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Questions Answered in This Book
- How can one employ a straightforward approach to enhance their negotiating stance?
- What are some recommendations for organizing the transaction to optimize after-tax proceeds?
- What practical steps can be taken to effectively prepare for and carry out due diligence?
- In negotiating a purchase agreement, what clear advice is available?
- What straightforward information is provided for assembling a deal team?
- What tactics are suggested for maintaining confidentiality about the sale from employees, customers, and competitors?
- What strategies can be employed to effectively communicate with and retain employees while managing their expectations during mergers and acquisitions?
- What recommendations are available for preparing crucial sale documents?
- Can you provide a step-by-step guide on negotiating the letter of intent in the context of mergers and acquisitions?
- What essential tips are offered for making decisions and negotiating key terms related to an earnout?
Overview
If you’re in the process of selling your business or have recently received a letter of intent, you’ve come to the right place. In this straightforward, practical guide, I’ll take you behind the scenes to offer you tried and tested advice for one of the most important negotiations of your life.
Closing the Deal teaches you the art and science of negotiating the sale of your business. You’ll learn the fundamentals of every step of the process, from the letter of intent to the closing. This essential field manual offers you an effective blueprint to maximize your negotiating leverage and foolproof strategies to optimize your deal structure and after-tax proceeds. Closing the Deal is for owners of businesses valued from $1 million to $50 million and contains proven tactics for avoiding the most common pitfalls in negotiating the sale of your company.
I wrote this comprehensive handbook to give entrepreneurs actionable advice based on my more than 20 years of M&A experience valuing and selling hundreds of businesses. As the host of the M&A Talk podcast and president of Morgan & Westfield, I bring you strategies and tactics from experts throughout the industry to successfully close the sale of your business.
Table of Contents
Chapter 1: Building Your Team
- M&A Advisor or Investment Banker
- M&A Lawyer
- Accountant
- Tips for Hiring and Working With Advisors
- Other Specialists
Chapter 2: Managing Employee's Expectations
- Informing and Retaining Your Key Employees
- Alternatives to Non-Competes with Employees
Chapter 3: Maintaining Confidentiality
- Strategies for Maintaining Confidentiality
- Non-Disclosure Agreements
- FAQs About Non-Disclosure Agreements
- Content and Analysis of NDA Language
Chapter 4: Preparing Key Sale Documents
- Teaser Profile
- Confidential Information Memorandum
- Normalized Financial Statements
- A Complete Guide to EBITDA and SDE
- Choosing SDE or EBITDA to Value a Business
- Releasing Information in Stages
Chapter 5: Maximizing Negotiating Leverage
- Tip 1: Conduct Pre-Sale Due Diligence
- Tip 2: Reduce Sunk Costs
- Tip 3: Create Multiple Options
- Tip 4: Maintain Emotional Objectivity
- Tip 5: Focus on Running Your Business
- Tip 6: Keep Your Business on the Market
- Tip 7: Beware of Deal Fatigue
- Tip 8: Listen Before Speaking
- Tip 9: Use Honesty To Your Advantage
- Tip 10: Make Conservative Statements
Chapter 6: Negotiating the Letter of Intent
- Overview of the Process
- Contents of a Letter of Intent
- The Process of Negotiating the LOI
- Tips for Negotiating the LOI
- Problems and Solutions
Chapter 7: Structuring the Deal
- Common Deal Structures
- Ensuring a Favorable Deal Structure
- Financial Components of Deal Structure
- Legal Components of Deal Structure
- Legal Structure and Entity Type
- Allocation of Purchase Price and Taxes
- Partial Sales
Chapter 8: Deciding on an Earnout
- Overview
- Objectives of Earnouts
- Tips for Using Earnouts
- Key Elements of an Earnout
- Legal, Accounting, and Tax Implications
Chapter 9: Conducting Due Diligence
- Preparing for Due Diligence
- Due Diligence Overview and Process
- Due Diligence Areas
- Tips for Conducting Due Diligence
- Sample Due Diligence Checklist
Chapter 10: Drafting the Purchase Agreement
- The Process from Signing the LOI to Closing
- Outline of a Typical Purchase Agreement
- Negotiating the Purchase Agreement
- Legal Form of the Transaction
- Supporting Documents to the Purchase Agreement
- Non-Compete Agreement
- Representations & Warranties
- Indemnification
Chapter 11: Orchestrating the Closing
- Preparing Emotionally for the Closing
- The Closing Process
Chapter 12: Conclusion
Appendices
- Appendix A: Glossary
- Appendix B: Due Diligence Checklist
- Appendix C: Purchase Agreement Clauses
- Appendix D: List of Closing Documents
- Appendix E: Escrow’s Duties
Closing the Deal
The Definitive Guide to Negotiating the Sale of Your Business
About the Author
20+ Years of M&A Experience: Over 20 years of experience facilitating mergers, acquisitions, sales, and other business transfers with transaction values up to $500 Million.
300+ Transactions: Successfully participated in or managed the sale of over 300 privately held companies representing both buyers and sellers in North America, Central America, South America, Europe, and Asia.
Author of 6 Books on M&A: The Art of the Exit, A Beginner’s Guide to Business Valuation, The Exit Strategy Handbook, Closing the Deal, Acquired and Food & Beverage M&A
Host of M&A Talk: Host of the #1 podcast on mergers and acquisitions – M&A Talk.
Host of Food & Beverage Talk: Host of the #1 podcast on mergers and acquisitions specializing in the food & beverage industry – Food & Beverage Talk.
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