Get a Third Party Opinion

Fairly often, we get approached to assist in a transaction that is already well down the road. Certain agreements have been made, and expectations are set. In many instances a buyer and seller have a relationship by virtue of being an existing customer, family member, friend, or partner.

Over time the two sides have come together to discuss a potential deal and decide on price and terms. This might include a partnership’s buy/sell agreement.

Emotions are in play, trust has been developed, but generally there is a winner and loser because the parties don’t ask for outside assistance at the proper time. Due to the existing relationships, the tough questions don’t get addressed, the value doesn’t get analyzed, and due diligence might get waived. Someone in the deal is either paying too much for the business or getting a steal. In either situation there are going to be hard feelings and maybe future legal challenges.

The easiest way to make a deal happen and to improve the odds of a good deal for both sides is to have a third party review the proposed transaction, facilitate discussions, test the value, and bring professionals that are familiar with how to get deals done.

A third party could be an M&A professional, mediator, or neutral attorney. Keep in mind that whomever you bring in to help with a deal needs to have years of experience doing transactions and can familiarize both sides with the process of buying and selling businesses.

Before you agree to a value on the sale or purchase of a business, contact Apex Business Advisors. Any one of our team members would be happy to discuss your situation and assist you in your review.