Top 10 Mistakes to Avoid When Selling Your Company

Provided by Karl E. Block, Partner, Loeb & Loeb LLP

1. Not having a lawyer with experience in mergers and acquisitions.
2. Not having a tax lawyer and estate planner to advise you on pre-sale planning and the tax aspects of any transaction.
3. Not having a qualified advisor or investment banker to assist in the sale, including whether to have an auction.
4. Not having audited financial statements prepared by a reputable CPA which credibly and transparently describe the financial condition of the seller; not having forecasts available to the buyer with respect to how the seller believes the business should perform in the future.
5. Not having due diligence documents readily available.
6. Attempting to sell in a buyer's market.
7.  Not focusing on covenants not to compete for the seller's  principals and other post-closing obligations which the seller or the  principals may have and how to limit such exposure.
8. Not having a strong and cooperative management team to work with the buyer through the closing process and to potentially be employed by the buyer in some capacity.
9. Not reaching a term sheet with a potential buyer early on in the process before proceeding to devote resources to a sale to that buyer.
10. Not having a confidentiality agreement and otherwise acting consistent with best practices in safeguarding trade secrets and other critical information through the sale process.

Pam's Reading List

Since I love to read, I spend quite a bit of my time reading through all of the emails and resources that get sent to me.  Below are some favorites that caught my eye relating to this month’s topic:

Pre-Sale Planning for Business Owners – Provided by BNY Mellon

Understanding Private Equity – Provided by Summer Street Capital

Accounting for Acquisitions

Who turned on the M&A light switch?

by Pamela Wasley

In the last two months, we have seen a significant increase in assignments involving M&A activity.  It ranges from companies considering an exit to offers currently on the table to post-transaction integration. 

This is probably one of the most challenging decisions a CEO can make in the life of a company.   Whether it is your first or too many to count at this point in your career, the most common comment we get from CEO’s afterwards is, “I should write a book on my experience.”  In this edition of CeriusEdge, we decided to save some of you the time and trouble.  We have compiled a collection of knowledge, advice, lessons learned and everyone’s favorite Top 10 List.

I have personally completed multiple M&A transactions in my career including the recent management buyout of Cerius, the company where I have served as CEO for the past 6 years.   I find there is always something new to be learned and insights to be had. Please enjoy the collection in this edition and feel free to send us your thoughts, advice or personal lessons learned at comments@ceriusinterim.com

View the video here.

Allan Siposs and Geoff Blunt, FMV Capital Markets

www.fmv.com

Discussion on timing of transitioning your company and value enhancement

At Cerius, we always appreciate seeing results.  Being surrounded by the right team during any transaction can not only help save your sanity but also save (or make you) millions. 

There can be many options when trying to match your personal and business goals for an exit with all parties involved.  Here is one example of how considerable planning and analysis helped a family of business owners save almost $9 million in estate and income taxes while achieving their income, investment and wealth transfer COLAS for themselves and their family.

Meet The Westons

Provided by BNY Mellon

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“Second Time Around” – CEO Interview

One of the toughest decisions for a business owner is knowing when to sell their business and who to sell it to.  However, meet a business owner who had to make the additional decision of whether to buy his business back after just selling it four and a half years ago. 

More

Gregory Lai, CFA, Managing Director, Affinity Investment Advisors, LLC

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