There are a number of reasons why privately owned companies sell through an M&A (Mergers and Acquisitions) company. An M&A advisor in New Jersey or anywehre in the US can help businesses navigate the legal, intellectual property, financial, and human resource issues that come with buying or selling a business. An Advisor is in an ideal position to help you navigate these issues as you seek to sell your business.
Price Maximization
If you are planning to sell your business, you are bound to receive multiple offers. Some businessmen/women simply take the best offer they can get. Engaging an M&A advisor can improve the prospects for the seller so that he can get the best value for his business.
For example, liquidating 100% of your business may result in a lower acquisition price. This is because the owner of the business is not expected to be around to assist in the integration process. Therefore, remaining with a 10 to 20% stake of the company can inspire confidence and may generate a much higher acquisition price. This is also an advantage for both the seller and the buyer since the seller will also gain if the stock prices increase as a result of their contributions during the integration process.
Eliminating Doubts and Facilitating M&A processes
business owners may have a high net worth but for some of them, the money is tied up in equity. The seller may want to turn this equity into cash to take care of emergencies, hospital bills, or sort out a financial issue. Under these circumstances, the business owner may be tempted to sell the moment they get the first offer. This can leave doubts and regrets after the business is sold.
To ensure the seller gets the price and M&A advisor can assist in finding an acquirer. An acquirer can get the rights of ownership to a company to facilitate the M&A process. Since in these situations the business owner may not be available to assist in the process. Large companies have strategic departments that can handle these processes but they are often weighed down by legal technicalities and bureaucracy.
Getting the Right Buyer for the Right Price
A business owner may be concerned about what will happen after he sells the company. For example, the owner may be worried about the employee’s welfare and whether they will retain their jobs. Additionally, unless the seller is liquidating 100% of the business, he is going to be working with the buyer post-transaction to facilitate the acquisition and integration processes.
An M&A company can help the seller find the best price and a buyer the owner is comfortable working with. The M&A advisor is in the best position to find the best fit for the business that will address the concerns of the seller.
Exit Strategy
Sometimes the owner of the business may realize that the deal isn’t right for them after they’ve sold their business. Starting the process all over again from the beginning can be challenging especially for early-stage companies. An M&A company should be able to save time and salvage the process by finding buyers who were excluded in the initial stages. Other strategies may involve finding partners who can provide funding for your business, who can then offer to buy the business once it starts making a profit.
