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

NDA-non-disclosure-agreement

NDA Agreement: Meaning and Sample Clauses

A Non Disclosure Agreement (NDA, also called CA for Confidentiality Agreement and MNDA for Mutual Non Disclosure Agreement) are contracts that stipulate that information received from a counter-party will only be used for the purpose as defined in the NDA.  Meaning, it will not be used as a basis for competitive tactics or shared freely…

earn-out

Form of Payment; Should You Accept an Earn-Out?

Public company take-over bids typically consist of all cash or a combination of cash and shares.  Consideration in private company acquisitions will usually include a sizable portion in cash (50 to 100%) but will often include an unsecured note and/or an earn-out as well.  This is typically because: (i) the buyer does not have (or have…

value

What Drives a Strong EBITDA Multiple?

A higher EBITDA multiple is paid for lower risk, but, the biggest driver in attaining a higher EBITDA multiple is a company’s profitable growth prospects, and, this should already be evidenced by a historical growth record. Let’s look at the public markets for an illustration.  The dividend discount model asserts that the fair value of…

Ideal time to sell your business

The Ideal Time to Sell Your Business

The ideal time to sell your business is when there are positive trends in revenue and earnings with the expectation of more to come.  Growth is very influential in attaining a strong valuation multiple and, while valuation is technically determined by future prospects, historical performance is the most common way to get comfort with those prospects.…

business sale checklist

Thinking About Selling: Here are some Questions to Consider

Selling a business is a complex and life changing transaction.  The following is a high-level checklist to help you determine and communicate your objectives to a buyer. Ownership Do you want to sell 100% or would you be willing to retain a minority stake? Do you feel you could work with a partner? If retaining…