Preparing To Sell a Business?
A key thing to keep in mind is that you will have to open the doors and the books. Take some time to:
- Mitigate business risks, risks where possible
- Increase and/or maintain earnings and cashflow
- Have a succession plan in place
- Be prepared to sell at anytime as who knows when a prospective buyer may knock on your door
Types Of Mergers & Acquisitions
Mergers are two companies combining into one where both owners retain their ownership of the business.
Acquisitions refer to a majority purchase of a target company with a controlling interest.
A minority interest is acquired when a buyer obtains less than 50% ownership and therefore does not obtain outright control of the subject company.
Smooth transactions, better transitions
Maximizing returns on investment and minimizing risk requires planning and preparation. From due diligence, valuation, quality of earnings reporting to assisting with the exchange of information, our team will be there from start to finish.
Failed M&As can be the result of a number of things including a lack of proper planning, cutting corners on due diligence, conflicting cultures amongst companies, and unexpected market conditions etc.
Proper planning and an implementation strategy will help smooth transitions. Though challenges will be sure to present themselves. Some ones to look out for are:
- Employee buy-in;
- Proper introductions, transitions and transfers among suppliers, vendors and customer relationships to new owners/management
- Failure to spend sufficient time required to integrate due to solely focusing on the core existing operations of the target companies, an acquisition is often distracting as it is not a core competence of the buyer or seller.
Typically a merger or acquisition takes between 6 months for the transaction to take place. And an additional 6 months to 3 years for the transition to take place. This usually depends on the extent to which the original business owner is involved in the day to day operations.