After reading John Warrilow’s column in the Globe and Mail last week (see link below), I was inspired to re-enforce the importance of retaining professional expertise when consummating the sale of your company.
As John describes, there are many benefits to hiring an Mergers and Acquisitions (M&A) professional to sell your business. I have been an M&A professional for more than 15 years, involved in the purchase and sale of close to a 100 companies in both private and public markets. Emotions during this process run wild, no matter how large or small the company.
The selling of a business adds incremental stress and wild swings of emotion related to the inherent ‘ups’ and ‘downs’ of the process. This is felt not only by the owners of the company but by all employees due to the inherent uncertainty of their jobs. These distractions and emotions can hurt the existing business operation. However, a good M&A professional will manage the entire process, thereby reducing stress levels allowing owners and staff to focus on what they do best, which is running their business.
The sale process typically takes 60 to 120 days, depending on the organization and motivation of the buyer and seller. This does not include the initial ‘courting’ phase, which is usually greater than the time period needed to execute the transaction. An M&A professional will manage these stages from A to Z including; but not limited to the following:
- negotiating the letter of intent which outlines details of the transaction up front thereby managing expectations of all parties
- management of the entire sale process (due diligence, drafting of legal documents, tax structuring, etc.) to ensure that all constituents such as the buyer, seller and other professional advisors are moving efficiently and addressing issues in a timely and professional fashion
- integration planning with both sides to ensure the transition is as smooth as possible. NOTE: this is where the success/failure of many transactions occur
- closing the deal and handling post-closure items.
Overall, the process requires time, dedication, fortitude and an ability to remain emotionally resolute. It is difficult for any business owner to dedicate the time required to run their business; therefore, to execute the M&A process successfully at the same time is nearly impossible. As John so aptly put it… it is not a Do-It-Yourself Project!
See also: John Warrilow, Selling a business is not a DIY project.
Ken is the acting CFO for K&K Recycling Services, a Pickering, Ontario-based ferrous and non-ferrous scrap metal processing, brokering and recycling company operating in Canada and the United States. He is also a founding partner of Growth Equity Partners whose focus has been to support small to medium-sized private and publicly listed companies execute transformational business initiatives since 2001. Visit www.growthequitypartners.com