What are some key considerations that a family business should consider/be aware of prior to selling to a strategic buyer or PE?

like
Posting as :
works at
You are currently posting as works at

A strategic buyer will almost always pay more for a business except for in exceedingly rare cases

like

Another one that agrees with me, https://corporatefinanceinstitute.com/resources/valuation/strategic-buyer-vs-financial-buyer/

Integration plans and post transaction responsibilities, survival and limits on reps and warranties, etc. prudent to hire a transaction attorney or banker

like

True. But that’s if the deal is structured that way. Many founders don’t want contingent based earnout agreements because they want out. That’s why OPs question really depends on what the founders ultimate motivations and goals are. Hard to answer in a generalized way.

Key considerations should really stem from the founders motivation to sell. He or she should have a clear idea in their mind of what the biz is valued (fairly) and what they’d like to walk away with. If they have other motivations around retaining employees etc. then that’s another factor but it all stems from what the founder wants.

like

Need to decide reasoning for the sale. Your buyers motivation will dictate the considerations. If looking for liquidity to the founder, also look into establishing a leveraged ESOP as a strategy. That is pretty common for family business and you don’t have to introduce an outside influence. There are drawbacks also to consider because an ESOP will have to adhere to qualified plan rules and can be costly to set up properly.

If you decide to stick around, you can buy in with the PE and make a big bonus on the exit. Culture for PE is usually worse, faster pace, high expectations.

Related Posts

Working with a Junior AD who’s too opinionated & doesn’t respond to my feedback well. He’ll just show ideas that I’ve already debunked/scripts that aren’t very good, which makes me look bad. Advice?

like

How often do you respond to emails from law students who want to learn about your firm/practice area? I get like a dozen requests right around OCI every year. Frankly I’m tired of speaking to them and answering the same boring questions, especially if I know they have a low GPA and no chance of summering at my firm, but I do feel bad saying no/ignoring them

like

I accepted a position and i don’t start until December 7th. I’m the only accountant on the team at my current company (small company). Would you tell them now or wait until two weeks before you start at new job?

like

Hearing of layoffs with some Chicago agencies. MSL...Porter...Ketchum...others? Sign of bad economy coming? Hate to sound skittish, but I lived through 2008

like

So my partner will be getting laid off 4/15. 🥺

Let the games begin, and may the odds be ever in your favor.

likehelpful

What was the hardest class year for you? I used to think first year was by far the hardest but now I’m a third year and I’m really feeling the pressure to step up. I work in finance and at this point I’m expected to handle closing documents, manage first years, draft some portions of major docs, etc. I feel like I’m always frazzled, constantly second guessing if I handled something correctly and anxious to answer calls from clients/OC. The worst part is I think people can tell I’m a mess....

likefunny

Going to India from DCA (flights were cheaper) but I live in Houston. Flight from DCA is at 10 pm. Should I book my flight from Houston to DC the same day or one day earlier? Given the flight cancela.

like

pro tip. purchase baby foot exfoliate. but make sure you do it at home.

like

How can I extract just the year into a new cell from a “yyyymmdd” cell (labeled PD here) that isn’t recognized as a date? I basically need to sort this data by year. Thanks in advance!

Post Photo
like

Is it outlandish to think I can find a decent 1B 1B apt w/ in unit washer-dryer and 15-20 min away from center city for under 1300? Have some time to do searching but don’t know if gems at this amount even exist

like

What law firm is your favorite for run of the mill employment issues in the US and internationally (India, Australia, UK, Germany, etc.). I primarily use Littler because they have a broad reach and decent rates but I’m wondering whether Bird & Bird, Ogletree, or some other firm has similar pricing and as good or better quality work. So, who are you using and are you happy?

like

How does pwc’s wealth builder plan work ?

like

Has anyone left big 4 or other PA firms tax transaction service groups for industry (or know of anyone)? What was the role and salary bump, how are annual bonuses/raises in industry, what is a typical work week (hours) like? I don’t think I can take this always on just to stay afloat life much longer. For context I am considered a high performer, am near the top of the salary band at my level and have a great supporting network at Deloitte. It’s just not worth it to have zero personal life.

like

Remeber the time when "Things To Do in Chicago This Weekend" included something other than a bunch of links to remote this and online that, and were actually REAL things that people did IRL?

like

US peeps, what are you doing for thanksgiving?

like

The “Pour one out for the L train” ads by Kombucha are part of the problem... cont

like

Hi fishes,

I came across a position at JPMC that best fits me. Can someone please help me with the referral.

