SELLING A COMPANY / GENERATIONAL TRANSITION
Crown princess/ crown prince:
Do you have a natural successor for your post, if you one day decide to sell your company or your medical condition worsens? What will happen to your customers, your employees and your suppliers?
Are there any of your key employees who got the right age and the right drive to take over? Or is it a good idea to start searching for the right replacement elsewhere?
The value of your company is not only dependent on the turnover, profit and customers. More and more buyers are very interested in, if the company has a successor who can possess the head post after the acquisition.
Thus, the crown princess/ crown prince pose an equally important role as yourself, when it comes to the value of your life’s work.
Remember therefore, to cultivate the successor and let the person know that he/she is designated to become the head of the company. Thereby, you avoid that the right person suddenly resigns and maybe even ends up working for a competitor.
We can help you focus on this important aspect.
Sharpen your company:
A majority of companies run a reasonable business which continuously makes a good profit for the owner. Though, even when your company develops positively, do you then remember to stay focused on:
• Products – new markets/products
• Optimizing the existing business
• The employees and the customers
When business is good and the bottom line is positive, a lot of people forget to keep the focus on especially item number 2.
However, they often figure out when they decide to sell their company that it would have been advantageous if they had kept the focus continuously. Because it is not the birds on the roof that the buyer is going to pay for but the birds that you have already shot. Or in other words, it is the investments you have made and which have resulted in an increasing turnover that the buyer will pay for, not the future implementation plans.
So the piece of advice is – “sharpen your company” all the time!
What is important for you?
• That your company continues after the acquisition?
When you have decided to sell your company have you then considered what is important for you and the company after the acquisition?
In 2004 Peter Stubkjær Sørensen sold his company, Bonus Energy, to Siemens Wind Power. As a part of the sales agreement Peter wished that the stone in front of the company’s entry which carried the inscription “Bonus Energy” should remain at the entry even after the acquisition. For Peter it was important that everyone in the future could see which company had been the basis of the current one. Peter still likes to show the stone to visiting friends and proudly announce ”look, I was a part of creating this”.
Do you feel like Peter? – We believe that most people who has fought for a company for many years and then sell “the baby” wants to see the company continue to develop, even if the name on the door has changed.
In addition, of course, is the desire for a proper price and reasonable terms of sale.
The sales procedure takes place as follows:
- We arrange for an informal meeting at your office or ours.
- You present your requests in connection with the sale. (It is not only about the money but also about being able to follow your lifework for many years ahead although the name has been changed. Furthermore, it is essential that your loyal employees are able to see a future in the new set-up/company).
- We arrange a sales agreement with you. If we believe that we have a potential buyer, we will make a “Sales Agreement 1” (see the enclosure), in which we agree on the period as well as the general sales terms.
- You will sign an NDA (Non-disclosure Agreement) upon which we will inform you of the possible buyer.
- Until this point, everything is free of charge.
- If you want to continue with the procedure, we will make an agreement of procurement between you and us. We will implement an evaluation of your company through accounts/ budgets and your agreements with key account customers, as well as other relevant documents. All of which will provide us with a clear vision of your company and a first estimate of its value.
- Based upon the evaluation, we will make an anonymous pre-approved teaser for the buyer.
- As soon as the buyer wants to proceed with the procedure and has signed the NDA and, we will complete a due diligence investigation. (This procedure is important for to make sure that there are not any “black spots” which might mean a devaluation of your company. By doing this, we can avoid a discussion with the buyer = buyer try to press the price.)
- During the negotiations we are acting as middlemen in order for you to avoid distraction from interfering feelings.
- Upon the negotiations, we will meet with you and the respective lawyers and the buyer will place an indicative offer. Then, the actual due diligence procedure can begin.
- As soon as the due diligence procedure has been closed, the buyer will place a binding offer.
- Upon this, the contract negotiations and the signing of the conditional transaction agreement will take place.
- Fulfilment of the terms of implementation and the due diligence is finalized.
- Closing of the agreement between the parties.
