Finding the Right Buyer that Meets Your Sale Criteria

April 12th, 2010

When multiple seller objectives come into play,
A trusted advisor can keep the process on track

Every agency sale is a unique story, and there are often unexpected twists and turns along the way.  Having an experienced advisor representing you in a company sale keeps the process on track despite these setbacks, so you can focus on maintaining your business.

Challenge
The owners of a collection agency wanted to sell the business.  It was a well-managed company, with a good client list and no debt. Two of the owners were retiring from the business and wanted to maximize the amount of cash at closing.  The other two owners were also interested in staying with the company after the sale to serve in a sales and marketing capacity.  The owners needed to find a buyer that could meet their value expectations at sale; and that would also be interested in keeping the two former owners in place.

The Kaulkin Ginsberg team served as advisors to this agency. They knew immediately that it was a perfect acquisition opportunity for a larger agency and there would be a lot of buyer interest. However, they also understood that this sale would require a high degree of facilitation between the seller and potential buyers before a successful transaction would take place.

Solution
Kaulkin Ginsberg reached out to a shortlist of qualified and motivated buyers, and the agency quickly received an offer that met their value expectations and the transaction proceeded to a signed Letter of Intent.  During the due diligence process however, it was apparent that the buyer was not a good cultural fit with the agency and that the two owners who wished to stay with the company would not work well with the buyer’s management team.  Kaulkin Ginsberg was committed to making the right transaction for the agency – not the most expedient one – so they terminated the sale and returned to the market.

When selling an agency, returning to the market is often a difficult proposition.  Potential buyers that were aware of the sale initially may reduce their offers.  There is an increased risk of word leaking out about the potential sale, causing a loss of clients or employees.  At one point in this sale, a transaction with a potential buyer needed to be put on hold while the agency dealt with an internal issue.  Throughout the process, Kaulkin Ginsberg quietly worked to identify buyers and keep them engaged while the agency focused on successfully running the business.

Result
One year after they decided to sell, the agency successfully merged with a larger firm in January of 2010.  The transaction met their criteria for value and for culture fit, and the two former owners are now working for the company in sales positions.

What can we do for you?

Contact Mike Ginsberg, at 240-499-3800 or by email to discuss your interests in confidence.

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