We continue looking the M&A Basics series with a look at recasting and succession planning, as well as share errors to avoid when selling your company, the challenges of selling a family-owned business and more. As usual, click on the headline to read the full piece.
“Let’s face it – the equation is not balanced. You will most likely only sell one business your entire professional career. Buyers, especially those working for equity firms and corporate strategics, will make dozens ofin their careers. Because of this, they have the upper hand and can negotiate deals aggressively to their benefit, not yours.”
“Recasting is a VITAL step that needs to be done long before you approach any buyers. If you don’t, you may be understating your true profitability. This could end up costing you thousands and thousands of dollars in lost value.”
“In the M&A arena, a committed seller is one that buyers have confidence in, certainly more than a seller who is not willing to complete and conclude a transaction. The biggest frustration that professional buyers talk about (besides sellers’ unrealistic valuation expectations) is the extremely aggravating scenario where a seller conducts negotiations only to back out of the transaction at the 11th hour due to cold feet, misgivings, or sellers remorse.”
“Mr. Davis outlines seven key activities that, if managed properly, can help alleviate some of the risk associated with the dangers of potentially losing the family legacy during and after theevent. They include: Planning, Redeployment of the assets post sale…”
“A striking 56% of companies assessed say they intend to make acquisitions in the coming year, up from 40% in October … That’s the first time since 2010 that more than half of executives say they plan to make an acquisition in the next 12 months.”
“One of the most important roles we play with our clients is to help them analyze their businesses the way buyers do. A key detail that buyers review when looking at any target is this: If the seller is not going to stay long term after a reasonable transition period (usually 1-3 years), then has an internal replacement been groomed? Is there talent in middle management to assume a CEO role? This is especially critical if the company is dependent on the current owner for most (if not all) important decisions.”
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