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What’s the role of a deal team in a Colorado business sale?

by | Jan 7, 2015 | Sales & Dissolutions

Fort Collins business owners have all sorts of reasons to sell a portion or all of a company. Health issues intervene, competitive pressures build, the market is ripe for a sale or capital is needed for expansion. Sometimes, a Colorado entrepreneur just feels it’s time to collect the rewards of years of hard work.

The sale of a business should be approached as carefully as starting one. Many business owners make the mistake of trying to market and sell a business while simultaneously running their operations. Creating a deal team ensures you have significant input in a sale, without sacrificing profits that keep earnings – and the sale price — high.

Deal teams are made up of owners, senior executives and individuals with specialized advice, inside and outside the business. The company’s accountant and legal adviser are important components of the deal team, but so are an investment banker and a mergers and acquisitions attorney. Equally important are external advisers for financial management and tax concerns.

As some advisers sharpen the company’s profile, others collaborate on exit strategies. An investment banker is a valuable source of buyer interest. Along with the mergers and acquisitions lawyer, the investment banker can take the business through a formal auction process, encouraging buyer interest and competition.

Meanwhile, other team members can gather information to prepare the company for sale and take care of “housecleaning.” Internal due diligence is necessary to pass a buyer’s comprehensive appraisal of the company’s finances.

Some business owners think extra advisers are too costly. Keep in mind the majority of mid-level companies up for sale have a poor closing record. Up to 80 percent of these businesses fail to bring a final sales deal to completion – a waste of time, effort and money.

Each business has unique qualities affecting the deal team structure. Raise your concerns in the confidence of a mergers and acquisitions lawyer.

Source: The Denver Post, “Go to sale alone, and you’ll probably leave money on the table” Jan. 05, 2015

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