Author

Steven Abbate

Steven Abbate is managing director of Cetane Associates, LLC, a provider of hands-on merger and acquisition advisory services for privately held companies. He may be contacted at [email protected].

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  • Public Policy

    The Biden Effect On Sale of Business Assets, Taxes

    By Steven Abbate… There is a lot of discussion of how a Biden presidency would affect business taxes and after-tax payouts on the sale of business assets. While we can’t project the future, especially where politics is involved, we can make some educated guesses. There was a recent article in the Wall Street Journal, titled “Read Joe Biden’s Lips: New Taxes.” The article went on to highlight Biden’s proposal for increasing taxes on high-wage earners and businesses. The No. 1 item that caught my eye was his proposal to eliminate the favorable capital gains tax on the sale of a business and to instead have the income be taxed as ordinary business income. This tax modification, coupled with an increase in the top corporate tax...

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  • Feature Articles

    Competing For Acquisitions: David and Goliath

    (April 29, 2020) — Large and small companies looking to acquire propane companies each have their advantages and disadvantages. Large companies typically have good financial resources, a dedicated acquisition team, and advancement opportunities for employees. Smaller companies typically offer more employee input in decisions, fewer operational changes, and more flexibility regarding company policies. LARGER MARKETERS DOMINATE While both large and small have their advantages and disadvantages, larger marketers dominate the acquisition market. Small or mid-size marketers competing for acquisitions against large multi-state marketers, can face some challenges. Understanding and improving on acquisition capabilities is one area a smaller acquirer should focus on. Knowing your competition and what they can and can’t offer is another important aspect. Ultimately, the decision is in the seller’s hands, so...

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  • Feature Articles

    Driver’s Wages…How They Affect Your Business Value

    (September 30, 2019) — With the national driver shortage in full swing, we are seeing upward pressure on wages. There are many articles that can be written on the driver shortage, however, as our focus is on business value, we will stick to the effect on value. Over the last two years, we have seen driver wages increase by as much as 10% annually. Companies are offering signing bonuses, low- or no-cost medical coverage, and other enhanced benefit packages. These increased costs all come out of owners’ pockets and as a result, without offsets, earnings and value have been decreasing for many companies. To understand the value aspect, I want to recount a story from a transaction I worked on 12 years ago. I was...

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  • Feature Articles

    Tips for Performing a Financial Physical

    Every year brings new challenges to retail energy marketers. For propane marketers this past year has seen the cost of tanks skyrocket and the pool of qualified CDL drivers shrink with upward pressure on wages. Natural gas competition continues, and heat pumps and geothermal remain a threat to market share. So, what’s a propane marketer to do? A good place to start is in understanding your financial results. The four basic areas of a financial analysis are revenues, cost of goods sold, operating expenses, and capital expenditures. Because we are in a commodity-based business, we like to look at gross profit (GP) as it is better to analyze trends in GP than revenue. Gross profit We define GP as what you sold the propane to...

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