RESOURCES

Team

Partnering with experienced professionals is important to help you in the acquisition process. The team should include the following:

Investment Bankers

An experienced investment banker will perform a valuation of the targeted company, help you decide on the best timing for your transaction and help you prepare an in-depth investment memorandum. Your investment banker should help in assembling the rest of the team and should have acquisition experience. While it's not critical that the investment banker is associated with a large or well-known firm, it is important that he or she has the right background. Do not be shy, get down to the details of prospective bankers backgrounds.

Ideally they should be experienced in valuing private companies, negotiating the terms of purchase agreements, various terms of financing with financing sources, and shareholder and management agreements, preparing financing memorandums for raising capital for private companies going through a change of control transaction, and orchestrating the close of buyouts on behalf of buyers.

Accountants

You will also want to have the best financial advice. Your accountant, who may know about you as well as your business finances, should be in a good position to evaluate such a transaction from a tax perspective, and should be able to advise you on other financial implications of the buying of a business.

Accountants are best used to perform an audit if one is needed, to help interpret financial statements or to provide advice in structuring the transaction to minimize tax consequences for the buyer and seller. In most cases the buyer will expect that an audit be performed as part of the due diligence process.

Attorneys

Probably the most frequently consulted advisor in the purchase or sale of a business is an attorney. Attorneys are asked to do everything from negotiating the purchase price to preparing the necessary documents. A good attorney advises and protects the client legally within the spirit of successfully concluding the transaction.

The attorney you select should be experienced in these matters, since laws change and each business sale is unique. There are also specialized issues that must be addressed as they relate to your particular needs. Such matters as price, terms, consulting agreements, employment contracts and not-compete agreements will have to be negotiated and properly documented.

The primary function of an attorney is to prepare the purchase and sale documents as discussed by the parties. These documents should include reasonable and balanced protections for both parties. Reputation and experience in similar transactions are important criteria when selecting an attorney.

Valuation Experts

Business valuation experts can independently appraise a company's value. Bear in mind that they rely on the representations of the seller. They render a conditional opinion based on the assumption that the seller's financial statements are accurate and complete. They will attempt to independently verify only certain information.