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We recently facilitated the sale of a 3rd-generation manufacturer; the family wanted to monetize their legacy with the right buyer

March 7, 2024

The first time we brought this business to market, we received interest from 187 potential buyers and received bids from 12 buyers. Our client ended up signing a letter of intent with a large strategic company that made sense on paper and had a high likelihood of closing. However, during the confirmatory due diligence, the buyer was dragging their feet, not spending money on outside firms to assist, causing delays in reaching an equitable closing date. Due to this, we parted ways with that buyer and remarketed the company.

When we remarketed the company, 95% of the buyers who expressed interest didn’t show up on the prior marketing, so we had fresh tension, with multiple buyers chasing the company. Our client ended up signing a letter of intent with a large strategic buyer they never heard of before who was looking to get a geographic footprint in the market our client was in; furthermore, our client felt their legacy would be in good hands with this buyer.

While we were under LOI with this buyer, our client’s business started to slightly decline, causing the buyer to renegotiate the deal. Our closers communicated the changes the buyer requested and negotiated fair terms that met our client’s value expectations.

Our objective is to always get a deal done the first time out, however, we never want to be in a position where we’re chasing the buyer, adhering to their timeline. The shortage in the U.S. and Canada now isn’t buyers or money, it’s profitable businesses coming to market. Historically, 90% of the buyers who express interest in a company we remarket didn’t show up on the prior marketing, and our clients don’t see any dilution of value; many times the value they close at on a remarketing is higher than the initial LOI they signed. Make no mistake, once we’re under a letter of intent with that deal our client wants, we problem-solve to close on the closing date. That being said, optimally, it’s best to have the courage to walk away if a buyer isn’t acting like a buyer or if the terms and conditions become unreasonable for our client.

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