Trade Sale

Trade Sale

A popular and clean way of exiting a business is the trade sale option. This allows the owners to partially or fully withdraw from the business and dispose of the company’s shares or assets – and even some or all its liabilities – to a trade buyer.

Upsides

  • Provided the business value has been optimised, then the number one upside is cash up-front and financial security for shareholders.
  • Owners don’t have to worry about who will run the business and all shareholders receive their pro-rata share of the cash.
  • If the business has benefited from an improvement initiative prior to sale – refer to our optimisation program on the Home Page – the shareholders will benefit from the premium associated with being a must-have company.

Downsides

  • Even where the business is sound, a new buyer will try to change things. They cannot help themselves. If the owners wish their legacy to endure, then selling to a 3rd party will put this at risk.
  • Should the owners not receive the bulk of the sale proceeds as cash at closing, then they are putting themselves at risk.

Important The choice of transition strategy requires careful consideration of the consequences and trade-offs involved. We devote a lot of time with clients in choosing the smartest transition decision, that is aligned with individual circumstances.