09 Feb Around the Web: A Week in Summary
A recent Divestopedia article “Stick to Your Guns When Selling Your Business” outlines what a seller should do to ensure they get the most out of the sale of their business, including protection against negatives like re-trading.
Even with the threat of re-trading, or the negotiation of a new purchase price after an initial agreement on price, there are some safeguards that a seller can take to prime their business for a successful sale:
- Set It Up Right
- Use the Best Valuation Method for Your Business
- Doing Your (Reverse) Due Diligence
- Recognize the Warning Signs of a Re-Trade
- (Know When) Enough is Enough
With a case study revolving around one of the author’s own sales, learn how to utilize these techniques to ensure you have the best protection against re-trading and the best shot at a strong, successful sale.
Another recent Divestopedia article entitled “Key Factors in Executing a Management Buyout” examines the process of a Management Buyout (MBO), where a business is not sold to an outside investor or handed down to a family successor, but sold to a member of the existing management team. This type of sale provides advantages to the seller, the new owner, and the economy in a way that benefits all parties involved in both the monetary and emotional aspects of the sale.
The key factors involved in an MBO include the willingness of the owner to sell, the seller’s desire to sell to a manager and not an outside party, the viability of the business to be externally financed, and the capabilities of the buying team to successfully run the business. More important points to consider are the fact that this transition of power usually happens in the years leading up to the transaction in order to prepare the buyer for the new responsibilities of the business, the tax implications on the seller, and the financing abilities of the buyer, among others.
The article “4 Reflections on M&A in 2016” recently published on Axial.com explores four trends experienced in the field of mergers and acquisitions in 2016. These trends include extreme variance in valuations, the continuing down-market movement of PE activity, the presence of “fundless sponsors” in the market looking to make improbable deals, and the improvement of financials in the market.