M&A Nugget: Time to Sell? Hmmm
According to an article published in the Financial Times on September 27, 2018, global merger and acquisition activity has hit an all-time high, with transactions worth nearly $3.3 trillion dollars having occurred this year, an almost forty percent increase from 2017. Indeed, locally, mergers and acquisition activity is proceeding at a hectic pace. Does that mean that it is time to sell your business? Maybe. Although valuations are high and buyers are plentiful, sellers should think twice about engaging in a premature exit if it means sacrificing a much larger future payout. For example, in the case of a company for which substantial growth is probable, annual profit increases of twenty percent for five years could result in a future sales price more than double a current sales price. Here are a few of the questions to consider to determine whether it is time to sell:
- Do you still have passion for the business?
- Are there steps to be implemented that can take your business to the next level?
- Do you have the ability and skills to take your business to the next level?
- Have you established a sufficient positive history of the financial metric important in your industry (sales, profits) to attract a buyer at full value?
The time to sell may be now, but consider whether you would be cutting yourself off from a much higher transaction price later.
If you have any questions about this or any other M&A issue,
please contact Glenn Solomon at firstname.lastname@example.org or 443-738-1522.
ABOUT GLENN D. SOLOMON
email@example.com | 443-738-1522
Glenn D. Solomon is a principal at Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years. He has extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing, full-service law firms in the Mid-Atlantic region. With over 180 attorneys offering a comprehensive range of services in virtually every legal category, the firm is well positioned to meet the needs of dynamic businesses and the people who own and operate them. Our twelve offices serve individual and corporate clients in the Maryland, Delaware, New Jersey, and Northern Virginia markets, as well as the Washington DC, Baltimore, Philadelphia, and New York City metropolitan areas. At Offit Kurman, we are our clients’ most trusted legal advisors, professionals who help maximize and protect business value and personal wealth. In every interaction, we consistently maintain our clients’ confidence by remaining focused on furthering their objectives and achieving their goals in an efficient manner. Trust, knowledge, confidence—in a partner, that’s perfect.
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