The sale of a private business
Recent years have seen records broken in the number of M&A transactions. Post pandemic, values rebounded to all-time highs. Buyers today are awash with cash, are attracted to the number of motivated sellers, the low cost of capital, and the synergies. Buyers race to acquire technology, access to new markets and scalability. In a recent survey of Buyers, 80% noted that acquisitions are a major part of their business strategy for the future.
Nevertheless, as we have learned in the past, the market for private companies is very volatile. As pointed out recently in the Wall Street Journal, “There is no assurance the recent multiples and values of private companies will remain high. Multiples are already declining in many industries. Deals tend to beget deals, and much depends on the (buyers) mindset and their stomach for risk – both of which can quickly turn. Deals can go “pencils down” due to inflation, tariffs, increases in interest rates and taxes, unstable public markets, political turmoil, and a lack of confidence in leaders, particularly monetary and fiscal policymakers.”
For the owners of quality private companies, the opportunity to sell is a once-in-a-lifetime opportunity and can be the most important business decision of a lifetime. An owner seeking a buyer without assistance, quickly finds the process can be time-consuming, taking 50% of more of their time. This is time away from their business, employees, customers, etc. Maintaining confidentiality is difficult. The sale process can take 12 months or longer and requires managing many complex issues ( employees and management matters, tax, legal, environmental, etc.). If not managed well, the result will certainly be frustration and failure.
The Need for Professionals
Most buyers for private companies have extensive experience in acquisitions. Almost always, they are armed with knowledge not available to sellers. The have learned from their mistakes and the mistakes of others. They require extensive due diligence that can be disruptive for the seller.
A credible and experienced M&A advisor can make the difference between success and failure. Studies show that sellers of all sizes of businesses receive significantly higher premiums when they retain qualified and experienced professionals.
Our firm has fifty years of experience advising sellers:
- Recapitalizations with private investors
- Tax-free mergers with a public company
- Sale to financial and strategic buyers
- Sale to an Employee Stock Ownership Plan (ESOP)
- The “Rollup” of private companies into a larger enterprise
- Sales and Leasebacks of business real estate
Inman approach to Selling
At The Inman Company, we only take on a select number of clients annually so that we can provide an unprecedented level of personal service It’s a philosophy that has served us well over the last 45 years which is why we offer a confidential and disciplined process for clients that produces results (we close in excess of 90% all engagements)
Unlike other M&A advisors who charge retainers of $50,000 or more, confidence in our process allows us to charge $25,000.