Behind the Scenes of Selling a Business to a Corporate Buyer

About the Episode

Joan De la Paz Hellmer is an experienced finance professional with over a decade of capital markets, M&A, and investment experience. Joan is skilled in all aspects of transactions, including thesis-building, sourcing, negotiation, execution, and post-acquisition strategy. He has a strong business development and strategy background with an MBA from the University of Chicago. He was born and raised in Mexico City and currently resides in Philadelphia, Pennsylvania.

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In this Episode

5:25 What is the essence of corporate development?
7:00 How does corporate development relate to organic growth?
8:10 What is the next step in corporate development after forming the strategy?
8:50 Proactive vs. reactive M&A
12:00 What is the number one challenge as an acquirer?
13:20 Accretive acquisitions
14:30 Dilution vs. accretion
15:00 Mergers vs. acquisitions
16:00 What is the biggest mistake sellers make when they are approached by an acquirer?
17:35 How do you prefer to structure a typical acquisition?
20:00 Does size matter when making an acquisition?
21:30 What is driving you to make acquisitions?
23:20 How do you assess if you want to do a deal?
25:50 What are the most common mistakes business owners make when negotiating the LOI?
28:40 What is the attorney’s role in the process?
31:00 Can you hire your family lawyer to handle your transaction?
31:50 How important is experience when hiring an attorney?
32:50 Indication of interest (IOI) vs. letter of intent (LOI)
35:45 What typically happens after the IOI?
36:30 What is a memorandum of understanding (MOU)?
39:00 What are the biggest mistakes sellers make during due diligence?
40:30 What is confirmatory due diligence?
43:40 How intense is due diligence?
45:00 What happens after due diligence is finished?
46:20 Negotiating the purchase agreement
48:40 How are private equity firms structured?
52:30 Private equity firm fees and returns
53:15 What is the difference between selling to a corporate acquirer vs. selling to a private equity firm?
59:15 What is an independent sponsor?
1:01:50 Who stays on to run the company post-closing?
1:02:40 Are you interested in a company in which the owner is not willing to stay to operate the business post-closing?
1:03:00 Environmental, social, and corporate governance (ESG)

Highlights

  • The number one challenge for an acquirer is telling their story, and differentiating themselves from other buyers.
  • The number one mistake sellers make when they are approached by a buyer is focusing exclusively on price. The devil is in the details.

Learn More About This Episode

Resources Mentioned in This Episode

Meet Our Guest

Joan De la Paz Hellmer

Joan De la Paz Hellmer

Managing Principal at Viento Capital LLC

Joan De la Paz Hellmer is an experienced finance professional with over a decade of capital markets, M&A, and investment experience. Joan is skilled in all aspects of transactions including thesis-building, sourcing, negotiation, execution and post-acquisition strategy. He has a strong business development and strategy background with an MBA from the University of Chicago. He was born and raised in Mexico City and currently resides in Philadelphia, Pennsylvania.

Location Location: Philadelphia, Pennsylvania
Website Website: www.adhq.com

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