Selling a business (asset or company) should not be difficult. All a seller is ordinarily required to do is to deliver the business in exchange for payment. But this is not really the case for a seller in a Merger & Acquisition (M&A) transaction. The M&A sale process is complex and time-consuming, thereby requiring careful planning and strategy. In fact, it is common knowledge that a sale could fall through at any stage before the deal is closed. And even after a deal is closed, the seller will need to meet completion requirements before the purchase consideration will be fully paid. In some cases, even after completion, purchase consideration may be deferred to a later date or clawed back by the buyer in peculiar circumstances.
The primary rationale for selling a business in almost all cases is to receive value (cash) for the investments made in that business. There may be other secondary or even primary reasons for selling. Possible sale rationales have been discussed in a previous article – ‘The “Why” Behind Mergers and Acquisitions (The Why for M&As). The focus of this paper is how to sell in order to obtain the best possible value –; not ‘why’ you are selling.
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