s How the Program Works: The process begins with the input and normalization (recasting) of historic financial statement data. Normalization helps you draw a more accurate picture of the economic earnings and position of the business being valued or considered for acquisition. Financial data is then analyzed to determine if the company is gaining, losing or holding financial ground. The analysis includes 34 traditional Business Ratios, Common-Size Statements and financial statement benchmarking using RMA Annual Statement Studies® Data.

DEALSENSE PLUS OFFERS MUCH MORE THAN TRADITIONAL RATIO ANALYSIS:
  • Detailed ratio analysis of both historic and recast financial statements.
  • Enhanced analytics such as DuPont Analysis, Z-Score bankruptcy predictor and Sustainable Growth Rate.
  • Financial statement benchmarking/comparison using Integra 5-Year Industry data. Reports are available individually or by subscription.

A set of comprehensive “current-ownership” projections (before synergies and the impact of deal terms & financing) is then prepared in order to estimate the earning potential and anticipated financial position of the business based upon its current trajectory.

DEALSENSE PLUS ALSO INCLUDES DETAILED MONTHLY PROJECTIONS:

In addition to annual projections, you can prepare detailed month-to-month Current Ownership Projections for 24 months. This is essential when annualizing an interim statement or evaluating a highly seasonal or cyclical business. Once financial statements have been adjusted, analyzed and projected, the next step is put a value on the company using generally accepted valuation approaches and methods. In general, a valuation provides guidance and support for a variety of business, tax and legal matters. With respect to acquisition analysis, a valuation provides a baseline when considering purchase price. (If you already have a value in mind, you have the option to bypass the valuation and go to the next section where you’ll establish price and deal terms.)

DEALSENSE PLUS IS AN ADVANCED BUSINESS APPRAISAL AND VALUATION SYSTEM:
  • DealSense Plus includes all of the power and functionality of MoneySoft’s advanced Business Valuation System, Corporate Valuation Professional. So, DealSense Plus is really two programs in one: valuation plus acquisition analysis and reporting.
  • Additional valuation approaches and methods necessary to prepare Fair Market Valuations that meet the standards of IRS 59-60 are included.
  • The Valuation Report created in DealSense Plus incorporates the AICPA’s new Statement on Standards for Valuation Services No. 1.
  • The valuation procedures in DealSense Plus are designed to conform to the rigid standards of Practitioners Publishing Company’s (a Thomson Reuters Company) Guide to Business Valuations authored by Shannon P. Pratt, Jay E. Fishman, J. Clifford Griffith, D. Keith Wilson and Stanton L. Meltzer, recognized leaders in the field of business valuation.
  • Optional valuation databases include Done Deals Completed Transactions and BIZCOMPS Small Business Studies.

After considering value, you are ready to establish purchase price, deal terms and estimate Return on Investment based upon Discounted Free Cash Flows. The system guides you through the process of engineering the deal and automatically calculate the key metrics necessary to:

  • Select a Purchase Price.
  • Structure Payments to the Seller.
  • Include the terms of any Contingency Payments or Earn-Outs.
  • Allocate Purchase Price.
  • Estimate the Cost of the Transaction and the Amount of Funding Required to Close the Acquisition.
  • Determine Cash Required at Closing.
  • Summarize Sources of Funding.
  • Determine the Cost of Capital and Hurdle Rate.
  • Review Return on Investment metrics based upon “Pre-Acquisition” Free Cash Flows. ROI metrics include: Net Present Value, Profitability Index, Internal Rate of Return with Spread over Hurdle Rate, and Payback Period.

A second set of comprehensive Financial Statement Projections (for up to 10 years) is prepared based upon post-acquisition operating assumptions, proposed transaction structure and terms, and financing activities.

