All interested parties are required to complete a non-disclosure agreement before any information is shared. Employees can become prematurely worried. Customers may grow concerned. Competitors who aren’t pursuing an acquisition may use the information to enhance their market position. That is why confidentiality is a cornerstone of our operation.
We invest a lot of energy to research, and develop a specific marketing plan for each engagement. We actively develop interest by confidentially contacting buyers who may view the company as a good acquisition. Targets include strategic buyers, private equity investors, well-funded individuals and others. We do not wait passively for interest, but contact them directly to generate interest. Our goal is to develop a competitive environment so the owner receives the best possible value.
After an LOI (Letter of Intent) is signed, the buyer will begin a detailed review of finances, operations, legal structure and more. It can be a daunting process, with many questions raised and new information needed. We begin early gathering of information we have found most buyers want, and then supplement this list with specific requests. When the time comes, we serve as a conduit for information so the owner can stay focused on the business.
It is best to consider before you have to, and while you can see a sale through. Often deals come with contingencies that may require your attention post sale, so waiting too long might cut into what you have in mind for life after the sale. Efforts to pick the peak time rarely yield the desired outcome. There are many issues to consider, both business and personal. However, it is better to be dealing with these while you have options.
We work with the seller to prepare for a sale, develop materials that tell the story of the company and then proactively seek buyers. These range from strategic groups looking for expansion to private equity buyers seeking an investment. There are also highly qualified individual buyers seeking new opportunities and we have a number in our database, too. We quarterback the process, start to finish, and work with your other professional advisors to seek the best outcome.
Generally, we do not price the company. Rather, we ask buyers for proposals and then review these with owners. Because we are proactive in our buyer search, we ask for buyers to give their best proposals. That doesn’t mean anything goes. Rather, the process we use to focus interest is intended to provide owners options for a decision. There are times, however, when putting a price on the business is effective. We will use this when appropriate to accomplish the seller’s goals.
When we don’t set a price upfront, buyers have to tell us what they think the business is worth, rather than simply agreeing to (or negotiating down from) a number we picked. Since we’re reaching out to multiple types of buyers at once, strategic companies, private equity firms, and individual buyers, we create real competition for the business. That competition often reveals a higher value than a single asking price would have invited, since no one wants to lose out to another serious buyer. It also protects you from leaving money on the table by pricing too conservatively, or from scaring off good buyers by pricing too high before anyone’s actually seen the business.
Before going to market, we prepare a formal Estimate of Value based on your financials, your industry, and what comparable businesses have recently sold for. That gives you a realistic range to work from, so you’re never going in blind. Going to market without a price doesn’t mean going in without any idea of value, it just means we let real buyer interest confirm or refine that number, rather than locking you into a single figure before anyone’s even seen the business.
Most engagements take around a year from signing with us to closing, and it’s not unusual for it to run longer depending on your business and how the buyer search unfolds. We break the process into four phases, preparation, finding buyers, managing the competitive process, and closing the deal, with each phase typically taking 60 to 90 days. Due diligence alone can extend that timeline further, buyers often bring in third parties for a quality of earnings review, environmental assessments, and other specialized diligence, each of which takes additional weeks to complete properly. Thorough preparation up front tends to make the later phases go more smoothly, and it’s worth factoring a full year or more into your planning from the start, rather than assuming it will move quickly.
Not unless and until you want them to. Confidentiality is built into every step of our process. We use a blind profile, not your company’s actual name, to introduce the opportunity to buyers, and no one sees identifying details until they’ve signed a non-disclosure agreement. Most owners choose to keep a sale confidential from employees and customers until a deal is signed and closing is near, since premature news can create unnecessary worry or give competitors an opening. We’ll talk through the right timing for your situation as part of the process.
Often, yes, at least for a transition period. Most buyers want the outgoing owner’s help for a stretch after closing, whether that’s introducing key customer relationships, training the team on institutional knowledge, or just being available for a smoother handoff. The length and nature of that involvement varies, sometimes it’s a few months of advisory support, sometimes longer, depending on the business and the buyer’s needs. We’ll negotiate what that looks like as part of the deal itself, so it’s never a surprise sprung on you after closing, you’ll know what’s expected going in.
If a sale or transition is a year or more away, that’s actually a good time to start. We’d begin with a conversation to understand where your business stands today and what you’re hoping to get out of a future transition. From there, we’ll talk through what preparation actually looks like for your specific situation, which could mean a few targeted changes, or a longer-term plan to build value over time. For owners who want that more structured, ongoing approach, Exit Advantage℠ is one option we may point you toward.
“I retained Business Transition Strategies to handle the sale of my company, which manufactures machined parts for a diversity of sectors. The entire process went smoothly and professionally. The BTS team kept me fully informed at every step. They worked hard and were effective in bringing the deal home. Their data room system, with a lot of information loaded in advance, saved time during due diligence. I would recommend the BTS team to any private company considering selling.”
