I’ve been an M&A advisor for many years. Today I work with clients of Business Transition Strategies who are implementing Growth Through Acquisition strategies. Here are a few observations from working on a wide variety of projects.
- Transactions should not be adversarial. It’s not about winning or losing. Both parties should win. Both parties need to be satisfied with the transaction.
- No deal is perfect for everyone.
- Both parties need to appreciate that the business will be different post close. The risk currently for the seller will be different for the buyer.
- The seller needs to understand that the buyer in most instances will not benefit from the same net cash flow because the buyer has to service the debt used to purchase the business.
- The purchase price needs to reflect the ability to repay any notes and still earn a decent profit.