The Sale Process

The Sale Process

The business sale process has a number of distinct stages and typically takes 6 to 10 months to complete.

The Business Sale Process

Finding the Right Buyer

Finding the Right Buyer

There are strategic and financial buyers. The best buyer is the one that benefits the most from the purchase.

Finding the Right Buyer

Valuation

Valuation

A business's value is determined by market comparables as well as business specific analysis.

Valuation

working capital adjustment

Working Capital Adjustment in an Acquisition

A working capital adjustment is required when a going concern business is acquired by way of a share purchase agreement.  This is the case for two main reasons: (i) because working capital changes every day as revenues come in and payments are made and (ii), because working capital is easily manipulated in a material way…

Revenue Quality

Revenue Quality: What Does it Really Mean?

Revenue quality is an area of focus for buyers and venture capital/private equity investors.  High revenue quality companies are valued higher than low quality revenue companies.  But what does this really mean and why is this? It is simply a question of risk.  High quality revenues reduce risk and therefore result in a higher valuation. What…

5 Things to Consider When You Receive an Unsolicited Offer

5 Things to Consider When You Receive an Unsolicited Offer

Unsolicited offers tend to come at inopportune times.  While some are actually opportunistic, most come out of the blue when the potential seller is not ready to receive them.  Unsolicited offers for private companies tend to come from immediate competitors, customers or suppliers and, these days, private equity is also actively searching for new platform…

Financial Buyer

What Will a Financial Buyer Pay?

What is a financial buyer and what logic drives their approach to price and structure? A financial buyer is one who is buying strictly for a financial return.  Financial buyers include individual investors, who have either saved up or cashed out, and institutional funds such as Venture Capital Funds, for early stage high growth opportunities,…