  • Set Operating Assumptions for Balance Sheets and Income Statements to prepare Post-Acquisition Financial Statements based upon New Ownership. You have control over each line item/account.
  • Plan and input Capital Expenditures for each Asset Account for each projected period.
  • Plan and input Fixed Asset Disposals for each projected period.
DEALSENSE PLUS INCLUDES MONTHLY “POST-DEAL” PROJECTIONS:

In addition to annual projections, you can prepare detailed month-to-month Post-Acquisition Projections for up to 36 months. Here again, this is essential when projecting financials for a highly seasonal or cyclical business, or when there are concerns with short-term liquidity or allocation of resources. Create a financial blueprint to fund the acquisition and meet the funding needs during the term of the projection:

  • Secured Credit Analysis indicates the amount of available leverage based upon Asset Values.
  • Set the Terms of lines of credit that include: A/R Revolver, Inventory Revolver and Evergreen.
  • On-board Purchase Funding Monitor keeps track of the balance of Financing that is required to Fund the Closing and initial working capital.
  • Set the Terms for up to 10 Long-Term Debt Funding Instruments.
  • Long-Term Funding Debt includes a host of term options to structure a workable financing plan. Available options include: Direct Reduction or Amortized Repayment, Interest and/or Principal Deferral, and Balloon Payment along with Repayment Term (months) and Interest Rate.
  • Convertibles and Warrants (Equity Kickers) can be included as an element for any Long-Term Note.
  • Equity Funding options include the sale of new shares, redemption of shares and/or the tender of Buyer or Sponsor Stock along with Convertible Preferred.
  • Capital Expenditures can be financed throughout the duration of the post-acquisition projection.
  • The Income Tax Worksheet allows you to include any adjustments or credits to federal, state, and local-level income taxes in order to prepare a more accurate tax calculation.

Based upon operating assumptions, deal terms and funding, the following financial statement reports are prepared:

  • Sources and Uses of Funds.
  • Acquisition Funding Summary.
  • Balance Sheet at Closing.
  • Projected Income Statements, Balance Sheets, and Statements of Cash Flows.
  • Summary of Key Projection Results along with supporting tables for both Depreciation and Debt Amortization.

Post-Acquisition Projections are analyzed to help identify any systemic weaknesses and provide a reality check for complying with loan covenants. Post-Acquisition Projections are further analyzed to estimate the Return on Investment to initial Equity Investors and holders of Convertible Preferred Stock, Convertible Debt and Warrants. Key measures include:

  • Present Value of Discounted Free Cash Flows based upon your Hurdle Rate.
  • Net Present Value of Free Cash Flows.
  • Other Capital Budgeting calculations include Profitability Index (Present Value of Free Cash Flow divided by Present Value of the Initial Investment), Internal Rate of Return and Payback Period.
  • Year-to-year Projected Valuation based upon your selection of an Earnings Multiple.
  • IRR Analysis for up to 10 different Equity Groups based upon year of exit and percentage of ownership.
  • Cash Flow Summary for Equity Groups.

“If you don’t measure it, you can’t manage it” DealSense Plus is a proven, practical tool for the real-world challenges of analyzing business acquisitions. It helps you answer key financial questions. It supports sound and disciplined decisions by providing feedback on the implication of transaction terms and operating assumptions.

CREATE CREDIBLE AND EFFECTIVE REPORTS

An exhaustive analysis and plan that can’t be effectively communicated, can be very frustrating for the both analyst and any decision maker trying to wade through the piles of data. There is a solution that organizes the data into useful information. DealSense Plus includes an on-board financial report builder that links the analysis model with a pre-formatted report/narrative that is logical and easy to understand. The Financial Report Builder scans thousands of cells in order to organize and present a report that is relevant and documents the methods, procedures and key assumptions that you used. The Financial Report Builder helps avoid the “paralysis of analysis” and allows you to harness the power of your analysis by turning it into a credible narrative. Say “Goodbye” to writer’s block and the hassles of cutting-and-pasting. The Financial Report Builder will save you hours and hours. Combining the “story” around the numbers is a winning formula. You can master the art of financial analysis, business valuation, pricing, structuring and financing acquisitions that make economic sense. With the embedded business theory and analytical horsepower of DealSense Plus, deal analysis and planning will be more manageable and productive. This workhorse will help you reduce stress and the pressures that accompany evaluating and buying a business. You will get a superior analysis and the time you save can be better used to focus on strategy and value creation.

