Transition Companies Sacramento. Sooner Is Better Than Later!
Gene Sartin Explains That Waiting To Late Is Costly.
Gene Sartin of The Transition Companies explains that owners of middle market companies receive the greatest value when they, the company, and the M&A marketplace are all ready at the same time.
Here is a good example. A prospective client of The Transition Companies was offered $100 million for their company a few years back. The company was to be purchased by a large public company using the buyers stock as part of proceeds. As part of the purchase and sale agreement, the stock was "collared" meaning that the owner would receive not less than $85 million if the buyer's stock price dropped. The owner declined the offer, saying they were not ready to sell. They believed, in time, they could get more. Just five short years later that same owner was suddenly hoping to get $5 million for the company and even that turned out to be very difficult. This is an extreme example to be sure, but an example nonetheless of the effects that timing can have on the selling price of a company.
Gene Sartin explains that timing is to the sale of a company what location is to real estate. The key to reducing the likelihood of winding up like the client above is to be prepared, knowledgeable about the M&A market, and in touch with a professional M&A advisor. A capable, professional M&A advisor like The Transition Companies can alert owners not only about markets and how they affect value and selling price, but can also recommend operational changes to a business to increase value.
Operational changes can often take one to two years to implement. Considering the statistical average of six to eighteen months to sell a company, means an owner who is considering selling needs to seek professional M&A advice at least eighteen months prior to selling, and at best, three years in advance.
When the right time to sell and exit comes around, it is too late to start the process explains Gene Sartin. Don't be a victim. Engage a good M&A firm like The Transition Companies well in advance. Let them get familiar with your company, you and your situation. You will profit from being proactive far in advance of the actual exit from your company.
The Transition Companies Sacramento TTC | 8880 Cal Center Drive, Suite 400 | Sacramento, CA 95826
916-978-1788 | www.TheTransitionCompanies.com