Businesses are sold for many reasons, but typically issues of timing, liquidity and emotions take center stage. One of the most common drivers of a sale is the need for a succession strategy within family owned companies. Often the decision is purely financial — private companies are highly illiquid assets and a sale can generate liquidity for diversification and financial security. In other situations, entrepreneurs find their drive and passion for the business fades over time. Transactions are also often triggered by unsolicited offers from a competitor or a private equity group, even when the thought of selling wasn’t on the radar.
Whatever the driving force for the transaction, selling your business can be an emotional undertaking that may result in serious disruptions unless the process is managed properly. The sale process can impact relationships with suppliers, shareholders, family and employees in ways that can damage the value of the company. A well-managed process, on the other hand, can enhance the value of a business and position the company for a continuing legacy under a new ownership structure.
M&A Essentials White Paper: The Sale of a Privately Held Company
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Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.