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Selling Your Company–Removing the Obstacles to Success

By: George Spilka
Posted: January 10, 2008, from the January 2008 issue of GCI Magazine.

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3. A seller’s position is not weakened if it takes a long time to sell a company. If market conditions force an abnormally long sale period, it can work to the seller’s advantage. A delay will, in fact, fortify a seller’s ability to sustain pricing expectations.

4. Sellers must emphasize to the acquirer that they are aware of the entry advantages in buying a company as opposed to entering a market through a “Greenfields Approach,” a market entry scenario in which entrance is gained through a new geographic area or product market by developing operations and a sales base from scratch. The advantages of entering a market through acquisition have been documented by many studies, showing that a strong entry position into your market is easier and less expensive to obtain by acquisition than by competition.

5. Get a tough, knowledgeable negotiator for an advisor—one who understands the corporate culture of large companies and is aware of the differences that are often present between the personal objectives of the acquirer’s corporate development executive handling the deal and the goals and objectives of the operating personnel pushing the acquisition for the prospective purchaser.

The advisor must know how and when to involve the operating personnel in the negotiating process and how to make their desires to obtain the operating and marketing benefits of the seller the driving and guiding force that will govern the acquirer’s final decision to pursue and price the deal. An advisor must be able to conceptualize the flow of the deal from inception to completion. They must perceive the problems that might be faced at various junctions of the deal and the appropriate responses to those problems, and must employ the deal strategy that will assure the seller’s realization of a premium price.

6. Obtain an advisor who has access to foreign strategic acquirers. This will tremendously increase the breadth of acquirers available to purchase the company.