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HC Marketing [Shared]

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by

Ali Alatas

on 24 May 2016

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Transcript of HC Marketing [Shared]

Virtual Mergers
Can you see the benefit of a listed company buying a private company?
"Most private companies (not listed on the stock market) sell for a multiple of between 3 to 5 times profit.
Listed companies are typically valued at around
15-20
times profit.
3-5
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If it only has to pay 5 times the profit to acquire it,
but is worth 15 times more in return...
There are a lot of companies with perhaps 1 or 2 million in revenue... what happens if you stick 5 or 10 of these together?
1-2 Millions
Yes, you guessed it... you now have something these larger companies want to buy from you.
5-20 Millions
How to merge and sell multiple businesses in one deal without even having to own them?
A new breed of entrepreneur figures out how to merge and sell multiple businesses in one deal without even having to own them - (while taking a risk-free 7 figure commission in the process). The only question is... how can you do the same?
A merger technique called “Virtual Mergers” coined by serial entrepreneur Jeremy Harbour allows anyone with a bit of free time to structure a 7 figure risk free deal. So how do Virtual Mergers work?
The beauty of virtual mergers lies in their arbitrage between the private sale value of a business and the publicly listed value of a stock.
To make the comparison easy, let's talk about a business valuation model called “price earnings ratio” or “P/E Ratio” for short. How does P/E work?
P/E
P/E works simply by taking the profit of a business and multiplying it by a number. A multiple of 5 for a company with £100,000 in profit would mean the business is worth £500,000. So what multiple is a normal company worth?
Most private companies (not listed on the stock market) sell for a multiple of between 3 to 5 times profit. Listed companies are typically valued at around 15 to 20 times profit.
Can you see the benefit of a listed company buying a private company? - Yes, that is right. If it only has to pay 5 times the profit to acquire it, but is worth 15 times more in return... that is very easy money for the shareholders. Why don't the listed companies just buy up everything?
Well, they already do... it's exactly how all large companies grow. They are pretty good at doing it. Except they typically won't look at anything less than 10 million in turnover. Why? Because of the high due-diligence costs involved. How can we exploit this fact?
This is where “Virtual Mergers” comes in. As you are probably aware... there are a lot of companies with perhaps 1 or 2 million in revenue... what happens if you stick 5 or 10 of these together? … Yes, you guessed it... you now have something these larger companies want to buy from you.
Is merging the companies messy and complicated? Yes it is. This is why Jeremy's virtual merger strategy is basically only a “merger on paper”.
Using consolidated accounting principles, a cheap SPV and a simple contract template you have everything you need to set up a deal.
You simply have to get your client companies (the ones who want to be sold) to agree to sell if you find a buyer (hence the contract). You now have a  10 million revenue company on paper that you can go out and sell.
If you are feeling more ambitious you could also do an IPO and list the group of companies on the stock market yourself.
Luckily for you, Jeremy Harbour has agreed to share a free video case study that explains the virtual merger strategy in more detail. Who is Jeremy?
Jeremy has experience from buying & selling over 50 small to medium sized businesses in the past 20 years. He has featured in The Times, Telegraph & Financial Times newspapers. He also teaches about mergers and acquisitions in his “Harbour Club” workshop classes which have been running since 2009.
To get the free video on how to structure a “Virtual Merger” deal email Jon at:

jon@harbourclubevents.com

and mention this video in the email
This still leaves a lot of questions to be answered... like how to find a buyer for your newly created virtual merger? How to find and convince the client companies to work with you? How to list a company on the stock market? How to structure the deals so you get a 7 figure pay off? And of course many more.
Merger & Acquisition Strategies
Full transcript