For many years this was a rhetorical question business people usually asked their lawyers and advisors only when they began contemplating their own retirement. In today’s more complex business environment, however, the question of when is the “right” time to sell a business may be ripe for discussion much sooner, because it now has strategic implications far more involved than a simple desire to take your chips off the table and spend more time with your family.
The emergence of the private equity market over the last decade or so has opened new opportunities for the founders of businesses – – both large and small — to achieve personal goals far sooner than at their normal retirement age. There is a vast amount of money now chasing the right investment opportunity, with private equity funds willing to pay higher multiples than ever in the history of merger and acquisition transactions.
Moreover, from the perspective of the business founder, this current environment provides strategic opportunities beyond merely cashing-in and bringing a measure of personal financial security to the founder and their family. Since most private equity transactions are structured so that the seller usually retains a significant equity interest in the business going forward, they permit the founder to continue to be involved, and participate in the creation of even greater value, with new partners capable of providing additional capital, technology and managerial skills needed to bring what had been the family business to a whole new level.
Deciding whether this is the right time to sell your business now involves far more thought and advice than a personal assessment of whether this just feels like the right time to retire. Lawyers in the firm’s Business Law and Transactions Group can provide the insight to guide the businessman in making the right decision about selling.
ABOUT STUART NEWMAN
Stuart B. Newman has been engaged in corporate and securities practice for over forty years, focusing on corporate law, private equity transactions, mergers and acquisitions and capital formation through public offerings and private placements. Stuart studies his clients’ businesses thoroughly and has made valuable contributions to a broad range of business topics such as joint ventures, product development, finance, investment banking, marketing and personnel. He has served as a director on the boards of both publicly traded and privately held companies, contributing his unique combination of business acumen and broad legal experience. For example, Stuart was selected by the secured lenders of one of the largest commercial laundries in the New York metropolitan area to serve on the Company’s Board as its sole director to guide the Company successfully through a sale of its assets during a Chapter 11 Reorganization Proceeding.