RISK-FREE OFFER!

Install DealSense Plus and put it through its paces. If you can honestly say that our products do not save you time and perform exactly as we say they will, simply let us know within 30 days from the date of purchase and we will gladly issue a full refund. So, you have nothing to lose… Investing in DealSense Plus before you invest in a business acquisition…is the best investment you can make.

SPECIFICATIONS OF BUY-OUT PLAN® AND DEALSENSE® PLUS

Buy-Out Plan® and DealSense Plus® are comprehensive systems that integrate financial analysis… valuation … pricing… detailed financial projections… free cash flow ROI modeling and report writing within a single system that is Microsoft Windows Vista/XP/2000/NT compatible.

DealSense Plus is the more powerful of the two systems

Buy-Out Plan and DealSense Plus both follow the same track for a solid, wall-to-wall acquisition analysis. The difference is in the depth and scope of the analysis. DealSense Plus is the more powerful of the two systems. In addition to providing in-depth acquisition analysis, it is also a complete system for preparing reliable valuations for business planning, tax or litigation matters.

For business buyers, both systems help you focus on what’s important-making money and creating shareholder value by purchasing a business.

Corporate finance professionals, accountants, M&A advisors, investment bankers and savvy business buyers use Buy-Out Plan and DealSense Plus to streamline valuation, acquisition analysis and planning so they can focus on value-building strategies. The key components of these two systems are interwoven and build upon each other for a more focused and in-depth review of an acquisition throughout the various stages of the acquisition process. The following is a summary overview of the major sections of each program:

  • Financial Statement Normalization and Recasting
  • Insightful Financial Analysis and Benchmarking
  • A Powerful Engine for Preparing Projections
  • Business Valuation Using ACCEPTED Methods
  • Economically Sound Price, Terms & Deal Structure
  • Post-Acquisition Financial Simulation & Business Acquisition Risk Analysis
  • Return on Investment based Discounted Free Cash Flows

CUTIVE-LEVEL PRESENTATION AND REPORT GENERATION

Both Buy-Out Plan and DealSense Plus include an on-board financial report builder that links the analysis model with a pre-formatted report/narrative that is logical and easy to understand.

The Financial Report Builder scans thousands of cells in order to organize and present a report that is relevant and documents the methods, procedures and key assumptions that you used.

The Financial Report Builder helps avoid the “paralysis of analysis” and allows you to harness the power of your analysis by turning into a credible narrative. Say “Good Bye” to writer’s block and the hassles of cutting-and-pasting. The Financial Report Builder will save you hours and hours. The rest of this document provides a comprehensive review of the analytical horsepower for each program.

Although the programs are very similar, the features that are unique to DealSense Plus have been highlighted for easy comparison.

INSIGHTFUL FINANCIAL ANALYSIS

Buy-Out Plan and DealSense Plus include the metrics you need to assess the financial performance of a business using both historic and adjusted (recast/normalized) financial statements.

  • Flexible chart of accounts allows you to mirror the target company’s financials and accommodates up to 10 years of historic Income Statement and Balance Sheet data and supporting information.
  • Interim financial statements can be entered, adjusted and annualized. You have the option to use Interim Balance Sheet data in the valuation methods. This gives you the flexibility to use either the Interim or Year-End data depending upon which one is most appropriate given the valuation assignment.
  • Statements of Cash Flows, Retained Earnings and Sources & Uses of Funds are calculated automatically.
  • Easily make “normalization” adjustments for any account and for any historic period. Eliminate the effects of excessive, discretionary, personal, non-operating, deferrals, and non-recurring items to reflect the true economic condition of the company. Normalized (recast) financial statements are presented along with an Earnings & Net Cash Flow Summary that highlights the bottom-line effects of all adjustments.
  • Explanatory notes can be made to document and track adjustments.
  • Common-size Income Statements and Balance Sheets as well as 33 common financial ratios that measure liquidity, coverage, leverage and profitability are automatically calculated.
  • Performance can be compared to the specific industry based on standard Risk Management Association’s (formerly Robert Morris Associates) Annual Statement Studies format.
  • Performance can also be compared using Integra Information’s 5-Year Industry data for common-size statements and 60 ratios.
  • Z-Score Model measures the probability of the target becoming insolvent within the next 12 months. This widely used model helps assess economic viability.
  • Sustainable Growth Model measures the maximum growth rate of sales that is sustainable without depleting financial resources. This helps determine whether revenue growth assumptions are in line with profit margins, dividend payout, asset turnover and financial leverage assumptions, both before and after the transaction.
  • DuPont Analysis to help identify whether changes in ROE are being driven by Sales Margins, Asset Management or Financial Leverage
  • The MoneySoft Five-Minute Diagnostic™ provides a snapshot of a company’s footing and highlights the factors that are driving or dragging its performance based upon financial statement data.