Thank you in advance.

Hi. I wanted to pursue a course in data science. Anyone knows how is it?

like

Which opportunity is better in terms of exit ops and M7 MBA acceptance? Undecided on exits, looking at corp dev, in-house M&A or strategy into tech

Deloitte M&A SDV vs A&M PEPI MAS

like

Hi fishes, hope you are doing well. Needed some guidance regarding isb selection process and profile building strategies. GRE vs GMAT which is preferred or difficulty level which should be preferred.

like

Additional Posts in M&A - Mergers and Acquisitions Professionals

like

Why do private equity firms use M&A consultants?

like

If I want to transition into M&A from audit, what are some basic things I should consider?

like

What do you look at in the 3 statements on a deal?

like

I am moving from audit to deal advisory, where do you think is bettter corporate finance or TS ? And i am changing my certificate from ACCA fo CFA. your advice is much needed thank you

like

Any insights for KPMG Strategy - Deal Advisory within the Global Strategy Group (Experiences, Exit Opps, Salary)?

like

ACCA and CPA qualifications. How useful are they in the line of consulting. I work in the M&A space focusing on FDD. Happy to have a chat to see what qualifications if any are actually useful in our line of work.

like

Deloitte Consulting's M&A team is hiring IT M&A professionals for their Dubai office (United Arab Emirates, Middle East)

If interested, please reach out for more color

like

Is Assistant Director at EYP same as Senior Manager at Accenture?

like

Anybody have any reccomended templates / resources to point to for M&A target screening?

like

Working in Risk Advisory-Internal Audit at EY. Looking to move into valuations. Have knowledge of valuations through FRM and CFA level 2 but no direct valuations experience. Anyone willing to help?

like

Any McK fuel people in here? Kinda curious about this segment in reference to deal structure. Is it all commercial debt?

like

Are all the other big for equivalents of pwc ddv paying more than pwc? i’m a MBA senior associate making 153.

likefunny

Anyone from Deloitte M&A practice can chat about roles? I have questions in regards to M&A start manager and M&A integration.

like

Which firm has the best deals practice?

EY-P is actively recruiting for experienced hires (senior - senior director) . We are a fast growing team and would love to bring more members aboard! If you have prior strategy / operations experience feel free to pm me to see if you are a good fit. Happy to refer.

like

Considering a move from a B4 to the West Monroe deals practice. Any insights from people working there or who worked there?

likefunny

How does a dividend recapitalization work? Can you do a dividend recapitalization to take out equity and then sell the business after? How would this impact valuation of business down the line?

like

Align to non-M&A offering but do a lot of work in the space (DD, integrations). B4 recruiter reached out and wants me to provide resume@for review with hiring partner. Does it work if I provide a bio with summary of M&A projects (client names removed) instead of a traditional resume? Also plan to list education and previous roles.

like

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the
Fishbowl app

See what’s happening in your industry
from the palm of your hand.

A phone with Fishbowl app

Scan your QR code to download
Fishbowl app on your mobile

Download app

Sign up for free to view this conversation on Fishbowl

By continuing you agree to Terms of Use and Privacy Policy

Already have an account? Log in

Sign up for free to continue using Fishbowl

By continuing you agree to Terms of Use(New) and Privacy Policy(New)
Messaging rates may apply

Already have an account? Log in

For account settings, visit Fishbowl on Desktop Browser or

General

Legal