September 21, 2020

Considering Selling Your Business? 5 Principles to Ensure Successful Deal Execution

Selling your Business

While concerns over COVID-19 spread across the US in mid-March, economic activity came to an abrupt halt and deal-making took a pause, but not for long. Amid the pandemic, CBIZ CMF continues to assist founder-led organizations in divesting to private equity firms. 

These transactions have shaped our viewpoint on what companies should consider when selling. To ensure successful deal execution during COVID, CBIZ CMF recommends the following: 

  1. Accept and understand the implications of COVID. Recognize that the deal process will be different, longer, and not in-person. Acknowledge that buyers and their advisors will require more context and discussion to get a flavor for the business.
  2. Leverage technology to improve collaboration and communication. Embrace technology to enable and enhance discussions, collaboration, and communication across the deal lifecycle. Utilize screen sharing, document links, and interactive video calls. 
  3. Be innovative in circumventing challenges posed by COVID. In the course of the deal, adopt innovative solutions to work around the challenges posed by COVID. Consider recording the initial management pitch and the virtual site or factory visit for buyers.
  4. Supplement technology with traditional relationship building. Make it a point to get on one-on-one video and voice calls (rather than email) with the management team. Use these interactions as opportunities to get to know work-adjacent or non-work related information about management. 
  5. Understand the COVID factor in deal negotiation. COVID and its medium- to long-term implications are at the forefront of all parties in deal-making. With no clear consensus on this, be prepared for this uncertainty to permeate deal negotiations. Specific focus must be on protective rights and the nature, timing, and thresholds of contingent and guaranteed payouts.

CBIZ CMF's experience in bringing each of these five fundamental principles to the forefront has allowed our clients' continued deal success. For more information on how we can help businesses during these complex times, please contact Paul Herman

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