Showing 36 posts in Distressed Businesses, Acquisitions, and Restructuring.
Following up on our last blog, what are the implications for a distressed company of the fact that healthy companies sell at a multiple? Here is the most important one: A distressed company does not necessarily have to come up with a way to pay back all of its debt from cash flow – instead, if the company get enough breathing room to return to health (by cutting its expenses and increasing its revenue), it may be able to work its way into position to use the Valuation Principle to de-leverage its balance sheet. If the company has a good concept and can return to positive cash flow, it has the potential ability to sell, re-equitize, or re-finance. The new money comes based on a multiple of cash flow, instead of a discount on assets, and the result is that the company is able to pay back all of its debts, de-leveraging its balance sheet, and potentially obtaining substantial return for its owners. The new money comes in anticipating the future prospects of the company. So, the key is to move from valuation at a discount to valuation at a multiple, which opens the doors to success.
Price/earnings multiples are common determinants of corporate value in the modern age, and they contain a very important assumption: in public offerings and in the stock market, companies can sell their shares at multiples of what the company is actually worth. People invest in the future opportunities that the company is likely to face. Read More ›
My publisher, FreneticMarket Press, recently offered copies of Distress To Success for free, upon request, to the chapter directors of a national-CEO mentoring organization. As a result, FreneticMarket Press received and fulfilled requests for about 100 copies of the book from the chapter directors across the US, as well as in Great Britain, Ireland, and Singapore; the book has also now reached. . . Italy. (If it crosses the Adriatic to Greece, I’ll try to write a chapter on sovereign debt problems . . . or maybe not). Read More ›
The first book review on Distress To Success has now come out. The review is written by Sid Lambersky of the Tuesday Morning Acquisitions Group, and appeared in The Secured Lender this month. For a look at the review, click here: http://www.nxtbook.com/ygsreprints/CFA/p22022_cfaoct_11/index.php?startid=BB1#/84. Thanks in part to the review, the book is now also available for members of the Commercial Finance Association through the CFA’s online bookstore (www.cfa.com).
A couple of weeks ago, I did a video interview for thestartupslingshot.com about Distress To Success and tips for growing businesses. The interview went live last week, and is available for viewing at http://www.thestartupslingshot.com/startup-slingshot/10-reasons-companies-that-should-make-it-dont-with-bobby-guy/. As a little bit of back-ground, The Start-Up Slingshot is a website that provides tools and advice for entrepreneurs , and airs daily videos from serial entrepreneurs and professionals. The website launched a few weeks ago, and it’s definitely worth a look (whether for my interview or the many others there).
After a short hiatus from the blog, I’m back with the first of the bonus chapters to Distress To Success. Future bonus chapters will be posted on the blog like today, and shortly, will also be available for download from links at www.distresstosuccessbook.com. As described in the book, Distress To Success is intended to remain current through these automatic updates using the social-networking web. Read More ›
For our loyal readers, I want to announce a fall break of about 3 weeks on blog entries, based on some exciting developments with the book "Distress to Success." Read More ›
Theory: The distressed healthcare market is growing and is starting to shed lots of potential deals. Anecdotal evidence suggests that activity is picking up significantly in the third quarter, and there are a lot more deals to be had. Read More ›
Having been a resident of Nashville for 20 years, I found it encouraging that the Wall Street Journal last week designated Nashville as the place to be for health care entrepreneurship. The article featured a number of cities for different industries and is an intriguing read. Read More ›
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Bobby Guy is a member at Frost Brown Todd and practices in the areas of business bankruptcy, workouts and distressed acquisitions. He is recognized in The Best Lawyers in America® (Woodward White, Inc.) for his experience in bankruptcy and creditor-debtor rights law, and has been listed in Mid-South Super Lawyers® in bankruptcy law since 2007.