To Sell or Not to Sell – That is the Question


Not to diminish the impact of Shakespeare’s version, for most private company owners, considering the sale of their business is a once in a lifetime event, full of emotion, impacting the very essence of their self esteem, family, financial security and community relationships, so they better get it right.

Historically, the level of activity closely tracks the economy and as the stock market reaches new highs and economic indicators keep improving, there is now a large generational transfer of wealth occurring and an owner who has worked long and hard to build a successful enterprise may wish to explore a sale for personal or business reasons .

2014 Promises To Be a Strong Sellers Market

2014 promises to be a strong seller’s market due to the vast amount of cash available for acquisitions from both strategic and financial buyers prepared to pay attractive prices for companies bringing them new geographic footprints, access to new products and services, key management and other synergies. After the recent recession, companies are doing better and the valuation gap between buyers and sellers has narrowed, credit markets have begun to thaw and interest rates remain low This scenario is a  window of opportunity for any company owner.

Selling a Company is a Team Effort

Trying to sell a business without experienced professional advisors, ( lawyer, accountant, investment banker), is a major mistake as an owner running a business does not have the 4-6 months  time available  or expertise to prepare a comprehensive, objective sale memorandum on the company  and identify , qualify ,contact, negotiate and structure a complex sale transaction.
While existing legal and tax  professionals are part of the team, they  need to be supplemented with experienced professionals so as to be on a level playing field and not to  be at a serious disadvantage in dealing with the buyer’s highly experienced  M & A team  .

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Lack of Planning = Failure

The # 1 reason a sale of a business fails is lack of planning.  An owner needs to explore an exit strategy , even though  he may not be contemplating a sale , in order to understand his options and  have the necessary  time to prepare for such a critical event.

As a well established  investment banker  for middle market private companies, HT capital advisors’ role is to provide a full range of   merger, sale, financing valuation services and  carefully prepare a company for a transaction by understanding the owner’s objectives, developing realistic price expectations, negotiating  the terms and conditions of sale most advantageous to the owner, maintaining strict confidentiality to employees, customers and suppliers .

The goal is to  work with the owners’ current advisors and experienced professionals  as a team to prepare a comprehensive , confidential information memorandum on the company, presenting its history, current operations  , financial situation and future earnings potential to attract realistic bids from qualified buyers in the US and abroad acceptable to the owner.

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George Lovato, Jr. is President and Principal of BH Capital Ltd., Merchant Banker, Consultant, Author and Lecturer. Happily married for over 30 years to his childhood sweetheart Gale, they live nestled in the shadows of the Sandia Mountains in Albuquerque with their six hounds.

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