Covid-19 Relief. $1.9 TRILLION of spending from the COVID Recovery legislation presents an unprecedented opportunity for business owners. Your customers will be flush with cash. The economy will be booming. And if you apply your resources, the value of your business can climb to its highest levels ever.
Examples of Janas clients who took advantage of recovering economies:
Molding International & Engineering, Inc., an automotive insert molder, engaged Janas to prepare a Strategic Plan. JANAS recommended that the company take advantage of rapidly declining costs by employing flexible robotics and for the principals to change management positions. Four years later, Janas sold the company for triple the original JANAS valuation.
Anzon, an osteo-implant manufacturer, lost business to Europe as the US dollar strengthened after 9/11. JANAS helped slim down operations and increased capacity in advanced machining. The business became a big money maker when work returned from Europe and the osteo-implant market exploded. With improved implant technology, sales tripled, and earnings and transaction value increased 5-fold.
Crush Creative, a grand format printing company, was acquired from a financially troubled predecessor. JANAS worked with the operating manager backed by a group of individual investors. The company targeted innovative owners to advertise and grow their businesses. Four years later, JANAS sold Crush for a 10X return on the original invested capital.
MIE, Anzon, and Crush were all companies that seized one-time opportunities. The US economy had begun to recover from a devastating recession. JANAS perceived of 2021 as another opportunity to take advantage of weakened competition from the COVID-19 pandemic. Transformational work and lifestyle changes combined with a large labor pool can transform your business.
USE YOUR IMAGINATION AND ENGAGE JANAS TO SUPPORT YOUR GROWTH!
|Janas has studied the post COVID-19 Boom Economy expectation and is publishing a Series of Newsletters to address various actions that could have significant impact on Middle Market Companies. Our Series 101 will reveal previous tactics supported by Janas and used by our clients. Our purpose has been to take maximum advantage of the Economic Cycles of past decades to amass fortunes for Janas clients.
Each era held different opportunities—but all required a vision of what future actions companies and their owners must adopt in a changed world. Owners rarely retire at age 65, a mantra of the past. Older owners must consider how the New Economy and The New Federal Administration can impact their lives.
INCOME TAX CHALLENGES
Now that the Biden Administration is in office and is active, change is in the wind. When new Federal Administrations come to office – particularly when the Political Party in power changes, income tax policy change follows. During the last four Federal administrations, Tax Law changes have required an average of 502 days for passage post inauguration.
New Tax Rates
The Biden Administration has indicated a plan to increase taxes. For Long-Term Capital Gains, the proposal is to increase the rate from 20% to 39.6%. New rates are unlikely to apply through the end of 2021 and possibly into the first quarter of 2022. Income Tax laws are generally not retroactive. Under current tax law, the Federal Tax for each $10.0 million of Long-Term Capital Gain on sale of your business will be $2,000,000. Under the proposed new rate, the Federal LTCG tax would be $3,960,000, reducing the net cash to owners at transaction closing of $1,960,000 per $10.0 million of LTCG.
Impact on You
If you are a mature owner planning to invest the proceeds from the sale of your company, the New Tax Rates discussed above would certainly be negative. In future issues, we will discuss alternatives to sale of your company and how to benefit financially while enjoying your lifestyle – work, play – or both.
Please contact one of our professionals to discuss
– on a non-fee basis –
basic issues that are of vital importance to you and your family.
Lynne Koplin has joined the firm as a senior Management Consultant. Her focus is on the Fashion Industry. Lynne has a vast knowledge of all aspects of building apparel brands, from product inception to sourcing, operations, marketing, and retail.
She understands the initiatives that fashion companies should pursue. Brands must be relevant, and companies must be operationally prepared for the future.
Her focus at Janas is to consult with companies in the Fashion Industry that are experiencing the dramatic effects of the Coronavirus pandemic. Technology has clearly changed Retail and the consumer is now in charge. Many companies, both large and small, were caught unprepared and are trying to catch up with investing in their Ecommerce platforms. She has run companies for the past twenty years that have had to do just that. She knows the challenges that companies face today and can assist in all aspects of transformation.
Lynne’s goal as a senior executive and as a Management Consultant has been to maximize client company expertise and deliver profits in all tiers of distribution. She develops increasingly diversified supply chains and astute design and marketing strategies.
Lynne has enjoyed a storied career in the Industry:
• Initiated her career with Federated Dept Stores.
• Built a strong foundation in merchandising with Burdines, Marshall Field & Co and I Magnin.
• Transitioned to wholesale and was mentored by Anne Cole, a legendary icon in the women’s swimwear business in Los Angeles.
• Invested more than 20 years managing dynamic swimwear brands that commanded more than 30% of the Swimwear segment market share.
She served as President of Tommy Bahama where she built a successful women’s business model within a menswear culture.
Lynne spent five years expanding the True Religion DTC business into a global, premium denim market powerhouse. As CEO, she worked with Guggenheim Partners to sell True Religion, then a public company, to a Private Equity Group.
