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

How long does it take to sell a company

Business Sale Time-frame (with milestone chart)

How long does it take, and what are the steps in selling a business?  Selling a business requires careful planning—everything from cleaning up the books and tax records to updating old operating systems—even ramping up marketing to accelerate sales to be able to command a higher asking price. All too often, an unexpected factor—an aging…

business due diligence

What is Due Diligence and What Does it Entail?

What is the Due Diligence? Due diligence is an investigation of a business or person prior to signing a contract.  More specific to a business sale, business due diligence is the process of verifying the representations made in the CIM and other marketing materials provided to the potential acquirer by the seller.  For example, in…

Mergers and Acquisitions

M&A Acronyms, Abbreviations and Definitions

Merger and Acquisition Acronyms, Abbreviations and Definitions. Whether a transaction is defined as a merger or an acquisition is determined by a number of accounting tests.  Simply put, both parties in a merger need to meet a number of equality tests and, when met, transactions classified this way can be more tax efficient.  Because of…

Winners Remorse

Buyers Remorse: Does the M&A Process Lead Buyers to Overpay?

Buyer’s remorse, also called winner’s remorse is the realization that you have won an auction by paying more than anyone else was willing to pay.  Does winner’s remorse mean you have overpaid?  Not necessarily.  When managing a company divestiture, there comes a point when interested parties are requested to provide non-binding expressions of interest (called…

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.…

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…

Normalization Adjustments

EBITDA: How to define and measure

EBITDA Normalization Adjustments: Where do you stop? For public companies the most noted multiple is that of after tax net income (a PE multiple).  For early stage companies it is quite often a multiple of revenues because, either they are not profitable or, they are in a high growth phase, where profit levels are depressed…