Preparing a Business for Sale

Prepping the Princess for the Party: Is Your Business Ready to Sell? Part Four

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Tapping the Broad Universe for Buyers

 

This week on “In Process: Conversations about Business in the 21st Century,” we continue with the next podcast in our series dedicated to the topic of preparing your business for sale. This series leads up to the physical event we are hosting at 5:30 p.m., on Thursday, Apr. 19, 2018, in Atlanta titled, "Prepping the Princess for the Party: Is Your Business Ready to Sell?"  

By many accounts, 2017 was a very successful year for transactions, especially for the community of merger-and-acquisition (M&A) professionals at large. The stars were very much aligned for very positive outcomes with multiple offers occurring for many transactions.

In terms of 2018, most M&A professionals see a continuation of this trend with people being in the market, being ready to sell their business, and, basically, having a series of willing buyers who are interested in this kind of opportunity. It seems, too, there's plenty of money looking for a home, even though we've seen some dips in the stock market recently. Overall, there are a lot of buyers, particularly private-equity firms, looking for good acquisitions that involve smart strategic deals.

In the fourth installment of our six-part podcast series, show hosts Evelyn Ashley and John Monahon speak with FOCUS Investment Banking’s George Shea, partner and IT team leader, and Manan Shah, managing partner and leader of the Government, Aerospace and Defense Group, about how to find the right buyer for a business in the broad universe of prospects. FOCUS Investment Banking is a national middle-market investment banking firm providing merger, acquisition, divestiture and corporate finance services.

“Private-equity groups have so much money right now that they're in danger of having to commit back to their limited partners,” said George. “That means they have to deploy it fairly quickly. We see this as a benefit to all sellers and certainly for investment bankers that represent them. There's a real opportunity for those private-equity groups to outbid strategics for the first time.”

It is critical for business owners to start educating themselves now about valuation and the underlying business considerations that buyers are typically looking for.

“Companies underestimate the need to keep on investing in a good team, a solid management team, along the way,” said Manan. “Often, when owners decide to sell their businesses―but haven't made those investments―they will have a tough time marketing their business or getting the right buyer.”

During the course of the podcast, entrepreneurs, business owners and C-level executives will learn about the:

  • Three categories of buyers along with challenges and opportunities for each
  • Elements that make a business sellable
  • Factors that make a business sellable
  • Factors that business owners should focus on to get ready for their exits
  • Key industries that buyers and investors are interested in now
  • Important role both internal and external research plays in attracting buyers

Learn more about the steps involved with retaining an investment bank’s services by streaming the conversation in its entirety in the player below, or download it to your mobile device via iTunes. Don’t miss a single episode, subscribe to our show “In Process Podcast” on iTunes to receive this episode as well as future episodes to your smartphone.

 

Prepping the Princess: Experts to Speak on What Makes a Business Attractive to Buyers

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With abundant capital, tax cuts and a very healthy merger-and-acquisition (M&A) environment, business owners are in a position to realize significant net cash proceeds from the sale of their businesses.

To help them be prepared for an exit, Trusted Counsel has united with FOCUS Investment BankingH+W | AprioNewport Board Group, Carabiner Communications and Wilmington Trust to present the second edition of “Prepping the Princess for the Party: Is Your Business Ready to Sell?” 

The event, which includes a panel discussion, will take place at 5:30 p.m., on Thursday, April 19, 2018 at The Buckhead Club in Atlanta. CEOs, Presidents, CFOs and Finance Managers for privately-held businesses interested in attending should visit www.preppingtheprincess.com to request an invitation. (If you happen to miss the deadline and are interested in attending a future panel discussion, kindly send us an email through the preppingtheprincess.com website).

According to a 2018 business trends study, more than 40 percent of current business owners are preparing to exit. Yet many are unprepared to sell:  

  • 58 percent have never had their company appraised;
  • 48 percent have no formal exit strategy;
  • 37 percent have no structures in place to shield cash proceeds

“Our first ‘Prepping the Princess’ event was extremely successful and business-exit topics continue to be among the most requested on our ‘In-Process’ podcast, so we felt as though it was the perfect time to bring back this popular event for Round 2,” said Evelyn Ashley, managing partner, Trusted Counsel. “Being prepared for a sale transaction not only gets you increased value from a purchase price perspective but also affects the time you spend in the process, which is rigorous. So, when you're prepared, the credibility with the buyer goes up that much more as well as increases the probability that you will have a successful transaction.”

