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.
- 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.
- 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.