As noted in Dastardly Buyer Tricks (Part 1), negotiating the sale of a company is often tricky — and negotiations tend to become more challenging throughout the course of the transaction as the balance of leverage tips from the seller to the buyer. The negotiation process can become particularly fraught with land mines if the buyer begins to make extreme or unreasonable demands, pulling what we call “dastardly buyer tricks” in an attempt to “get a leg up” on the seller.
On both sides of the negotiating table, there is give and take throughout the process until both the buyer and seller are mutually satisfied (or dissatisfied as the case may be) with the outcome.
We have been fortunate to enjoy one of the country’s longest periods of economic growth on record. However, every economic boom must inevitably go bust. That means we can likely expect a recession at some point in the future, even if we cannot say with certainty when it will happen.
As investment bankers, we often find ourselves in the position of teaching our clients about how to sell their company. One of our (many) jobs is to dispense valuable advice to sellers with whom we work throughout all stages of the sale process.
It’s that time of year again: the time to make New Year’s resolutions. Perhaps your goals for this year include achieving better physical and mental wellness, or reading a certain number of books, or traveling to a once-in-a-lifetime destination.
The odds may not be as overt as betting on a football game or the likelihood of it raining today, but most conscious decisions ultimately come down to a gut instinct about the required action steps to achieve the desired outcome.
Is the business owner willing to consider reinvesting in their company post-sale? We often ask this obvious yet important question early in the sale process.
Owners who have spent much of their life building a business may have a difficult time envisioning what comes after they sell their company. Of course, there are plenty of action steps and issues that the owner should consider undertaking well in advance of considering the sale in order to realize the dream of a successful exit.
The working capital target concept is fairly common in M&A transactions. In fact, we have experienced this concept in nearly every transaction that we have participated in over the years.
These are the recommendations we find ourselves imparting repeatedly to the sellers with whom we work throughout the sale process. This advice is not only universal, it is timeless. While we don’t have a trove of words of wisdom ready to share with sellers at a moments’ notice, these encompass the recurring ideas and guidance that we have consistently shared with sellers over the years.
Here are the second five of our 10 attributes of a great client, in no particular order.
As in any business, we have encountered all different types of clients and come away from completed and failed transactions having learned some valuable lessons about their personalities and how they conducted themselves during the sale process.
Owners who are serious about selling their company have a specific reason for embarking on the sale process.
Evaluating a buyer’s intentions is a lot like playing poker, but most buyers provide certain signals that give away whether or not they are truly serious about purchasing a company.
There are always events that inevitably happen during the course of selling a business that create bumps in the road.
Recessions are an inevitable part of the economic cycle. However, no one can predict with any certainty when a recession will happen — only that a recession will inevitably happen.
This is the second installment of our series on advice we find ourselves imparting to owners time and again before and during a sale process.
We often recommend to owners that they build a business with the intent that it will last forever. In other words, the owner should not take shortcuts while running their company, and always do what is best for the company with the long run in mind.
When owners contemplate the sale of their business, they have a lot to ponder.
Working with owners both prior to and during a sale process, we find that we offer some of the same advice over and over again. It’s not like we have a list that we keep handy to spew this advice. It’s just that similar concepts repeatedly arise that lend themselves...
Business owners know a lot about their companies, right down to the minute details of their day-to-day operations, customers, marketing, payroll and personnel….
A key task that must be completed early in the sale process is developing a buyer list. However, compiling a list of qualified buyers is more complex than it may seem.
Sellers often ask if they should hire an investment banker to represent them in the sale of their company. The role of the investment banker tends to be somewhat abstract. Many sellers do not quite understand the role of the investment banker when they engage one to...
We have written previously about the four phases of a company sale: Phase I: the Diligence Phase, Phase II: the Marketing Phase, Phase III: the Management Presentation Phase, and Phase IV: the Buyer Due Diligence and Documentation Phase. In this article, we will...
One of the inevitable, but necessary challenges that sellers must confront during the sale process is the buyer’s due diligence phase. This occurs during Phase IV, or the final stage of the sale process.
We have all heard the popular phrase “caveat emptor,” which means “let the buyer beware.” When it comes to negotiating an earnout in the sale of a business, a more appropriate adage might be “let the seller beware.”
Selling a business can feel like a slog and a sprint all at the same time. The natural momentum of a deal may start out slow, then pick up in pace and proceed full steam ahead, like a bullet train traveling at top speed.
They say timing is everything. When it comes to selling a business, the idea of “timing” can take on several meanings.
Perhaps you are resolving to take better care of yourself, read more books, slow down, and spend more time with family in the coming year. While you are in the mindset, here are six resolutions for 2019 to help steer your company toward a successful future
Timing the sale of a company to achieve a seller’s objectives is tricky, to say the least. Timing can be a business owner’s greatest ally or their worst enemy, and it is usually the latter.
In short, a virtual data room (“VDR”) is a secure online repository where key company documents are stored for easy access by buyers and their team of advisors.
As we discussed last time, selling a company is a lengthy, complex process.
When preparing to sell their company, business owners always ask: what is involved in the sale process and how long will it take?
Selling a company is often about more than hard facts and figures. At the end of the day, buyers and sellers are people; as such, every deal has a “human side.”
Owners want to present their company in the best, most positive light; however, there is a fine line between promoting a deal to make it attractive to would-be buyers and half-truths…
In the transaction world, buyers quickly react to an acquisition opportunity based on their acquisition criteria and much more!
What are the tell-tale signs that the would-be buyer is serious about purchasing the company?
Consider this scenario: You receive an unsolicited inquiry from the ultimate buyer for your company. This buyer represents the best business fit, is informed about your company’s products and markets, can justify the highest price, and has a high likelihood of closing.
Fair market value is defined as the price at which a company would change hands in a transaction between a willing buyer and a willing seller, both being reasonably informed as to all the relevant facts about the business, and neither party being under compulsion to buy or sell.
Business owners are encouraged to consider their entire personal financial situation when considering the sale of their company. Often the value of the business is the owner’s single largest asset.
While these efforts can add value to your company, one of the best ways to add value is to prepare your company for sale now so that you can sell it when the stars are aligned.