A POWERFUL ENGINE FOR PREPARING FINANCIAL PROJECTIONS

Buy-Out Plan and DealSense Plus allow you to prepare two sets of fully linked, line-item projections of the Income Statements, Balance Sheets, Statements of Cash Flows, Statements of Retained Earnings and Sources & Uses of Funds. The objective of the first set of projections is to develop a supportable forecast of the company’s future earnings and financial position under existing management and ownership.

  • Fully linked, line-item projections of the Income Statements, Balance Sheets, Statements of Cash Flows, Statements of Retained Earnings and Sources & Uses of Funds are created for 1 to 10 years.
  • Detailed monthly financial projections for up to 24 months can be prepared using seller-provided data, the Top-Down or Bottom-Up approach or a hybrid of the three.
  • Income Statement projection options include regression trend-line, historic average growth, manual constant growth, historic percent of sales, variable growth rates, manual percent of sales, or manual dollar value inputs.
  • The base projection amount for each Income Statement account can be adjusted as needed.
  • Projected income taxes are estimated based on corporate tax tables or effective tax rates. A Tax Reconciliation Worksheet allows for application of adjustments to taxable income and credits to Federal, State, Local and other taxes.
  • Net Operating Loss carry-forward is automatically deducted as projected income permits.
  • Common Dividends are calculated as a percent of net income and Preferred Dividends as a percent of the preferred stock balance, or enter dividends manually.
  • Accounts Receivable, Inventory and Accounts Payable can be projected using historically calculated turnover ratios, manual turnover ratios or dollar amounts.
  • The amount of Fixed Assets required to sustain revenue growth is estimated. Assets can be purchased and disposed of in any projected year. The effect of asset purchases and disposals is automatically calculated along with depreciation using straight-line or accelerated methods.
  • Fixed asset purchases can be financed, in whole or in part, during any projected year with changes to the projected financial statements calculated automatically.
  • Short-term and long-term notes are amortized with flexible payment options controlled by the user including normal amortization or direct reduction, interest and principal deferrals and balloon payments that are calculated automatically.
  • A/R, inventory and cash maintenance revolvers can be set to maintain desired cash balances in the projected balance sheets.
  • Goodwill and other intangibles are amortized over any term.
  • Key income statement and balance sheet figures are summarized and presented for each projected year.
  • Includes summary of depreciation and loan amortization items.

BUSINESS VALUATION USING ACCEPTED MODELS

Buy-Out Plan and DealSense Plus include the methods and approaches necessary to prepare a supportable valuation. Valuation is examined from several perspectives using professionally accepted valuation methods and forms an intelligent framework for purchase price considerations. Both Buy-Out Plan and DealSense Plus provide a thoughtful and logical guide through the valuation process. You can examine a company’s value with Buy-Out Plan using 10 common valuation methods. DealSense Plus, the more powerful of the two systems, has 29 different methods in order to arrive at a supportable conclusion of value.

