Sellers Frequently Asked Questions

How do I sell my business without anyone finding out?
What are the two most important questions sellers should ask an M&A firm before signing on?
Should I ask my accountant to find a buyer for my company?
Will my company be attractive to a public company?
How long should an M&A firm hold an exclusive listing of my company?
Will a valuation sell my business at the highest price?
Do buyers buy private companies based on EBITDA, PE or Price vs. Book Value?
What is the best way to market my company to European buyers?
How important is it for an M&A firm to be owned by a brand name public company?
How often are you not able to find a buyer for a sell-side client?
What are the most common reasons that a deal doesn’t close?
When I sell my company do I also sell the property it occupies, or would I lease the land and/or buildings to the acquirer?
What is the typical post-sale management transition arrangement?
Where will the closing take place?

---

How do I sell my business without anyone finding out?

The first contact Woodbridge Group makes with the potential market of buyers for your business is via a blind (anonymous) one-page profile of your company. Your location is described in general terms and so are the details of your company. Key financials are presented as well as a description of your products and services, along with a short list of salient growth opportunities. Your company is not identified in the one-page profile.

The next piece of information a prospective receives is delivered only after he signs a binding confidentiality agreement. At that point, the buyer receives the book (Confidential Descriptive Memorandum) along with a CD containing the promotional video. We can also send buyers an e-mail link to the video even before they receive the book. In less than two minutes, they get to meet the owner(s), key employees and are given a virtual tour of your facility. Your employees do not learn the company is for sale until you want them to. The video is made under a different company name (a separate entity owned by Woodbridge Group) and employees are told that the video is for marketing and sales purposes.

---

What are the two most important questions sellers should ask an M&A firm before signing on?

It’s critical to closely scrutinize M&A professionals before engaging them to sell your most valuable asset. The answers you receive to the following questions are particularly revealing about the quality and integrity of the firm you are considering:

A. Can you supply me with references from former clients who can tell me about your firm?

Woodbridge Group features video-references of clients right on our Website, and we will supply former client contact info to serious prospective clients.

B. Can I engage your firm to sell my company without having a valuation done first?

Yes. Woodbridge Group will give you an idea of value before we take on your project to make sure your expectations are realistic. Simply complete our strictly confidential Free Value Assessment Form and we will contact you within a few days to discuss value.

---

Should I ask my accountant to find a buyer for my company?

While your accountant is an important advisor, he or she will not be an expert in marketing companies, creating a competitive auction for your company, or negotating the most favorable terms on your behalf.

---

Will my company be attractive to a public company?

Possibly. Approximately one out of every four of our transactions are completed with public companies.

---

How long should an M&A firm hold an exclusive listing of my company?

One year maximum. In most cases, a competent mergers and acquisitions firm should be able to sell your company successfully within a year.

---

Will a valuation sell my business at the highest price?

No. You will only know that you have received the best possible offer for your company if you have multiple, simultaneous offers to choose from. Offers result from generating buyer excitement with a striking print presentation and a dynamic promotional digital video that showcase your company’s unique strengths and future promise. These marketing tools enable us to obtain the highest price for your company by creating a competitive bidding process.

---

Do buyers buy private companies based on EBITDA, PE or Price vs. Book Value?

Generally buyers determine a company’s prospects on the basis of recent results, growth opportunities, overall company quality, as well as on a multiple of EBITDA common for that industry at the time of sale. PE is not a relevant metric for valuing private companies, and book value is not an accurate reflection of a business’ worth in the marketplace.

---

What is the best way to market my company to European buyers?

Proactive marketing is the best way to attract qualified buyers anywhere in the world. We research and contact buyers directly in Europe or Asia on behalf of our sell-side clients. There is little evidence that hosting a symposium and inviting some European companies, as some M&A firms do, is an effective way to get deals done overseas – or to ensure that owners receive the highest price possible for their business.

---

How important is it for an M&A firm to be owned by a brand name public company?

What’s important is who is working on selling your company. Is it a recent business school graduate or an experienced deal maker with a track record of success?

---

How often are you not able to find a buyer for a sell-side client?

We always find buyers for our seller clients due to two major factors: 1) Our customized, broad-based marketing system produces a diverse pool of potential strategic and financial buyers for each of our clients; and 2) We do not accept engagements from clients with unrealistic value expectations.

---

What are the most common reasons that a deal doesn’t close?

The number one reason a transaction is not completed is weakening financial performance. If the financial performance of a seller is off materially from the original forecast, the business loses value. Therefore, we always emphasize to sellers how important it is to stay on top of their business and to continue to actively grow it as if they’ll continue to own it for another couple of years.

The number two reason deals fall apart is surprises popping up in due diligence. We work with both parties to ensure all relevant business issues are disclosed up-front. Surprises lead to lack of trust, and lack of trust kills deals.

---

When I sell my company do I also sell the property it occupies, or would I lease the land and/or buildings to the acquirer?

Either way is possible. You may receive offers for just the business with rental income to you, as well as offers to purchase the business along with the real estate. You can choose whichever option you prefer.

---

What is the typical post-sale management transition arrangement?

The current owner typically stays on for a period of time to ensure a smooth transition, or longer depending on the structure of the deal. The former owner’s compensation is negotiated based on the buyer’s estimate of what would they need to pay someone in the market to replace you.

---

Where will the closing take place?

This depends on the attorneys involved, however, most closings these days are done by wire transfer. Signature sheets are faxed to both parties after review by attorneys. After both sides have signed all necessary documents, the funds are wired into your bank account.