Positioning Your Company for Sale

Positioning Your Company Positioning Your Company for Salefor Sale

Presented By:

Pierre Villere


Why Are Companies Sold?

What Do Companies Being Sold Look Like?

Family Owned Businesses Partnerships Divisions of Multi-National Companies


Reasons:Multigenerational company - Somebody

wants outSuccession issuesEstate Tax issuesDivision not a good fit/hard to manage


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?


So You’ve Decided to SellGetting Your House In OrderWhat is “Recast EBITDA”?

– Net income

– Plus interest, taxes, depreciation/amortization

– Plus addbacks


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


Who Are the Buyers?In Your Market

– Multinationals– Super-regionals– Large local player– Two others like you


Where Is The Industry Headed?

Consolidation is the keyword


The Sale ProcessNegotiated Transaction vs. AuctionTour of operations/visits with managementNegotiating the Letter of Intent

– Main purpose is to lay out principle terms of deal

– Standstill agreement is key component


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


The Sale Process

Definitive Agreements and Due DiligenceGeological analysisReal estate – title, etc.360 degree due diligenceTimeline


The Closing ProcessCertain items may be renegotiated at the endEmotions run high at the end – keep them in

checkKeep your eye on the ball – get the deal closed

Positioning Your Company for Sale

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Transcript of Positioning Your Company for Sale