DealSense Plus is a more complete Valuation System:

  • Additional valuation approaches and methods necessary to prepare Fair Market Valuations that meet the standards of IRS 59-60. The Valuation Report created in DealSense Plus incorporates the AICPA’s new Statement on Standards for Valuation Services No. 1.
  • The valuation procedures in DealSense Plus are designed to conform to the rigid standards of Practitioners Publishing Company’s (a Thompson Reuters Company) Guide to Business Valuations authored by Shannon P. Pratt, Jay E. Fishman, J. Clifford Griffith, D. Keith Wilson and Stanton L. Meltzer, recognized leaders in the field of business valuation.
  • Optional valuation databases include Done Deals/Completed Transactions and BIZCOMPS Small Business Studies.

ASSET VALUATION METHODS:

  • Net Asset Value
  • Liquidation Value

INCOME VALUATION METHODS:

  • Capitalization of Earnings
  • Discounted Future Earnings
  • Discounted Cash Flow
  • When determining discount and capitalization rates, you have the option to use either the Build-Up method or the Capital Asset Pricing Model (CAPM) method. If you are valuing the company on a debt-free basis, you can convert the discount and capitalization rates to their debt-free equivalents based on the company’s weighted average cost of capital.
  • In valuing the company’s historic and/or future earnings, you can use any of the following: Normalized Net Income, EBT, EBIT, EBITDA, Net Cash Flow and Free Cash Flow.

MARKET AND COMPARABLE COMPANY VALUATION METHODS:

  • Price to Earnings (manual input of multiple).
  • Price to Revenue (manual input of multiple).
  • Price to Gross Cash Flow (manual input of multiple).
  • Price to Dividends (manual input of multiple).
  • Price to Net Asset Value (manual input of multiple).
  • Price to Book Value (manual input of multiple).

OTHER VALUATION METHODS:

  • Capitalization of Excess Earnings.
  • Multiple of Discretionary Earnings.
  • Preferred Stock valuation based upon the market yield of preferred stock from comparable companies.
  • Buy-Out Plan and DealSense Plus give you the option to apply Control Premiums, Minority Discounts, and Marketability Discounts as well as the ability to value partial interests.
  • Control Premiums, Minority Discounts, and Marketability Discounts can be applied to each individual valuation method or in the valuation conclusions.
  • A valuation summary lists each method used and the respective value, which can be weighted and averaged to arrive at a total equity value.

DEAL SENSE PLUS INCLUDES AN ADDITIONAL TEST TO MAKE SURE A VALUE IS SUPPORTABLE AND REASONABLE:

  • An “economic reality test” of your conclusion of value is included. You set hypothetical purchase terms including the amount of equity and the required return, and the amount and payment terms of up to four levels of acquisition debt. A “real-time monitor” gives you instant feedback.
  • Key measures of operating performance and Return on Investment performance for the hypothetical transaction terms are provided as part of the economic reality test.
  • Also included are flexible Rules of Thumb that allow you to use any combination of multiples of earnings, assets, and user-defined multiples to determine the reasonableness of the values indicated by the other methods.

BUSINESS VALUATION USING ACCEPTED METHODS

Embedded in both Buy-Out Plan and DealSense Plus is a pricing approach that is designed to inoculate a buyer from paying too much for an acquisition-the “winner’s curse.” There are numerous metrics and data points that will guide a buyer toward a viable acquisition price and structure.

  • Transaction can be structured as either a stock or asset purchase.
  • Investment banking fees on a “user-defined” sliding scale (i.e., Lehman formula) are automatically calculated. Legal, accounting and other transaction-related fees may be estimated and included in the cost of the acquisition.
  • Purchase price worksheet includes a comparison of 10 multiples based upon asking price, proposed price, fair market value (FMV), market value of invested capital (MVIC) and enterprise value (EV).
  • Premiums over FMV, MVIC and EV for both the proposed purchase price and asking price are also calculated and presented. The results for each valuation method are also available from the pricing worksheet.
  • Purchase price can be distributed between assets or stock, non-compete agreements, employment agreements, management contracts, and goodwill, if any.
  • Allows you to specify payment terms for any Non-Compete Agreements, Management Contracts and Contingency Payments.
  • Intangible assets can be allocated in accordance with FAS 141.
  • Assets can be purchased in whole or in part, based upon book or allocated at market. Liabilities can be assumed in whole or in part.
  • Summarizes seller’s proceeds between cash, seller financing and assumed liabilities and estimates the total purchase cost to the buyer after considering transaction costs and estimated contingency payments.
  • Summarizes the remaining amount of funds required to complete the sale after considering seller financing, liability assumptions and other deferred payments to seller.
  • Develop a Hurdle Rate for use in evaluating returns on Total Invested Capital and Invested Equity.
  • Analysis of Returns on Investment using Free Cash Flow from Pre-Acquisition projections. Measurements include Net Present Value, IRR, Hurdle Rate/IRR Spread, Profitability Index and Payback Period.

