Even if you have sold a company before, and especially if you haven’t or you are running a larger company, there are individuals who have much more expertise with the M&A process than you do. At a minimum, you will want a lawyer who has extensive M&A experience to represent and assist you. There are numerous terms in the various legal agreements that form part of the sale process that could have potentially huge ramifications on the outcome.
Another critical advisor who you want by your side is someone to guide and assist with the sale and negotiation process. In some cases that will be an investment banker; in other cases, it will be a trusted Board Director or Advisor to the company who has prior M&A experience. Due to the fees they charge, investment bankers typically make more sense for enterprise values in excess of $25M. Directors and Advisors who have prior experience in M&A, on the other hand, will likely be more than sufficient to meet the needs of many companies.
In some cases, you may want an external accounting team to assist your CFO and Finance team. Audited financial statements will increase the company’s credibility to prospective acquirers, though the specific audit requirement of full, review or notice to reader will depend on the size of the company. Aside from the professional advisors, significant shareholders such as a founding CEO may also wish to engage the services of a tax planner to assist with personal tax planning.
Irrespective of who you choose as your expert advisors, you want to build a good relationship with them well ahead of the time when you actually need them. The sales process inevitably brings with it high levels of stress and anxiety, and you want to know that you can truly count on your expert advisors. The further in advance of the sale process that you can identify and start to form relationships and work with your advisors, the more you will trust and rely on them when you really need them.
Next in series: ,,R – Always Be Transaction Ready
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