The current mergers and acquisitions (M&A) market is giving many business owners a once-in-a-lifetime opportunity to retire wealthy. That’s according to Offit Kurman attorney Michael N. Mercurio and Dan Doran of Quantive Business Valuations. In the midst of a record-breaking summer of transactions, Mike and Dan recently sat down together to discuss why so many business owners are choosing to sell right now.
“The M&A market’s hot—the words that we keep using are ‘generationally best sell-side market,” said Dan. “We have a financing environment where debt is cheap, capital is available, and we can get deals done from the buy side. Growth through acquisitions still makes sense, and that obviously plays into the hands of a seller.”
“Just last month,” added Mike, “I closed six deals, which is really at historical levels.”
Given all this activity, Mike, and Dan, and M&A experts around the US are advising their sell-side clients to prepare for sale now if possible. The market won’t stay hot for much longer, they say, and the next opportunity to maximize sales value may be five or ten years out.
Is right now the right time for you to sell, or should you continue operating your company through the next downturn? To help you determine which choice is right for you, Offit Kurman has developed the following exit planning roadmap.
But before you chart your course, consider the following pieces of advice from Mike and Dan:
- Keep your talent in mind. The value of an organization largely rests on its key employees. Consider your risks of turnover in the next few years. If you are unable to sell your business now, make sure to secure your top talent.
- Don’t jump into an LOI. A letter of intent (LOI) is typically not a legally binding document, but it does set the general terms for a transaction—and once it’s been signed, a seller cannot go back. Work with a qualified M&A advisor to negotiate the best possible LOI with a prospective buyer.
- Remember: time is the enemy of deal flow. In Dan’s words, “the passage of time is not a strategy.” By delaying the sale of your business, you are not necessarily increasing its value. On the contrary, organizations whose owners wait too long frequently lose value. Moreover, owners should consider if they can adequately continue running the business during an economic downturn.
Check out Offit Kurman’s exit planning infographic below. To discuss your options with an experienced M&A legal advisor, contact Mike Mercurio at firstname.lastname@example.org or 301.575.0332.
ABOUT MIKE MERCURIO
Mr. Mercurio is a Principal and the Chair of the Firm’s Business Law and Transactions Practice Group. He serves as outside general counsel to clients on matters related to corporate and business law, commercial transactions, government contracting, health care, construction services, and real estate. As a strategic partner to firm clients, Mr. Mercurio regularly counsels entrepreneurial individuals and assorted entities on all aspects of business and commerce including formation and structure; ownership, management and control; financing and capital; expansion and acquisition; sale and transfer; and contraction and dissolution.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 170 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our twelve offices serve individual and corporate clients in the Virginia, Washington, DC, Maryland, Delaware, Pennsylvania, New Jersey, and New York City regions. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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