wann firma verkaufen?

When is the Right Time to Sell your Business?

Business owners work hard to provide a good quality service to their customers but there can come a time when it makes sense to sell the business.
It’s not an easy decision and how do you know it’s going to be the right one?

 

5 Reasons Business Owners Choose to Sell Their Business

Let’s review 5 of the main reasons owners consider selling their business.

1. Retirement planning

There comes a time when it is more important to relax and enjoy life rather than work in your business every day. A retiring business owner is often someone who is keen to get the best value from selling their business but not at any price.

2. New investment required

Sometimes the owner has taken the business as far as possible and without new investment it cannot grow any more. New money and management may be needed to take the business to the next level.

3. Change in the market

Sometimes a particular type of business becomes popular: video rentals, tanning salons, payday loans are just some types of business that have become very popular at one point in time.

This could be an opportunity for an existing owner to cash in a heated market and get the very best possible price for the business at the top of the market.

4. Change in the legal / regulatory landscape

A business owner may sell because the government has introduced new legislation that affects how their business runs.

Examples include new environmental controls for building firms, new privacy laws for technology companies or a change in government subsidies for medical firms.

The owner may choose to sell the business rather than adapt to the new laws or regulations.

5. New opportunities

A business owner may have been offered or seen another business opportunity in another industry. Selling their current business can provide the capital to begin a business elsewhere.

Whatever the reason for selling a business, every business owner will need to consult a wide range of professionals including lawyers and accountants to ensure all the financial and legal implications from the sale are fully understood.

 

Preparing Your Business for the Due Diligence Process

An important part of the sales process is preparing your company information for the due diligence process. The smoother the due diligence process is for potential buyers, the more likely an owner can sell their business.

A proven way to ensure the most efficient due diligence process for a business sale is to create an online data room where all documents relating to the sale. Documents are available in a secure online location and the ability to review these files is limited to prospective buyers.

Docurex provides organizations with a secure, online data room to ensure transparency and fairness in critical business sale transactions.

Contact Docurex for more information today.

 

Mergers & Acquisitions

The Main Types of Mergers and Acquisitions

Companies merge and acquire each other for many different reasons.

From a hostile takeover to a friendly merger or a strategic alliance – there are many ways companies can combine forces.

In this article we look at four of the main types of mergers and acquisitions and provide a mini-case study of a well-known merger that did not turn out as planned.

4 Types of Mergers and Acquisitions

Companies will merge together and acquire each other for a variety of reasons. Here are four of the main ways companies join forces:

Horizontal Merger / Acquisition

Two companies come together with similar products / services. By merging they are expanding their range but are not essentially doing anything new. In 2002 Hewlett Packard took over Compaq Computers for $24.2 billion. The aim was to create the dominant personal computer supplier by combining the PC products of both companies.

Vertical Merger / Acquisition

Two companies join forces in the same industry but they are at different points on the supply chain. They become more vertically integrated by improving logistics, consolidating staff and perhaps reducing time to market for products. A clothing retailer who buys a clothing manufacturing company would be an example of a vertical merger.

Conglomerate Merger / Acquisition

Two companies in different industries join forces or one takes over the other in order to broaden their range of services and products. This approach can help reduce costs by combining back office activities as well as reduce risk by operating in a range of industries.

Concentric Merger / Acquisition

In some cases, two companies will share customers but provide different services. An example would be Sony who manufacture DVD players but who also bought the Columbia Pictures movie studio in 1989. Sony were now able to produce films to be able to be played on their DVD players. Indeed, this was a key part of the strategy to introduce Sony Blu-Ray DVD players.

Case Study – 1998 – Daimler Benz and Chrysler

Daimler Benz bought Chrysler in 1998 and combined to form Daimler Chrysler, a $37 billion automotive giant that had a massive presence both sides of the Atlantic. However, cultural clashes between the two companies were cited as a key reason for the failure that led Daimler to selling Chrysler in 2007 for $7 billion.

In this case, the “efficient, conservative and safe” culture of Daimler clashed with the “daring, diverse and creating” culture of Chrysler. The due diligence work carried up front had not properly assessed the challenge both organisations faced in working with each other.

Also, the transaction was described as a “merger of equals” and this was not the reality within the new organisation. Chrysler had obviously been taken over and there was little trust between the two organisations.

A failure on this scale shows the importance of a thorough and objective due diligence process.

 

The world of mergers and acquisitions relies heavily on the due diligence process to help assess the viability of a transaction. When billions of dollars are at stake, it makes sense to do all the information gathering and analysis that you can.

