If you are looking to exit your business in the future you should start assembling a team to assist you in planning and executing the transaction, a team that will enable you to optimize the amount of after-tax proceeds and a team that has experience in the intricacies of a trade sale. Your team should include:
- Tax consultant – not a tax preparer, but someone who is experienced with supporting trade sales who can work with the other members of the team on modeling and negotiations.
- Business broker – a resource that can help market your business to the right people in the correct fashion to help generate as much interest as possible in an auction setting (the preferred method to maximize purchase price).
- Attorney experienced in trade sale transactions
- CFO resource that is experienced in doing deals, facing off with the buyer’s due diligence team and who can help your employees generate the reports and data necessary to give the buyer an understanding of your business.
Don’t just hire anyone, make sure they have the skills and experience and demeanor that is needed for such challenging assignments. A mistake in hiring a team member could result in not consummating a transaction.
A member of our team at Profit Focus CFO has extensive transaction expertise. Vince Leusner has significant experience in mergers and acquisitions, having worked on over 50 transactions in virtually every world region. Some of these transactions had trade sale values up to $50 million and some were as small as $3 million in total proceeds.
In this capacity, he devised and oversaw target identification, negotiation, analyzing the financial metrics of the transaction (ROI, IRR), contract generation, integration and post-acquisition analysis.
His most recent transaction experience was in support of a long-term client that was acquired by a private-equity backed entity for over $20.0 million. The transaction was complex, drawn out and required massive amounts of effort in the area of financial due diligence, especially considering the huge team of due diligence specialists the private equity company assembled.
Vince’s experience can add tremendous value to a solid team of professional’s as noted above and can enable an ownership group to successfully consummate a trade sale, optimize the amount of proceeds to the seller and get the buyer all the information that they need to understand the business so that they execute the sale.