MoneySoft's DealSense® Plus+ Helps Business Buyers Avoid the Winner's Curse

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Closing the deal can be sweet for business buyers, but the winner's curse is a bitter fruit. The winner's curse is the economic burden of paying an overly generous price. "The M&A process is set up to get top dollar for the seller. Once the deal is sealed, the buyer is frequently confronted with the reality that the seller has walked away with a large part of the company's future profits," says Robert B. Machiz, President of MoneySoft. (http://www.moneysoft.com)

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In order to level the playing field, MoneySoft has released a new software system called DealSense Plus that was created specifically for business buyers. Analysis, valuation, pricing, financial simulation and Free Cash Flow ROI modeling have been synthesized into a single system. "There are scores of books on how to value and analyze an acquisition," says Machiz. "It can take hundreds of hours to digest the concepts in these books and build a halfway-decent spreadsheet, and then you're the only one in the organization who can make any sense out it!" By eliminating spreadsheets, the buyer is free to focus on strategy, planning and the implications of the numbers.

The valuation component of DealSense Plus was developed with Practitioners Publishing Company (PPC), a Thomson Company. PPC licensed that portion of MoneySoft's technology for sale to the CPA and valuation community under the trade name Business Valuation Specialist™. That same technology is also published by MoneySoft as Corporate Valuation Professional™.

DealSense Plus makes fundamental analysis and valuation more accessible to the buyer. The fair market valuation serves as a baseline when determining the price to be paid for a company. The simulation model takes the price, deal terms, debt and equity funding, and assumptions about how the business will be operated after the acquisition and produces detailed financial projections. The projections and related analyses provide guidance on the company’s bottom line, free cash flows, returns to investors and future health.

A number of built-in sanity checks guide a buyer toward making a deal that's economically sensible. According to Machiz: "If a buyer decides to overpay based upon a strategic imperative, it should be a conscious act made after considering the economic burden being assumed."

MoneySoft, Inc. is a global leader in valuation and M&A software. Additional information can be obtained by calling 800-966-7797 or by visiting the company's website at http://www.moneysoft.com. The company also publishes The Acquisition MarketPlace® Review, the journal of applied M&A theory. An online edition is available without charge at http://www.mergerdigest.com.

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Robert Machiz