She subsequently became President at JBrand, then a division of Fast Retailing. She expanded the business internationally and sustained brand awareness that continues to drive the global wholesale and e-commerce sales platform.
Lynne understands many phases of the Industry and applies that knowledge to her clients.
Juliette Harrhy, an experienced M&A attorney, has joined Janas as a Managing Director. Her storied career with Hahn & Hahn, Kirkland & Ellis and Alston & Bird has focused on buy-side and sell-side transactions, representing Corporations, Private Equity Funds, Family-Owned Businesses and Individuals.
Juliette is joining Janas to apply her extensive background to focus on business strategies, due diligence, and family transition issues. Juliette has almost 30 years of experience with middle market transactions, in both in the US and Europe. She has observed that many clients would benefit from pre-sale advice to maximize the benefits of their contemplated transactions. As an Investment Banker, she brings an in-depth understanding of buyer and seller motivations, as well as knowledge of the legal issues that could prevent sellers from maximizing the return from their sale transactions.
Her legal practice included cradle to grave corporate counseling with a focus on transactions. She has led teams on purchase and sale matters with values from a few million dollars to more than $1.0 billion.
Juliette’s experience enables her to balance client priorities. She advises clients about the complexities of the legal process which require balancing seller and buyer requirements to complete mutually satisfactory transactions. Her expertise streamlines and expedites the sales process for clients and anticipates issues that she solves proactively.
Her legal career began in London, with a mid-sized law practice where she focused on corporate matters. Upon moving to the US, she was a member of the Financial Services Group at Alston & Bird, an Atlanta firm with offices in Los Angeles and other cities.
During her tenure as a Partner with Kirkland & Ellis in Los Angeles, Juliette represented Private Equity Groups in buy-side and sell-side transactions in the Consumer Products, Industrial, Medical, and Food Products Industries. She also has expertise in transactions for distressed businesses, including bankruptcy. Her clients included troubled companies in Energy, Telecommunications, and Food Service.
Juliette’s experience in working with clients of different types and sizes, operating in diverse fields, makes her adept at understanding client objectives. She understands ‘telling client company stories’ to enhance M&A and Consulting results.
Office: 626-432-7000 Cell: 323-828-1769
JANAS Managing Director Steve Boehm received a Certificate of Achievement from JANAS for his dedication to the completion of the sale of Western States Glass, Inc. Achieving a closing during the Pandemic was particularly challenging.
Steve, and other members of the JANAS TEAM, served the shareholders diverse interests and fulfilled the JANAS reputation for persistence to achieve a closing.
Testimony from Seller Legal Counsel:
“The real hero was Steve Boehm who did an extraordinary job managing a very difficult situation. He is the consummate professional and a top-flight Investment Banker – careful, thorough, and conscientious. Steve has great client relationship skills.
I am very much looking forward to working with Janas and Steve in the future.”
I do not know anyone else who could have helped walk our clients through such a very difficult situation to a successful conclusion.”
John W. Schwartz, Esq.
Principal, The Law Offices of John W. Schwartz
JANAS has adapted its service offering to address issues resulting from the Novel Coronavirus Pandemic. New services include:
Due Diligence Management. Because of travel restrictions and health concerns, the firm offers in-depth Due Diligence services to support transaction closings without delay.
Manufacturer Issues. Manufacturing inefficiencies occur in good and challenged economies; however, the uncertainties of the Pandemic have enhanced those challenges. JANAS consultants can identify and correct manufacturing deficiencies and timely product delivery problems.
Crisis Management. Firm professionals are adept at helping companies and their legal counsel resolve solvency issues. Our services include Bankruptcy advice and Assignment for Benefit of Creditors. We understand company insolvency and how to manage related issues.
141 S. Lake Avenue, Suite 102, Pasadena, CA 91101-4757 USA
SERVICES TO PRIVATE EQUITY PORTFOLIO
MANUFACTURING AND DISTRIBUTION COMPANIES
Janas Consulting, Inc. is proud to announce the additional of David Adler as a new professional to the Janas Team. During the operational challenges related to the Pandemic, David brings experience to manufacturing and distribution clients who need skilled support during this difficult and challenging time.
David is a proven interim CEO and Efficiency Consultant. Trained by the author of Six Sigma, David adds value to both Public and Private Manufacturing and Distribution companies. He executes Best Practices with the tools that a client has at hand.
David has performed more than SIXTY ENGAGEMENTS for Private Equity Group portfolio companies that engage in Manufacturing and Distribution and need a fresh perspective provided by a trained and experienced Executive Consultant. He has provided services to several Divisions of Safran Aerospace, TriMas Aerospace, Honeywell, GE Aerospace and Kellstrom Defense. David turned a division of Beacon Industries from “worst supplier” at UTC to “Gold Supplier.”
David resides in Southern California. He is available to serve clients Worldwide.
If your Portfolio Manufacturing Company
is experiencing operational and profitability challenges,
contact David Adler to set up a ZOOM call.
141 S. Lake Avenue, Suite 102, Pasadena, CA 91101-4757 USA