Ashley added, “It pays huge dividends to get perspective from experienced legal, investment, accounting, advisory, branding, and wealth-management professionals who understand what sellers and buyers think about when going into a transaction.”

Attendees can expect to learn:

  • What makes a business attractive to a buyer?
  • What steps can be taken inside the business to make it more appealing for the sale;
  • How does branding factor into your plan for an exit?
  • How do you know your business is ready for the "Transaction Dance?"

Panelists will include Manan Shah, managing partner, FOCUS Investment Banking; Michael Levy, partner-in-charge, Transaction Advisory Services, H+W | Aprio; Doug Tatum, chairman of the board, Newport Board Group; Peter Baron, founder and principal, Carabiner Communications; Jonathan Fitzgerald, vice president and director of wealth and fiduciary planning in the Southeast, Wilmington Trust; and John Monahon, partner, Trusted Counsel. George Shea, a FOCUS partner and IT team leader, is slated to moderate the panel.

The fee to attend the event is $35, which will be donated to LaunchPad2x.com, a 501(c)(3) organization that provides mentoring and training for future CEOs. Subscribe to our show "In Process Podcast on iTunes to receive all of the episodes of the "Prepping the Princess for the Party: Is Your Business Ready to Sell? episodes as well as future episodes to your smartphone.

Prepping the Princess for the Party: Is Your Business Ready to Sell? Part Two

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Don’t Wait!  Get Your Legal House in Order Now

This week on “In Process: Conversations about Business in the 21st Century,” Trusted Counsel continues with the next podcast in the series dedicated to the topic of preparing your business for sale. This series leads up to the physical event the firm is hosting at 5:30 p.m., on Thursday, Apr. 19, 2018, in Atlanta titled, "Prepping the Princess for the Party: Is Your Business Ready to Sell?"  

Many business owners who have sold a company generally agree that it’s a fairly stressful experience for anyone who's not been through the process before. Sellers typically don't really understand all the complexities, how long it can take, and what actually is involved. While they’re thankful when it gets closed, most sellers don’t relish the overall experience. However, sellers who can get their legal house in order now with the help of good professional support will find the sale process much easier to navigate.

In the second installment of the six-part podcast series, show hosts Evelyn Ashley and John Monahon go inside the firm to speak with two of Trusted Counsel’s law partners, Allen Bradley and Tom Wardell, about the legal side of selling a business―from before a buyer knocks on your door until the final distribution from the sale is made.

“A large issue for a seller is recognizing capital income rather than ordinary income,” said Allen. “Often, when the purchasing price is tied to an earn-out, there can be ordinary income issues. Today there's a 20-point spread in the two tax regimes, so capital gain is very important.”

Unfortunately, sellers often wait to bring in legal counsel once they’ve already gotten a Letter of Intent. That’s a big mistake. Sellers, especially first timers, can benefit greatly from having sound advice not only from the tax perspective but also from the legal side that can help determine the value of a business and identify strengths as well as weaknesses―because those are the things buyers usually focus on.

“There are some fundamental terms within a Letter of Intent,” said Tom. “Price is obviously one of them. Another is the nature of the transaction, for example, is it going to be structured as an asset sale or a stock sale? Will there be a continuation of management. If there are to be down-stream terms, then what are those terms? Sometimes you get further into things like expectations with respect to employment agreements. Usually a Letter of Intent will run two-three pages more or less.”

During the course of the podcast, entrepreneurs, business owners and C-level executives will learn about:

  • Often overlooked legal elements in the preparation process
  • What to expect during the actual negotiations
  • How contracts can be structured
  • The importance of network security and privacy to the sale
  • How and when to communicate customer information
  • Impact of employee incentive packages
  • The concept of escrow

Learn about the steps you can take to prepare your business for a sale now or for the future by streaming the conversation in its entirety in the player below, or download it to your mobile device via iTunes. Don’t miss a single episode, subscribe to our show “In Process Podcast” on iTunes to receive this episode as well as future episodes to your smartphone.

“Prepping the Princess” is an invitation-only event for C-level executives and business owners. The event will provide substantive information on the key elements, which most every business should possess, to make it an attractive participant at the sale dance. For more information on the event and to request an invitation, please go to preppingtheprincess.com.