The most critical decision of your business life. Design a Road Map well in advance and utilize skilled professionals to guide you throughout the process.
In my career, we sold our business twice, the first in 2006 from a family owner firm to a private equity firm, and then in 2019, from one Private Equity Owned organization to another.
Planning steps prior to marketing your firm for sale (ideally, 24-36 months before sale)
The Actual Sale Process
The Post Sale Process
Examples of Sale Processes
In my career, we sold our business twice, the first in 2006 from a family owner firm to a private equity firm, and then in 2019, from one Private Equity Owned organization to another.
Planning steps prior to marketing your firm for sale (ideally, 24-36 months before sale)
- Consider upgrading your independent accounting report to an audit, rather than compilation or review
- Create Dashboards, metrics vs Prior, Budget, etc. to track growth over this time period
- Lock in Key employees, managers to contracts, incentives as they are key to maximizing dollars in sale process. Educate these employees on dashboards, processes, procedures.
- Environmental, Safety, Warranty, Inventory Obsolescence review, identifying any possible issues with negative impact
- Complete IT review as this will be reviewed in depth by potential buyers
- Documentation of all processes and procedures for buyers to easily follow
- Decide on your goals post sale. Immediate exit, 2-3 employment with an earn out bonus, plan to lead the firm indefinitely
- All of the above can be achieved by hiring a consultant to guide this process
The Actual Sale Process
- Interview and select an investment banker – Could be the most critical selection of a vendor that you will ever make for your Company and yourself. Hire a consultant to assist in this decision and throughout the process for a complete understanding
- Selection of an attorney with experience in mergers and acquisitions, another critical decision
- Together with Banker identify potential “strategic”(Competitors, vendors, customers) buyers as well as “financial” (often Private Equity Firms”) that would be interested
- Under leadership from Investment Banker prepare financial packages to be distributed
- Selection of top potential buyers and then having them visit for tours of your operation, presentations by you and top management
- Selection of Buyer through review of their Letter of Intents and granting them exclusivity for a short window to review your operation (due diligence period)
- Due Diligence process – review of your documentation and processes you have ready for them and quickly supplying any data not already assembled
- Merger agreements simultaneously being reviewed with attorneys
The Post Sale Process
- Work with employees and acquirers in all integration phases for new policies, financial requirements, IT changes, etc.
Examples of Sale Processes
- 2006 – Led the sale of a family owned business to a Private Equity firm, driving the Planning Steps, the Sale process and Due Diligence to a timely, successful closing of sale transaction. Then worked directly with the Private Equity Firm "post close" with transition and implementation. This Firm held their position with the Company until a sale in Dec 31, 2019 to another Private Equity Firm
- 2019 - Led the sales process working with all professionals from the "Selling" and "Buying" side to bring to a successful conclusion as CFO. Worked post transaction, integrating a new CEO, and modifying reporting and practices as per our new Owner's requirements. Established HR & Operational plans to manage the company through COVID-19 challenges as the Company was deemed an essential business, supplying the trucking industry
