Improve the profitability of your business with successful acquisitions
Are you selling your business or looking for new business opportunities?
When acquisitions are a timely step for your business, Business Consultants can help you in any situation. We make the sale or purchase of a business a quick and effortless process and, if necessary, offer consulting through this multi-step process. Contact us today!
Selling a company
Before the actual active trading begins, there is a phase of discretion for the owners. The purpose of the reflection phase is to get the business owners to ascertain what they want to do for the business in the future.
Once it has been decided at the reflection stage to put the company up for sale, the preparation phase begins. In the preparation phase, the company is made sales ready ie the company's condition is determined and the documents required to take the sales process forward are prepared.
As with any sale, finding buyers can take time and requires the seller to make long-term, determined, and systematic contact with potential buyers. In most cases, larger acquisitions require the support and assistance of outside professionals for this phase. It is very typical that the buyer is found among the company's competitors.
Once potential buyers have been contacted and preliminary discussions have taken place with them, the owners should choose one party with whom they wish to proceed with the actual trade negotiations. However, this does not always mean that this party will ultimately buy the business, but it may be that the seller will have to go back in the process and start negotiations with another party.
When all the previous steps have been completed with honor, it will be time for the contract negotiations and the concrete conclusion of the deal. At the final stage, a final company inspection will be carried out and contract documents will be drawn up on the basis of what has been agreed in the negotiations.
Once an agreement has been reached in the negotiations, both the seller and the buyer sign the agreements and the transaction is confirmed at the point where the buyer pays the agreed purchase price to the seller. Often, when closing a transaction, special care is taken to ensure that the company to be sold and the purchase price change ownership exactly as stated in the contract.
Buying a business
Choosing the right kind of business and the right company to buy is the crucial first step. Keep a thorough business plan and strategy in mind as you explore your buying opportunities.
This way you can make sure that your choice is based on the right criteria. A good company may look attractive, but it fits badly into your own business.
Due diligence is an established concept of acquisition. Usually, both financial and legal due diligence is done so that the buyer can form an idea of the company’s financial situation and legal obligations. In addition, a business due diligence can be conducted, in which the acquiring company gets to know the business of the acquired company in depth, possibly with the help of a strategy consultant.
Your priorities need to be clarified before due diligence. What is essential, what is crucial, and what is less important? This will make it easier for you to process the new information and make the right decisions based on it.
Due diligence may allow the buyer to renegotiate the price if new information reveals something that was not known in advance.
If a price is agreed after the audit of the accounts, the actual purchase agreement, in professional language Share Purchase Agreement or SPA, is drawn up. It is typically a fairly extensive document that contains precise legal definitions of what is done and when.
The seller’s attorney will make an introduction, which will be commented on by the buyer’s attorney. Contract negotiations are often needed to some extent, as the seller's lawyer usually draws up the contract that is as favorable as possible for the seller. The buyer needs a good lawyer who can take care of the buyer’s interests and make sure you don’t sign anything that could lead to nasty surprises later on.
Once the sales agreement has been drawn up, it is time to sign it and pay the transaction amount.
Are you thinking about buying or selling a business?
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