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assembling the right transaction team

Assembling the Right Transaction Team: Tips for Selling Your Company Successfully

Many Moving Parts Drive a Sale

As you consider selling your company, there are many different topics that, as an owner, you may need to assess. In evaluating whether to sell, an owner’s time and energy can become focused internally as they question whether the appropriate management team exists, if the business is financially ready for a transition, and what impact a sale or merger may have on existing employees.

While trying to answer these questions, the owner (and/or management team) should also focus energies externally. Once company management determines it wants to explore the possibility of a transition or sale, the business should build a transaction team of outside professionals to assist with the various questions that come up in the process.

The Key Players on the Team

While not all transactions are cookie-cutter, most require external professionals that are retained to assist the company during a sale process. Most transitions involve:

  • a corporate lawyer to document the transaction
  • an investment banker or business broker who focuses on assisting the company to maximize the value at sale
  • an accountant, financial advisor, or valuation expert with the proper certifications
  • an emerging trend towards retaining an exit planning advisor

If you are contemplating an ESOP transaction for your company and employees, there are additional specialized professionals who may also take a spot on the roster. In addition to the aforementioned professionals, a successful ESOP transaction will also involve an ERISA lawyer, and an appraisal firm that has a background in being involved in ESOP transactions.

Additionally, the company, as opposed to the owner, will appoint a trustee which is either a bank or trust company that specializes in ESOPs.

Building the Right Transaction Team

Identifying the types of professionals that you may need to execute your vision is only half the battle. The other half is ensuring that your outside advisors are aligned with the common goal. When everyone who works for your company is aligned with the same vision and values, it positively impacts the business’s image and the results it can achieve.

To attract a team of advisors, an owner should ask for recommendations, interview prospective professionals, as well as assess which professionals are focused on your needs and goals. Part of this process is spending time with the potential members of the outside advisory team, evaluating their personality, acumen, experience, and ability. There should be shared values that you hold dear, such as integrity, growth, and excellence.  Additionally, it is essential to have a balance between the characteristics, talents and skills that your advisory board brings to the table in order to find the right synergy for the transaction.

For instance, the transaction lawyer should be an intricate player. While a company may have a go-to outside corporate counsel, many CEOs find that their long-term business lawyer may not be the most ideal fit to assist with a transaction.

Hire a Deal Lawyer for an Outside Perspective

Sometimes the business lawyer can be too close to the company. Whereas as a deal transaction lawyer, on the other hand, can evaluate the deal from an outside perspective and can focus on the deal as an expert in corporate sale transactions. This can ultimately expedite the process.

CEOs tend to understand that while they have to be the decision-maker; they need an honest appraisal of the business, it’s worth, and where value can be maximized. This is why many companies work with investment bankers and business brokers. Their interest lies in completing the deal along with maintaining perspective on the company’s marketplace value.

Bringing the Team Together

When selecting your team of professionals, it is also a good idea to hire those who have previously worked well together.  It is important to know whose personalities mesh well, this will make it easier to create a solid transaction team.

Your transaction team should be familiar with each other, aligned in the approach, strategy, and vision for the prospective transition you are planning for the company. The team should also be aligned with your decisions and you should feel open and comfortable sharing your strategic plan. Lastly, the team should feel comfortable sharing honest feedback with one another.

Time and Good Communication Boosts Success

Once completed, you will have a team that can be led towards the end-goal; a sale of the business. The transaction team did not form immediately, it might have taken time to accumulate the team, however, these advisors share your daily focus and goals. They assist you on a professional level, and help you plan for your long-term success. Ultimately, the team is knowledgeable about your business operations, financial management, and willing to work alongside your management team, anticipating your timely needs instead of you having to wait for them to.

As you contemplate the sale of your company, it is important to remember that the process is not always immediate. It can take years to plan a transition, or sale, and for it to materialize as you focus on maximizing the value of the business you have built. Continuing the evaluation process as you move through this transition may lead to removing or adding new members to the team to maximize the value of your transaction. As the CEO, continuously evaluating your team will assist you in ensuring you actualize your vision and you succeed in reaching your goals.

[Editors’ Note: To learn more about this and related topics, you may want to begin reading the series, Business Transition and Exit Planning and/or attend the following on-demand webinars (which you can listen to at your leisure and each include a comprehensive customer PowerPoint about the topic):

This is an updated version of an article originally published on March 20, 2019]

©2022. DailyDACTM, LLC d/b/a/ Financial PoiseTM. This article is subject to the disclaimers found here.

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