Don’t Be a Lone Ranger When Selling Your Company
Author: Austin Propst
Selling a company is one of the most complicated transactions facing business owners. It requires extensive planning, evaluation, marketing and execution, and owners with a “lone ranger” mentality can literally sell themselves short. Assembling a team of skilled merger and acquisition (M&A) professionals is paramount. That’s where BKD Corporate Finance (BKDCF) comes into play. Our corporate finance specialists, investment bankers and financial analysts have experience in a variety of industries, including financial services, health care, manufacturing and distribution, energy, private equity, construction and engineering, business and professional services and consumer products, and they can handle your transaction from start to finish.
Research shows the selling price can drop as low as 60 percent when a seller isn’t represented by a professional M&A team like BKDCF. Other disadvantages of going it alone include spending more time on the sale, suffering more frustration throughout the process and not closing the deal as often. By contrast, studies show the selling price and number of successful transactions go up when owners lean on a team like BKDCF.
With potentially millions of dollars at stake, now isn’t the time to pinch pennies.
So how can BKDCF professionals help make your sale a success? We can help you:
- Identify value within your company
- Present your company to the market
- Preserve value through confidentiality
- Select & engage qualified prospective buyers
- Create a competitive negotiating environment
- Maintain the transaction momentum
- Focus on your business operations
Identifying Your Company’s Value
First-time sellers often overvalue their business due to emotional attachment or unrealistic expectations about its worth. Others may undervalue their company because they’re unfamiliar with its marketability or overall industry trends. BKDCF professionals can help you find the right balance. Our investment bankers and CPAs, along with the third-party attorneys we engage, understand today’s markets, know what businesses similar to yours sell for and can help you meet the various valuation and execution requirements.
Presenting Your Company to the Market
From potential investors’ perspective, every facet of a company—from its business history to its prospects to its style of operations—affects its value. Our experienced and objective M&A team can help you see the big picture and present your company to prospective buyers in a favorable light.
Preserving Value Through Confidentiality
Lone rangers would find it difficult—if not impossible—to market their company on a large scale while maintaining confidentiality. Divulging too much sensitive information to too many buyers can impair your company’s value proposition. Our M&A team can base its marketing strategy on your confidentiality terms and help reduce your risk of leaking confidential information.
Selecting & Engaging Qualified Buyers
Our investment bankers have access to thousands of financial and strategic investors, which is especially beneficial to middle-market companies. BKDCF advisors can leverage these resources to help you weed out unqualified buyers and show prospective buyers you’re serious—and that’s likely to generate more interest in your company.
Creating a Competitive Negotiating Environment
By weeding out less-promising buyers and running point during negotiations, our team can help transfer the balance of power from the buyer to you, the seller. We can help you get the desired price for your company without compromising goodwill between the principal parties.
Maintaining the Transaction Momentum
Sometimes the success of a transaction hinges on maintaining momentum, especially with large buyers actively seeking acquisitions. The transaction process can last six to 12 months or even longer, so it’s important to have a qualified intermediary who can keep the buyer and seller focused. BKDCF investment bankers can provide much-needed persistence to see the sale through from assessment to execution. Our team can evaluate your company’s financial condition, operations and objectives and then value, prepare and time the transaction in line with your interests.
Focusing on Day-to-Day Operations
The sale of a business often creates many distractions for management—distractions the BKDCF team can help mitigate. It’s crucial for business owners and key executives to tend to day-to-day operations, because dips in company performance can give buyers pause. Repeatedly missing financial performance forecasts during negotiations is a surefire way to lose credibility, if not the deal altogether.
BKDCF has the experience and expertise to help add value to your sale—from start to finish. If you’re considering selling your business in the next three to five years, don’t be a lone ranger. Assemble your BKDCF transaction team today.