Positioning Your Company

for Sale

Presented By:
Pierre Villere
 Positioning Your Company
for Sale
Why Are Companies Sold?

 What Do Companies Being Sold Look

Like?
 Family Owned Businesses
 Partnerships
 Divisions of Multi-National Companies
 Positioning Your Company
for Sale
Reasons:
 Multigenerational company - Somebody
wants out
 Succession issues
 Estate Tax issues
 Division not a good fit/hard to manage
 Positioning Your Company
for Sale
The Decision to Sell – The Process

 Valuation
 Watch out – you may get what you want to hear

 Understanding the Value Today vs. Value Tomorrow

 Hiring an intermediary – does it make sense?

 Positioning Your Company
for Sale
So You’ve Decided to Sell
 Getting Your House In Order
 What is “Recast EBITDA”?
– Net income
– Plus interest, taxes, depreciation/amortization
– Plus addbacks
 Positioning Your Company
for Sale
So You’ve Decided to Sell
 Addback issues
 Inventory issues
 Other “Private Company Expense” issues
– The 10-to-1 Rule
 Preparing the “Book”
 Records
 Rumors
Positioning Your Company
for Sale
Who Are the Buyers?
 In Your Market
– Multinationals
– Super-regionals
– Large local player
– Two others like you
 Positioning Your Company
for Sale

Where Is The Industry Headed?

 Consolidation is the keyword

 Positioning Your Company
for Sale
The Sale Process
 Negotiated Transaction vs. Auction
 Tour of operations/visits with management
 Negotiating the Letter of Intent
– Main purpose is to lay out principle terms of
deal
– Standstill agreement is key component
 Positioning Your Company
for Sale
The Sale Process
Definitive Agreements and Due Diligence
 Audit process
 Stock vs. asset purchase
 Employment/Non-Compete Agreements
 Representations and Warranties
 Disclosure Schedules
 Environmental analysis
 Positioning Your Company
for Sale
The Sale Process
Definitive Agreements and Due Diligence
 Geological analysis
 Real estate – title, etc.
 360 degree due diligence
 Timeline
 Positioning Your Company
for Sale
The Closing Process
 Certain items may be renegotiated at the end
 Emotions run high at the end – keep them in
check
 Keep your eye on the ball – get the deal closed