30 January, 2024
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I often get asked what contributes to the successful sale of a business. Here are some common threads which maximize value, smooth the process and contribute to the most positive outcomes:
- Start Early. For many small and medium-sized business owners, their business is their single biggest investment and its success and growth has been their focus. Getting your business ready to sell is a “journey”, not an event. In addition, taking the time to consider available exit options, tax and estate planning and what other outcomes one wants to achieve, well in advance of any sale, inevitably results in greater satisfaction with the result. Ideally, planning should start more than two years ahead of an anticipated exit.
- Advisors and Communication. Sales benefit from assembling a team of experienced corporate finance advisors, lawyers and accountants and, while it is important that your team have robust M&A experience, temperament and style can be equally important. Professional advisors who are inclined to cooperate and communicate as a team will be of tremendous benefit. Share with your trusted advisors what you are looking for in an M&A team and canvass their input and recommendations. Once your team is assembled, “trust them” and engage in in-depth communication with them so they fully understand your objectives and concerns. By doing so, you will “unlock” the experience and value they bring.
- Get Out in Front of the Diligence Curve. Buyers will undertake extensive diligence investigations of your business, part of which will involve questionnaires asking for disclosure and backup documentation relating to every aspect of your business. Understanding and preparing for this will not only streamline the diligence process and add to the momentum of the transaction, but it will also assist in identifying and understanding factors that can positively and negatively impact perceived enterprise value before engaging with interested parties. Lastly, one’s “Diligence Team” should typically be part of the “Deal Team”.
- Impact on Bandwidth. Business owners who have not been involved in an M&A transaction are often surprised by the time demanded of them and their senior management throughout the process. Anticipating those demands will not only positively impact the transaction itself, but will allow for the implementation of strategies to ensure your business continues to operate at optimum levels throughout the process.
- Finding the Right Buyer. What constitutes a successful sale for owners often involves understanding and feeling confident about the future of their business after it leaves their hands. Different buyers will have different approaches to and objectives for the financing, management and operations of the target. Your M&A team can help you assess buyer objectives, resources and acumen, as well as their temperament and management style, all of which will help to better understand the “hands” your business may be passed into.
At Harrison Pensa, we are committed to being part of your successes. We would be delighted to discuss your needs and how we might assist you with them. The following are a couple of testimonials from some recent transactions:
Sale of Oil and Gas Services Business.
While Scott’s legal, drafting and negotiation skills are excellent, his unique ability lies in being able to put together the pieces of every puzzle I have given him and to help create a coherent strategy for a successful outcome. Scott sometimes describes his process as getting to “yes” and which I have to come to understand is a short form description of his balanced and nuanced analysis as he seeks to understand the businesses involved and the objectives and perspectives of all of the players involved. Scott has always had my back in getting to yes.
Gordon Britton, P. Eng. Integra Technologies
Sale of Custom Cabinetry Manufacturer.
Scott’s expertise and skills in getting to the end goal should not be underestimated. Although at times the copious number of details and work may seem overwhelming, the outcome will result in a smooth, organized and clear path to a sale, one you can literally “Take to the Bank”.
Ron DeWeger, President & CEO GCW Custom Kitchens & Cabinetry Inc.
Be honest and clear articulating your wishes to Scott, and always communicate what you are thinking and feeling. Once you have established the “Road Map” to the sale of your business, sit back and trust that Scott will take it to the “Finish Line”
You won’t regret it!
Scott Spindler is a Partner at Harrison Pensa and leads the Practice Group for Business Law and Financial Services. He was recognized by Best Lawyers™ as Lawyer of the Year 2023 in Corporate Law (London / Windsor), and has been recognized by The Best Lawyers in Canada™ for both Corporate Law and Education Law since 2018.
Image credit: ©Jacob Lund – stock.adobe.com