The 8 key reports you must make available to potential buyers of your business

The 8 key reports you must make available to potential buyers of your business

If you are looking to sell your business or are acting on behalf of a business owner who wishes to sell, you no doubt understand the importance of the correct disclosure of your company information.
The due diligence process offers buyers the opportunity to review documents and ask relevant questions of the current business owner. This gives buyers the complete picture of the business they are looking to buy and ensures the seller meets all disclosure obligations from a financial and legal perspective.
The more company information a business owner can present in the first instance, the quicker the sale process is likely to become.
Buyers will see less risk in the purchase if they have their questions answered before they have even thought to ask them.
So what is a proven way to organise your company information during the due diligence phase of a business sale?
In our experience, we have found the following 8 key reports to be critical in helping describe the company for sale and answer any questions buyers may have.

The 8 Key reports

  1. Legal Situation
    Seen as the foundation report for all other reports. Establishes the legal entity(s) involved in the transaction, contracts, key legal documents, outstanding or impending litigation and other legal matters.
  2. Tax Situation
    Tax returns, tax audits and current and future tax liabilities.
  3. Financial report
    Provide the last 3-5 years financial information, a complete breakdown of the company’s balance sheet, audit reports, financial planning for next 12 months and more.
  4. Market, Industry and Strategy
    Overview of the market in which the company operates. Economic, industry factors affecting the business – positive and negative. How is the company differentiated from competitors? What is the marketing strategy? Sales pipeline.
  5. Environmental
    Are there environmental impacts on the company? Are there environmental obligations?
  6. Insurance Coverage
    Confirms the types and level of insurance in place. Confirms any claims made on insurance policies.
  7. Technology
    What is the technology used by the company to manufacture/create/deliver its product or service? What is the technology used to support the administration of the business?
  8. Employees
    This is a human resources report. An overview of employees, their roles and positions in the company. Includes level of experience within the company, pay levels and achievements.

These 8 reports outline a wide selection of documents that need to be presented, most likely to multiple buyers, as part of the due diligence process.
The storing of critical documents must be done in such a way as to give each potential buyer an equal opportunity to review the company information and ask any due diligence questions.
The security, confidentiality and access to these documents must be tightly controlled through the due diligence process.
The docurex cloud based “dataroom” is a popular solution that helps the seller organise and control access to confidential information as part of the business sale.

CC Steve Wilson Flickr - Due Diligence

Discover the Importance of Due Diligence

The business world relies on the due diligence process on such a regular basis that it is often taken for granted.

However, it is worth reminding ourselves of the important role due diligence plays and how it helps companies make well informed decisions.

A Definition of Due Diligence

The term “Due Diligence” is used in business to describe to the process by which a purchaser will collect information and analyse a transaction before agreeing to or rejecting the deal.

The more thorough the due diligence carried out by a purchaser, the greater the chance they have of making a correct assessment of a transaction.

The following excellent explanation of the purpose of due diligence comes from www.investinganswers.com.

“Due diligence helps people and companies understand the nature of an investment, the risks of an investment, and how (or whether) an investment fits into a particular portfolio. Due diligence isn’t just good sense, it’s a duty investors owe to themselves — doing this sort of “homework” on a potential investment is often essential to making prudent investment decisions.”

The Facts Come First

The purpose of the due diligence process is to collect facts and information.

In the first instance it is not meant to generate immediate conclusions or opinions. Due diligence should be focused on gathering the facts and nothing but the facts of a particular situation.

It is typically up to the purchaser in a transaction to determine the information they need to make an informed decision. The purchaser must then present the requests for information and the seller will then collate the information and present their response.

Once all the facts have been gathered it is then possible for the relevant experts and professionals to analyse the data to assess the viability of the transaction. The quantity and quality of relevant and timely information that is gathered will directly affect the quality of the analysis of a deal.

Assessment of Risk and Opportunity

Every business transaction has an element of risk and an element of opportunity.

It is the duty of a purchaser to discover as much as possible about a particular transaction to identify those risks and opportunities.

For example: When buying a company, the purchaser must understand the level of obligations the company has – payroll, creditors, contracts, debts, legal, regulatory and environmental to name a few. Without a clear picture of these obligations a purchaser will not fully understand the risk they are accepting in buying the company.

On the other hand, there are opportunities to be identified as a result of the due diligence process. These opportunities include Information on regulatory changes that may give the company a new advantage in the marketplace, a new product may be in development but not yet announced or the introduction in new technology may dramatically reduce costs and increase margins.

It is important a purchaser uses the appropriate experts and professionals such as accountants and lawyers to assess both the risk and opportunity.

In summary, due diligence is the vital process by which companies gather and then analyse information about a transaction so they can make an informed decision.

The upfront effort placed into due diligence will potentially save or make millions of euros for a company. Company executives ignore due diligence at their peril.