POST-ACQUISITION FINANCIAL SIMULATION & RISK ANALYSIS

Buy-Out Plan and DealSense Plus include a second set of detailed financial projections that allow you to evaluate the impact of a multitude of assumptions. Purchase price, structure, and an array of funding options are integrated into the projections along with the impact of operating assumptions. The projections automatically update as assumptions are changed to provide instant feedback on their implications to support the negotiating and decision-making process.

  • All or some of the operating assumptions from the Pre-Acquisition Projections can be imported and modified. You have complete control of every line item. (See section on Pre-Acquisition Projections for details.)
  • Monthly projections can include detail for up to 36 months.
  • Secured Credit Analysis determines the amount of credit available based on the appraised value of unencumbered assets.
  • Funding options include revolving lines of credit, bank notes, term debt, subordinated debt, inventory and accounts receivable revolvers, convertible debt, warrants/options, common stock, preferred stock and convertible preferred.
  • Funding options can be used to finance the acquisition and to plan for future working capital needs.
  • Acquisition Funding Summary provides a detailed listing of all sources and uses of acquisition funds.
  • Prepares a second set of detailed, fully linked financial statement projections for up to 10 years based on transaction structure and terms, funding and revised assumptions under new management and ownership.
  • A Tax Reconciliation Worksheet allows for application of adjustments to taxable income and to Federal, State, Local and other taxes.
  • Pro Forma projection summary provides key income statement and balance sheet figures for each projected year.
  • Includes summary of depreciation and loan amortization items. Post-acquisition financial projections are subjected to a number of analytical tests that point to potential problems and trends that might impact the future viability and health of the company.
  • A comparative review of critical ratios, performance and planning criteria is provided for the historic base year, the pro forma base year and for each projected year after the acquisition.
  • Provides the ability to configure loan covenant compliance limits set by the lender and automatically determines any period for which a loan is in default.
  • Calculates Ratios and Common-Size Statements for each projected year after the acquisition.
  • Z-Score Model measures the probability of the target becoming insolvent within the next 12 months. This widely used model helps assess economic viability.
  • Sustainable Growth Model measures the maximum growth rate of sales that is sustainable without depleting financial resources. This helps determine whether revenue growth assumptions are in line with profit margins, dividend payout, asset turnover and financial leverage assumptions after the transaction.

POST-ACQUISITION FINANCIAL SIMULATION & RISK ANALYSIS

Buy-Out Plan and DealSense Plus include various metrics based on Free Cash Flow to analyze the returns on Total Invested Capital and Invested Equity. Returns are calculated for both the business entity and individual investor groups. The numbers from the Post-Acquisition Projections are used in the ROI model and whenever the assumptions are changed, the ROI results are automatically updated.

  • Develop a Hurdle Rate for use in evaluating returns on Total Invested Capital and Invested Equity.
  • Analysis of Returns on Investment uses Free Cash Flow from the Post-Acquisition projections. Measurements include Net Present Value, IRR, Hurdle Rate/IRR Spread, Profitability Index and Payback Period.
  • Estimates company value in each projected year for use in the return on investment calculations. The projected value is based on a multiple of projected net-of-debt or debt-free earnings with an option to include or exclude excess cash.
  • Internal Rate of Return is calculated for up to 10 separate investment groups and for convertible debt and exercised options/warrants based on the initial investment, all cash flows over the term of the investment and the value of the investment in the exit period.
  • For each projected year, the Per Share Analysis summarizes the number of shares outstanding, projected total value, per share value, book value per share, dividends per share and simple earnings per share.
  • All cash flows to each investment group, convertible debt and exercised options/warrants are summarized for each projected year.

