Sell-Side Considerations for Middle-Market Companies
An owner of a private, mid-market company who is contemplating its sale should execute the process with forethought and precision: Sell for the right reason, have an understanding of value, and be prepared to address a host of financial, operational, technology, and human resource issues during the transaction.
The process can be daunting, especially because achieving goals in running a company – whether it is a longtime family business or an up-and-coming entrepreneurial firm – doesn’t necessarily translate into achieving those goals when selling it.
This article explores the issues and challenges company owners face leading up to and during the sale process, among them:
- Determining the preferred time to pursue a transaction
- Identifying and vetting interested buyers
- Deciding whether to pursue one-to-one negotiation or a broad auction process
- Managing post-transaction issues such as employee retention and disparate compensation strategies.
Because mid-market company owners often lack experience in M&A, the article suggests that they enlist a team of independent, experienced advisors – investment bankers, attorneys, M&A accounting/forensics professionals, tax and human resource professionals, and asset managers – to provide support before, during, and after the sale.
The article also identifies leading practices that can help a seller prepare for and execute a transaction that achieves their goals for deal value.
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