June 24, 2021 //
Steps to Selling your Business Part 18.
We can’t say this too strongly – you never want word of your company’s sale to be public knowledge – this is a private affair.
Public knowledge of the sale can wreak havoc on the health of your business, attract vultures, and even interfere with getting the price you deserve at the final sale.
It’s tricky work. Our team is well-versed at navigating these waters, but it takes years of experience and instinct to do it well. We tell your story but keep it well-guarded at the same time. It’s a matter of balancing solid generalities with suitable tantalizing specifics. We want a buyer to understand why we believe they’ll be interested without giving away your identity.
Here is one method we have used in niche industries; because Stillwater belongs to a high-level international network of Mergers & Acquisitions (M&A) firms, Geneva Group International, we might release initial market outreach from another office elsewhere in the network. If we reach out to buyers from an office in Chicago, your head office in Halifax will never be anybody’s first or last guess.
Eventually, though, the right prospects will want to know more; they need to see the Sale Book. The whole story of your company is in that book. Once that lands in a buyer’s hands, your identity still needs to be protected. Enter the Non-Disclosure Agreement (NDA).
There may be some minor negotiations over the language of a line item or two. Still, in general, those buyers will sign a No Name Agreement with us: no outside mention of your company’s sale or status permitted, no mention that we are even having a conversation. The Sale Book doesn’t leave our hands until this agreement is signed.
One small step that comes next is easy to overlook or take for granted, but we want to take a moment to highlight it because it’s one of the moments in the process where you get to see what kind of people your M&A Advisors are.
Once an interested buyer indicates they are willing to execute the NDA at Stillwater, we always get our client’s approval before we release any client information. We don’t operate under a standing order that assumes your authorization to disclose to anyone willing to sign, and it’s not something we skip because we’ve had a previous general discussion on the topic.
For me, this is a simple matter of integrity. This is your company, your life’s work—we are there to optimize conditions for the best sale possible for you. We may be helping to sail the ship through some tricky waters because we know them well, but it’s not our ship. At no point in the process should you feel that you’ve lost your agency over the sale of your own company. If that’s the case, you’re with the wrong Advisors. Please talk to us.
This brings me to another point in this stage of the process where integrity matters. An NDA is essential here, but it’s far more critical to connect you with prospective buyers that you can trust. There is no punitive clause in an NDA that can truly guarantee your privacy. Information is valuable, and there are greasy people in the world who may want to leverage your story for their profit.
Trust is vital—it holds the entire sale process together. Buyers need to trust that what the seller is saying is true. Sellers need to trust that a buyer’s interest isn’t a front for ulterior motives. Both teams need to trust us as Advisors as we shepherd everyone through the transaction. Weaken trust in any of those connections, and your sale will suffer in the end.
If you are planning to divest your business, or have questions for one of our Advisors, please contact our team today.