EXECUTE-LEVEL PRESENTATION AND REPORTING

  • Buy-Out Plan and DealSense Plus include the MoneySoft Financial Report Builder that links the numeric analysis with a pre-formatted report and narrative that automatically documents the analysis for you using Microsoft Word. Buy-Out Plan automatically generates an editable Acquisition Report and Proposal. DealSense includes the Acquisition Report and Proposal and also generates a Business Valuation Report/Appraisal.
  • The Financial Report Builder is “smart” enough to know what analysis you actually performed and describes the results of the analysis. Both the templates and generated reports are fully customizable using Microsoft Word. This eliminates the need for re-keying information or cutting and pasting.
  • Buy-Out Plan contains over 95 supporting schedules that can be printed individually or in user-defined batches.
  • DealSense Plus contains over 150 supporting schedules that can be printed individually or in user-defined batches.
  • Print controls include page orientation, headers and footers, scaling (print-to-fit), and much more.
  • The Graphing function generates pre-formatted graphs and updates them as your data changes.
COMPARISON CHART – BUY-OUT PLAN VS. DEALSENSE PLUS

Buy-Out Plan® and DealSense Plus® both follow the same track for a solid analysis for wall-to-wall acquisition analysis. The difference is in the depth and scope of the analysis. Both systems help you focus on what’s important-making money and creating shareholder value by purchasing a business. This matrix illustrates the differences and similarities between the two systems:

