Whether you’re moving on to another business or retirement is calling your name, the process of selling your business isn’t just a sales transaction--it’s a life transition, and it should be treated as such. Sigma’s DealMap selling approach minimizes unwelcome surprises during the sales process and ensures we find a buyer who checks all of the boxes, not just the financial ones. Find out more about what makes Sigma’s process different.
Replica of an East Indiaman of the Dutch East India Company/United East India Company (VOC). A pioneering early model of the public company and multinational corporation in its modern sense, the VOC was formed in 1602 from a government-directed consolidation/amalgamation of several competing Dutch trading companies (the so-called voorcompagnieën). It was possibly in fact the first recorded major consolidation[29][30] and is generally one of the most successful mergers (in particular amalgamations) in the history of business.[31]

In corporate America, the 1990s will be remembered as the decade of the internet bubble and the megadeal. The late 1990s, in particular, spawned a series of multi-billion-dollar acquisitions not seen on Wall Street since the junk bond fests of the roaring 1980s. From Yahoo's 1999 $6 billion purchase of Broadcast.com to At Home Corporation's almost $7 billion purchase of Excite, companies were lapping up the "growth now, profitability later" phenomenon. Such acquisitions reached their zenith in the first few weeks of 2000.


Thinking a broker will do all the work in promoting your sale can be deadly. You are the best promoter for your business. Who knows your business better than you? No one is more motivated, passionate and knowledgeable about your business than you. A broker may be getting you some activity, but it's important that you continue to promote yourself as well.
Evaluate your options and make the best selection for the long term. Ask yourself, is this the best person to buy and run my business? Or, can they quickly connect with my customer base and learn how to market effectively? When the business sale goes as planned, it creates a tremendous opportunity for both business owners and the success continues.

Most often value is expressed in a Letter of Opinion of Value (LOV) when the business is being valued informally. Formal valuation reports generally get more detailed and expensive as the size of a company increases, but this is not always the case as the nature of the business and the industry it is operating in can influence the complexity of the valuation task.


You’ll be able to go through the negotiation process feeling comfortable that your business will be in good hands, and will be able to reassure employees, clients and even vendors that the mutually respectful, solid relationships you’ve created over the years will be carried on by a new owner who is also interested in their well-being and happiness.
Finding the right broker and/or consultant to help you sell your business is crucial to your success. Often business owners go with the first person they meet just to list their business and get the process going. This can cost you time and money in the long run. Within a few months, you may see no results and have to go on the search all over again. Taking time to interview many brokers and looking at a realistic outcome of what is expected will get you going in the right direction.
Provisions relating to obtaining required shareholder approvals under state law and related SEC filings required under federal law, if applicable, and terms related to the mechanics of the legal transactions to be consummated at closing (such as the determination and allocation of the purchase price and post-closing adjustments (such as adjustments after the final determination of working capital at closing or earnout payments payable to the sellers), repayment of outstanding debt, and the treatment of outstanding shares, options and other equity interests).
In the long run, due to desire to keep costs low, it was advantageous for firms to merge and reduce their transportation costs thus producing and transporting from one location rather than various sites of different companies as in the past. Low transport costs, coupled with economies of scale also increased firm size by two- to fourfold during the second half of the nineteenth century. In addition, technological changes prior to the merger movement within companies increased the efficient size of plants with capital intensive assembly lines allowing for economies of scale. Thus improved technology and transportation were forerunners to the Great Merger Movement. In part due to competitors as mentioned above, and in part due to the government, however, many of these initially successful mergers were eventually dismantled. The U.S. government passed the Sherman Act in 1890, setting rules against price fixing and monopolies. Starting in the 1890s with such cases as Addyston Pipe and Steel Company v. United States, the courts attacked large companies for strategizing with others or within their own companies to maximize profits. Price fixing with competitors created a greater incentive for companies to unite and merge under one name so that they were not competitors anymore and technically not price fixing.
In corporate America, the 1990s will be remembered as the decade of the internet bubble and the megadeal. The late 1990s, in particular, spawned a series of multi-billion-dollar acquisitions not seen on Wall Street since the junk bond fests of the roaring 1980s. From Yahoo's 1999 $6 billion purchase of Broadcast.com to At Home Corporation's almost $7 billion purchase of Excite, companies were lapping up the "growth now, profitability later" phenomenon. Such acquisitions reached their zenith in the first few weeks of 2000.

Information:[44] documentation delivered to a buyer may be scarce with a limited level of reliability. As an example, double sets of accounting are common practice and blur the capacity to form a correct judgment. Running valuation on such basis bears the risk to lead to erroneous conclusions. Therefore, building a reliable knowledge base on observable facts and on the result of focused due diligences, such as recurring profitability measured by EBITDA, is a good starting point.

Buyers aren’t necessarily hungry for the target companies’ hard assets. Some are more interested in acquiring thoughts, methodologies, people and relationships. Paul Graham recognized this in his 2005 essay "Hiring is Obsolete", in which he theorizes that the free market is better at identifying talent, and that traditional hiring practices do not follow the principles of free market because they depend a lot upon credentials and university degrees. Graham was probably the first to identify the trend in which large companies such as Google, Yahoo! or Microsoft were choosing to acquire startups instead of hiring new recruits,[36] a process known as acqui-hiring.

In my case, I signed up with the first broker I spoke with. He seemed like the perfect person to sell my business. After all, he had a background in retail (and that was my industry), he was friendly and best of all he came up with a BIG price tag. Unfortunately, it was too good to be true because he was asking too much. By raising the price he got me to sign the contract but never made the sale. After six wasted months without even a lead, I finally decided to move on. Learning from my mistake, I interviewed 12 more brokers before signing another contract.

