How often have you been involved in a merger or acquisition?
For most people it’s never – and for a few its once, with fewer yet more than once. Very few people have been involved with several acquisitions on the buy side, and an order of magnitude fewer have been involved in several acquisitions on the sell side. So when you are considering a life change that includes selling your business, there is a lot you don’t know, just like when you purchased or sold your first house – much of the process is a bit mysterious. So selling your business is definitely one of those times you want to engage a professional who has been through the process several times before – and has seen what works, what doesn’t work, and what to watch out for.
- Do you sign that “do not shop” agreement before talking to a potential acquirer?
- The potential acquirer is also a large potential competitor – how much do you let them know/see?
- How do you value a cash+stock offer versus a competing all cash offer?
- Should you agree to the 5 year non-compete clause – that with a 3 year employment contract can have you sitting around for two years "cooling your heels" unable to use your skills?
- What do you tell your employee’s about the employees of a partner or competitor asking detailed questions about your business?
- Do you need to restructure your business to make it more attractive (increase its value) to a suitor?
- How do you avoid losing key employee’s during the uncertainty of an acquisition?
- What happens if the deal falls through at the least minute?
- What is the likely tax bill – and what can you do to minimize it?
You may only ever sell a business once in a lifetime, and you have many years of your blood, sweat and tears invested.
You sure don’t want to muck it up.
So this is another one of those times you want to get professional help, and this is not the time to pinch pennies, or depend upon a friend or relative that doesn’t have the deep expertise and experience in M&A you really need. You want and need someone very experienced and real good.
So how do you find a good M&A Consultant?
This may sound like a broken record, but once again it’s about checking references. You need to take the time to talk with several business owners that the Consultant helped sell their business – talking to people that were in the same potentially stressful and highly emotional position you are in. Along with helping you verify you have a great M&A Consultant, talking to other people that sold their business will giove you the confidence you'll need to get through the whole - sometimes messy - process.
What is it going to cost?
These M&A Consultants don’t come cheap – but if they do their job well you can potentially get 20%, 40%, 60% or 100% more for the sale of your company than if you “did it yourself”.
One M&A Consultant I am familiar with – that has been on both the selling and the buying side a number of times – and has deep understanding and relationships across the design and engineering software industry - is Ascentage Group.
So that wraps up “Should you call the Doctor?” set of postings. I hope you find it of value! Don’t be bashful dropping me an email – or contacting any of the companies mentioned if you want to kick some ideas around but are just not sure. Calling in a Doctor – putting you on a path to potentially having to make some hard decisions – is bound to make anyone nervous.
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