What To Consider When Timing the Sale of Your Company

About the Episode

Is it possible to time the sale of a middle-market company to optimize returns? How do current market conditions impact the timing and the company’s value? Dan Shea offers expert advice on considerations sellers need to look at when planning the timing of selling their business. He discusses gauging the health of the market, the economic indicators owners need to consider, the art versus the science of valuation, and the importance of considering personal circumstances and getting advice from experts.

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“Timing is important for obvious and not-so-obvious reasons. You must consider how your business is performing and if it is ready for sale. You have to look at the industry and overall economic landscape. And perhaps the most important is to consider if the timing is right for the owner personally. Look at where these areas overlap, and if everything is right, then proceed with the sale”

Dan Shea

In this Episode

2:19 How important is timing the sale of a middle-market company?
3:24 How much does the general economic environment affect overall M&A activity and individual sellers?
5:52 What happens if the economy is not doing well but a specific industry is stable?
10:03 What risk factors does a buyer assess to determine the stability or riskiness of a business?
15:07 Will there be an oversupply of businesses for sale at some point?
16:50 Can an entrepreneur learn about M&A transactions from reading The Wall Street Journal and then use that information effectively?
19:37 Considering three recent seminal moments in U.S. history – September 11, 2001, the Great Recession of 2008-2009, and the COVID-19 pandemic – which period was the most challenging from an M&A perspective?
26:27 What other memorable events in the last 20 years have potentially had an impact on consumer sentiment?
28:23 How quickly does the M&A market respond to collective events that impact society?
29:35 What are the overall major economic indicators that entrepreneurs should consider when timing the sale of their company?
31:35 What are the implications of inflation on the M&A market?
36:34 Is there a difference between how financial buyers respond to timing the market versus how strategic buyers respond?
38:09 What impact do interest rates have on valuations?
43:15 Why is there no exact science to valuing a business? What are some of the deal points in an M&A transaction that have an economic impact on both the seller and the buyer?
51:25 What is one piece of advice for a middle-market company owner who is considering selling?

Learn More

Resources Mentioned in This Episode

Terms Mentioned in This Episode

  • CEO: Chief Executive Officer – top decision-maker in a company.
  • CFO: Chief Financial Officer – oversees financial matters in a company.
  • EBITDA: A measurement of the cash flow of a company, which includes earnings before interest, taxes, depreciation, and amortization.
  • GDP: Gross Domestic Product – measurement of a country’s economic output.
  • QoE: Quality of Earnings report – assesses the reliability of a company’s profits.
  • Reps & Warranties: Representations and Warranties – statements and guarantees of a business by the seller relating to the assets, liabilities, and contacts of the business sold.

Meet Our Guest

Dan Shea

Dan Shea

Managing Director of Objective, Investment Banking & Valuation

Dan Shea is Managing Director of the company Objective, Investment Banking & Valuation. He applies his 25+ year track record of success to lead the development and transaction advisory efforts for engagements across all practice groups in the company. Before joining Objective, Dan served as Managing Director with BDO Capital, Hadley Partners, and WYCampbell & Company (a division of Comerica Bank). 

Dan is a frequent presenter, panelist, and lecturer at M&A conferences. He has also been cited for his expertise by various publications, including The Wall Street Journal, U.S. News & World Report, Financier Worldwide, Pitchbook, and Industry Today. Dan received an MBA in Finance from the Weatherhead School at Case Western and a BA in Economics from the University of Michigan. 

Location Location: San Diego, California

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