Managing the sale
All questions are for general guidance only. Each case must be handled on the individual facts.
Q: I run a small business and am looking to sell to a competitor, but I’m concerned that I won’t have enough time to handle all aspects of the deal while still running my business. How do other companies manage to do this?
Managing the sale process is often a matter of concern for smaller businesses that may not have the management infrastructure to cover such an important project. It is vital that any owner-manager does not get so distracted by the sales process that the trading performance of the business deteriorates. At best this may depress the final sale price of the company and at worst the whole sales process may be undermined leaving you with no sale and a less valuable investment.
For this reason, shareholders often retain a specialist corporate finance adviser to project manage the sales process. The advisory firm should have the resources and experience to handle all aspects of the sale, from researching buyers and preparing the sales memorandum to negotiating the deal and managing the legal and due diligence process.
When choosing an adviser there are three important questions you should ask:
1. Do they have the right skills and experience? Your long-standing and trusted accountant, lawyer, or IFA may not have the specialist knowledge and deal track record needed for this particular project.
2. Do they have adequate resources? A one or two man outfit may not be able to give you the support you need at key points in the deal if they are juggling several assignments at once.
3. Are they brokers or corporate finance advisers? A broker will advertise the business and handle initial enquiries but may not have the technical skills, knowledge, and resources to negotiate the deal and manage the whole sales process.
A good corporate finance adviser should be able to add value to the transaction many times the amount of his fees.
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