Normalize and Insightfully Analyze Historic Financial Statement Data Buy-Out Plan DealSense Plus
Flexible Chart of Accounts for Financial Statement accommodates up to 10 Years of Data
Input & Adjust Interim Financial Statements
Project “Stub Period” from Interim Statement date until the end of the year
Presents a full set of normalized (re-cast) Financial Statements including Income Statement, Balance Sheet, Statements of Cash Flows, Retained Earnings, Sources & Uses of Funds, and Summary of Earnings & Cash Flow
34 Business Ratios & Summary Common-Size Statements using Normalized Data
RMA Ratio Comparison using Normalized Financial Data
RMA Ratio Comparison using Historic Financial Data
Detail Common-Size Statements using Historic Financial Data
Integra Information 5-Industry Data Comparison for both Historic and Normalized Data
DuPont Analysis with Account Detail
Sustainable Growth Rate with Account Detail
Z-Score Bankruptcy Predictor with Account Detail
MoneySoft Proprietary 5-Minute Diagnostic Analysis
Optional Industry Financial Benchmarking Data Buy-Out Plan DealSense Plus
Risk Management Association’s (RMA) Annual Statement Studies®
Integra 5-Year Industry Data
Financial Projections Based on Current Ownership & Management Buy-Out Plan DealSense Plus
Detailed Annual Projections for up to 10 Years.
Detailed MONTHLY Projections 24 months
Complete Control over each Account Line-Item Assumption
Projected Fixed Asset Disposals, Purchases and Capital Expenditure Financing Annual Only Annual & Monthly
Built in error trapping for monthly / annual account balancing
Tax Reconciliation Worksheet for a more accurate estimate of income tax expense
Valuation Approaches & Methods Buy-Out Plan DealSense Plus
The valuation procedures conform to the rigid standards of Practitioners Publishing Company’s (a Thompson Reuters Company) Guide to Business Valuations authored by Shannon P. Pratt, Jay E. Fishman, J. Clifford Griffith, D. Keith Wilson and Stanton L. Meltzer, recognized leaders in the field of business valuation.
Auto-generates Customizable Fair Market Valuation Report
Available Number of Valuation Methods 10 29
Control Premiums, Minority Discounts & Marketability Discounts
Ability to value Preferred Stock and Minority Interest
Option to apply “Mid-Year” Discounting Convention on DFE and DCF
Available Discount Rate Methods Include: Capital Asset Pricing Model (CAPM), Build-Up Method and/or Manual Input.
“Reality Check” of selected value (includes Rule of Thumb)
Optional Valuation Databases Buy-Out Plan DealSense Plus
Done Deals®/Completed Middle-Market Transaction Data
BIZCOMPS® Small Business Valuation Data
Transaction Pricing, Terms & Structuring Buy-Out Plan DealSense Plus
Metrics to help with Purchase Pricing include:- Compare 10 multiples based upon asking price and buyer’s proposed price- Premium over market value for asking price and buyer’s proposed price- Valuation Conclusion available as reference
Structure an Asset or Stock Transaction
Structure Payments to Seller (Cash at Closing or Deferred)
Allocate Price based upon Tangible Assets, Non-Compete, and Executory Agreements
Include Earn-Out or Contingency Payments
Intangible Asset Allocation (FAS 141)
Goodwill is automatically calculated in an Asset Purchase
Estimate Fixed and Variable Transaction Costs (include in Required Funding)
Determine Cost of Capital and Hurdle Rate
Return on Investment Metrics Based Upon Pre-Acquisition Projections: Buy-Out Plan DealSense Plus
Free Cash Flows to Equity and Total Invested Capital
Net Present Value of Free Cash Flows
Profitability Index
Internal Rate of Return with spread over Hurdle Rate
Payback Period
Post-Acquisition Projections & Analysis Buy-Out Plan DealSense Plus
Ability to create Post-Deal Projections that include Income Statements, Balance Sheets, Statements of Cash Flows, Statement of Retained Earnings and Sources & Uses of Funds.
Detailed MONTHLY Projections Up to 36 Months
Fixed Asset Disposals and ability to include Capital Expenditures and related Financing in Projected Statements
Use Buyer Stock as an Acquisition Currency
Available Funding Options: Revolving Lines of Credit, Short-Term Notes, Long-Term Debt (with Amortization or Direct Reduction Principal, Number of Months to Repay, Interest Rate, Interest and/or Principal Deferral Periods, and Balloon Payments for up to 10 Funding Instruments)
Issue New Shares or Repurchase Existing Shares
Amortization tables for each Note Receivable & Payable
Depreciation schedules for each Fixed Asset account
Post-Acquisition Business Ratios & Loan Compliance
DuPont Analysis with account detail
Z-Score & Sustainable Growth with account detail
Tax Reconciliation Worksheet
Review of Investment Returns (Post-Acquisition) Buy-Out Plan DealSense Plus
Free Cash Flows to Equity and Total Invested Capital
Net Present Value of Free Cash Flows
Profitability Index
Internal Rate of Return with spread over Hurdle Rate
Payback Period
Year-to-year Projected Valuation based upon selected Earnings Multiples
IRR Analysis for up to 10 different Equity Groups based upon exit year and percent ownership
Projected Cash Flow Summary for Equity Groups
Available Reports Buy-Out Plan DealSense Plus
Acquisition Report & Proposal
Valuation Report incorporating AICPA Statement of Standards for Valuation Services No. 1
Number of Printable Supporting Schedules 98 150+

RMA ANNUAL STATEMENT STUDIES

RMA Annual Statement Studies™ is the leading, most current source of reliable performance statistics for small and medium-size businesses.

INTEGRA 5-YEAR INDUSTRY DATA REPORT

With this report you can obtain valuable intelligence about industry financial trends that may impact your performance by analyzing five years of historical financial statements, ratios and growth rates.

DONE DEALS

Completed Transactions is the most comprehensive database of completed mid-market merger and acquisition transactions. The database provides hard-to-find details on actual merger and acquisition transactions for private and public mid-market companies.

BIZCOMPS

BIZCOMPS is perfect for the business buyer or valuation analyst that needs comparable sales data on smaller business transactions. The average selling price of these businesses is approximately $257,000 per business.

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