We are financial advisors for middle market companies. These companies are generally privately held and/or family owned. Our experience in selling this type of companies is large in number of transactions, variety of industries and firm size.
Mergium assists in selling businesses, selected assets, and business units. We have the experience and qualifications to assist you with the many decisions you will face in this type of process.
We advise our clients through each stage of the process (see graph below) from preparing your company for the process (formulating a sales strategy and performing the business valuation, and research potential buyers) through the closing of the transaction.
Do not hesitate to contact us to have more information on how we can help to sell your business.
Why shareholders sell companies?
There are a number of reasons. Some of the most common ones are the following:
Succession problems: Small and middle-market companies that are family owned face frequently the issue of not having succession plans. Thus, shareholders decide to sell.
Liquidity problem: Liquidity problems may force shareholders to look to exit or to recapitalize the company.
Capital needs for other more profitable businesses: This is the case when the business at hand becomes a non-core asset or when shareholders just want to divest to diversify their personal portfolio of investments.
Conflicts among shareholders: This might force some or all of the shareholders to look for an exit.
Acute competition: In some situations, the entrance of strong competitors in the market place might pose challenges that companies will not be able to face, because of lack of capital, strong management, among others.
Low profitability.
What is the typical process for a sale of a company?
The graph below presents the typical process for the sale of a company and the main activities in each phase, all of which Mergium will assist you with:
What are the benefits of having an advisor helping you in the selling process?
Some of the benefits are the following:
Focus: Having an advisor allows shareholders and management to focus on the administration of the company. Shareholders and management enter the process to determine strategy and take the decisions of the process.
Experience: Having advice from professionals whose day-to-day is to work on Mergers and Acquisitions facilitate the process. To have an M&A advisor with significant deal experience, knowledge of the industry, market, and economic conditions will help the seller get to a satisfactory closing.
Credibility of the process: The hiring of an advisor signals the potential buyers that the acquirer is serious about the process and is committed to closing the transaction.
Coordination of activities: Financial advisors coordinate the numerous activities of this type of process and the other advisors of the process (legal, tax, and others as necessary).
Stress: When the company is family owned and run, this type of process poses a lot of stress on the family. Thus, having a financial advisor in the process avoid partially the stress of managing it directly.
Pricing: A financial advisor helps putting together an objective valuation of the company and will be able to quantify a price range that will be useful during the negotiation process.
Negotiation: A financial advisor is very helpful during the negotiation process. It avoids the need for management / shareholders to negotiate directly with the buyer and avoid any type of stress in the relationship. Also, it helps to execute the negotiation strategy, avoiding the need to have shareholders / management direct participation in the negotiation meetings.
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