Who’s on your Sell-Side M&A deal team?
As you embark on the journey of selling your business, you will want to make sure you have the right people on your team. This blog takes the opportunity to briefly describe the players and their roles.
Investment Banker
In addition to the function of an investment banker that we wrote about previously, an investment banker will act as project manager for the rest of your deal team.
Management
This is often the most difficult part of your team to determine. There is a balance of needing to bring the right people “under the hood” while not involving too many or ones that you cannot trust to keep the deal confidential. You want to make sure that word does not spread amongst your workforce (which leads to word spreading amongst your customers) until the deal is closed.
That said, the work that goes into preparing the company for sale and then managing due diligence will require assistance from members of your senior team. Most often, the first person aware of the potential transaction is your CFO or controller. You will need their help to access the required financial information that buyers will need to see to assess the opportunity.
From there, you can involve others as required. Your internal deal team often grows once a letter of intent (“LOI”) is signed. At this point more intense due diligence will begin and the probability of successfully closing a deal also increases.
Accountant
Your accountant will play a role as you prepare to sell your business and depending on the structure of your organization could play a role in the sale process.
In advance of selling your business you should ensure the proper tax structure is set-up. This should be done years in advance as certain structures need to be in place for years prior to the sale (e.g., to benefit from the lifetime capital gains exemption a shareholder must have owned shares for two years prior to the closing date).
Your tax accountant may also be involved in preparing other pre-closing re-organizations and reviewing tax provisions in the purchase and sale documents.
Your audit manager will play a role in the due diligence conducted on your business. The statements that have been prepared will be scrutinized and they will need to provide insights on the historical work they have done.
It is also common for your audit manager to assist with determining the working capital target, the estimated working capital and final working capital.
Legal Counsel
Your legal counsel’s involvement typically begins once a LOI is received. They will review and comment on the LOI.
Once the LOI is signed, your legal team will answer legal due diligence questions, ensure your corporate records are up to date and most importantly take the lead on the definitive purchase agreement.
Your legal team will consist of multiple lawyers, including the lead partner, associates, and additional subject matter experts (e.g., employment, IP, environmental etc.).
As is evident from this blog, just your team alone will be comprised of multiple parties, each with their own sub-teams. A buyer will have a similar, if not larger team, than this as well. This is why it is important to have a competent investment banker that takes on an active project management role to ensure all parties are working together to help you achieve your desired outcome.
Please contact cmcgarry@welchcapitalparnters.com to learn more about our experience with successfully closing transactions.
Who’s on your Sell-Side M&A deal team?
As you embark on the journey of selling your business, you will want to make sure you have the right people on your team. This blog takes the opportunity to briefly describe the players and their roles.
Investment Banker
In addition to the function of an investment banker that we wrote about previously, an investment banker will act as project manager for the rest of your deal team.
Management
This is often the most difficult part of your team to determine. There is a balance of needing to bring the right people “under the hood” while not involving too many or ones that you cannot trust to keep the deal confidential. You want to make sure that word does not spread amongst your workforce (which leads to word spreading amongst your customers) until the deal is closed.
That said, the work that goes into preparing the company for sale and then managing due diligence will require assistance from members of your senior team. Most often, the first person aware of the potential transaction is your CFO or controller. You will need their help to access the required financial information that buyers will need to see to assess the opportunity.
From there, you can involve others as required. Your internal deal team often grows once a letter of intent (“LOI”) is signed. At this point more intense due diligence will begin and the probability of successfully closing a deal also increases.
Accountant
Your accountant will play a role as you prepare to sell your business and depending on the structure of your organization could play a role in the sale process.
In advance of selling your business you should ensure the proper tax structure is set-up. This should be done years in advance as certain structures need to be in place for years prior to the sale (e.g., to benefit from the lifetime capital gains exemption a shareholder must have owned shares for two years prior to the closing date).
Your tax accountant may also be involved in preparing other pre-closing re-organizations and reviewing tax provisions in the purchase and sale documents.
Your audit manager will play a role in the due diligence conducted on your business. The statements that have been prepared will be scrutinized and they will need to provide insights on the historical work they have done.
It is also common for your audit manager to assist with determining the working capital target, the estimated working capital and final working capital.
Legal Counsel
Your legal counsel’s involvement typically begins once a LOI is received. They will review and comment on the LOI.
Once the LOI is signed, your legal team will answer legal due diligence questions, ensure your corporate records are up to date and most importantly take the lead on the definitive purchase agreement.
Your legal team will consist of multiple lawyers, including the lead partner, associates, and additional subject matter experts (e.g., employment, IP, environmental etc.).
As is evident from this blog, just your team alone will be comprised of multiple parties, each with their own sub-teams. A buyer will have a similar, if not larger team, than this as well. This is why it is important to have a competent investment banker that takes on an active project management role to ensure all parties are working together to help you achieve your desired outcome.
Please contact cmcgarry@welchcapitalparnters.com to learn more about our experience with successfully closing transactions.
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