Please allow me to let you in on a secret … entrepreneurs are typically horrible at getting their business ready for sale!! Don’t believe me? Ask M&A attorneys who get the call from their client that they want to sell, and would like the process completed in 4 months.
What about tax strategy? Use of trusts?
Is the corporate structure ready for a transaction? We worked with one client for over a year, just to get the corporate structure in such a form that a transaction was possible. We obtained a great outcome, but front end work had to be done or there was no transaction to be had.
Selling a business is so much more complicated than calling your broker to sell a stock on the NYSE. There are tons of issues to be considered, from legal structure, tax structure, implications of an asset sale vs. a stock sale, employees, minority shareholders, etc. The list goes on and on.
The whole process begins with understanding what our client is truly wanting to achieve.
Want to maximize price, or maximize after tax cash? You’d be surprised how often entrepreneurs want the higher price without regard to taxes, and without taking the time to structure the company in such a way to save a lot of taxes on the sale.
Want to retire, or stay with the business? Sell all your stock, or just a portion? Is there debt in the company? What are those terms on a change of control? Other contracts with change of control provisions?
A little planning, preferably 6-12 months before putting a company on the market for a sale may be the best and most profitable time you’ve ever spent. Let’s start by understanding your wants, desires & needs and then crafting a strategy that we can execute together.
Mr. Villwock has completed over $1.3 billion in M&A transactions. Let’s start with an email to JVillwock@LanierSecurities.com and start a conversation.