There are many different issues that private business owners need to consider when determining if they want their companies to be acquired by another organization. The first question that a seller has to answer is whether a buyer’s offer represents fair market value for the company. To determine what a private company may be worth, it can be a good idea to review the valuation it received during its last investment round.
Business owners may also want to see how an offer compares to those accepted by other companies in their industries during the past several months. Before a sale can close, a buyer will want to do due diligence into what it will be acquiring. In some cases, it can take up to a year for a buyer to complete the process of investigating a privately held company. Sellers may be able to shorten this timeline by creating a central location where buyers can access the information that they need in a timely manner.
As with almost any other sale, a seller may get the best deal by attracting multiple bidders. In such a scenario, the seller can use the bidders against each other to strengthen its negotiating position. Finally, those who are attempting to sell their companies will want to have a legal team that has experience with complex business transactions.
Business owners may benefit in multiple ways when they hire a business law attorney to help with the sale of their companies. An attorney may be able to help organize and share information with a buyer during the due diligence process. This person may also structure a deal that is tax efficient for owners and shareholders. Finally, a legal professional may resolve any disputes that might arise before or after the deal closes.