In the long run, due to desire to keep costs low, it was advantageous for firms to merge and reduce their transportation costs thus producing and transporting from one location rather than various sites of different companies as in the past. Low transport costs, coupled with economies of scale also increased firm size by two- to fourfold during the second half of the nineteenth century. In addition, technological changes prior to the merger movement within companies increased the efficient size of plants with capital intensive assembly lines allowing for economies of scale. Thus improved technology and transportation were forerunners to the Great Merger Movement. In part due to competitors as mentioned above, and in part due to the government, however, many of these initially successful mergers were eventually dismantled. The U.S. government passed the Sherman Act in 1890, setting rules against price fixing and monopolies. Starting in the 1890s with such cases as Addyston Pipe and Steel Company v. United States, the courts attacked large companies for strategizing with others or within their own companies to maximize profits. Price fixing with competitors created a greater incentive for companies to unite and merge under one name so that they were not competitors anymore and technically not price fixing.

Hiring: some companies use acquisitions as an alternative to the normal hiring process. This is especially common when the target is a small private company or is in the startup phase. In this case, the acquiring company simply hires ("acquhires") the staff of the target private company, thereby acquiring its talent (if that is its main asset and appeal). The target private company simply dissolves and few legal issues are involved.[citation needed]
The buyer buys the assets of the target company. The cash the target receives from the sell-off is paid back to its shareholders by dividend or through liquidation. This type of transaction leaves the target company as an empty shell, if the buyer buys out the entire assets. A buyer often structures the transaction as an asset purchase to "cherry-pick" the assets that it wants and leave out the assets and liabilities that it does not. This can be particularly important where foreseeable liabilities may include future, unquantified damage awards such as those that could arise from litigation over defective products, employee benefits or terminations, or environmental damage. A disadvantage of this structure is the tax that many jurisdictions, particularly outside the United States, impose on transfers of the individual assets, whereas stock transactions can frequently be structured as like-kind exchanges or other arrangements that are tax-free or tax-neutral, both to the buyer and to the seller's shareholders.
As synergy plays a large role in the valuation of acquisitions, it is paramount to get the value of synergies right. Synergies are different from the "sales price" valuation of the firm, as they will accrue to the buyer. Hence, the analysis should be done from the acquiring firm's point of view. Synergy-creating investments are started by the choice of the acquirer, and therefore they are not obligatory, making them essentially real options. To include this real options aspect into analysis of acquisition targets is one interesting issue that has been studied lately.[13]
The median asking price of businesses for sale grew 12.5 percent in 2015 to $225,000, up from $200,000 in 2014, according to BizBuySell.com, an online marketplace with more than 40,000 business listings for sale. The entities are selling on average for about two to three times their annual cash flow and at 90 percent of the asking price, according to the website.

Achieving acquisition success has proven to be very difficult, while various studies have shown that 50% of acquisitions were unsuccessful.[4] "Serial acquirers" appear to be more successful with M&A than companies who make an acquisition only occasionally (see Douma & Schreuder, 2013, chapter 13). The new forms of buy out created since the crisis are based on serial type acquisitions known as an ECO Buyout which is a co-community ownership buy out and the new generation buy outs of the MIBO (Management Involved or Management & Institution Buy Out) and MEIBO (Management & Employee Involved Buy Out).
In general, stock will create financial flexibility. Transaction costs must also be considered but tend to affect the payment decision more for larger transactions. Finally, paying cash or with shares is a way to signal value to the other party, e.g.: buyers tend to offer stock when they believe their shares are overvalued and cash when undervalued.
Succession planning is a major misstep by retailers. Even if you do not have a successor who is a relative, you are still thinking like a succession planner. The person "succeeding" you needs to be set up for success. If they see you have been planning and considering this for quite some time and that it's not a quick "I've had enough" sale, your price will be much higher. Add to that the confidence the buyer will have in a retail store purchase if they see there was a strategy for the sale and that it's not driven out of desperation.

^ Gelderblom, Oscar; de Jong, Abe; Jonker, Joost (2011), 'An Admiralty for Asia: Business Organization and the Evolution of Corporate Governance in the Dutch Republic, 1590–1640,'; in J.G. Koppell (ed.), Origins of Shareholder Advocacy. (New York: Palgrave Macmillan, 2011), pp. 29–70. Gelderblom, Jonker & de Jong (2010): "The hot rivalry between the voorcompagnieën undermined the country's fragile political unity and economic prosperity, and seriously limited the prospects of competing successfully against other Asian traders from Europe. ... According to Willem Usselincx, a large merchant well versed in the intercontinental trade, the VOC charter was drafted by bewindhebbers bent on defending their own interests and the Estates General had allowed that to pass so as to achieve the desired merger (Van Rees 1868, 410). An agreement was finally reached on March 20th, 1602, after which the Estates General issued a charter granting a monopoly on the Asian trade for 21 years (Gaastra 2009, 21-23)."
“Baby needa burpie?! Yeees?? [burp] Oh! WHOOOZa good baby? YOU are! Yeeesssssyouare!” Whether you find this adorable or aggravating, gaggles of parents around the world speak to their infants in singsong “goos” and “gahs.” The style has diverse names, from baby talk and motherese (but what about Dad?) to the neutral and more official-sounding child- or infant- directed speech. Whatever you choose to call it, …
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