United States

Maximizing your exit value

INSIGHT ARTICLE

Are you ready to exit? Whether selling your business or going public, a successful business exit from your existing portfolio is a complex process. Preparation is key.

Readiness questions to consider include:

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Have tax attributes been valued and is the business leveraging the best transaction structure?

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Are technology platforms and infrastructure performing to standards?

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Is the business’s working capital optimized and costs contained?

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Have best practices been automated?

Optimizing the above issues will position you in a more successful exit mode. To get ready for exiting, many private equity firms are increasingly seeing the benefit of using a sell-side due diligence strategy. While due diligence has traditionally been relegated to buyers, sellers are seeing the benefits of being better prepared as they enter the sales process. The primary benefit of conducting sell-side due diligence is it facilitates a more efficient transaction and allows the seller to be equipped for conversations with buyers about the company’s financial and tax matters.

By conducting sell-side due diligence, sellers gain a better understanding of the company’s strengths and weaknesses and are able to present financial information to buyers with confidence. Conversely, without conducting sell-side due diligence, sellers often aren’t prepared for the rigors of buyer due diligence. Sellers do not naturally anticipate buyer concerns, and they aren’t prepared to answer the hard questions buyers will undoubtedly ask during the process. The information gleaned from the process gives the seller the ability to create a dialogue with the potential buyers on key points that should be highlighted and adopt a head-on approach for any conversations about potential weaknesses the company may have.

After conducting sell-side due diligence, sellers should have comfort that buyers will not uncover any surprises in the financial information that could give a buyer leverage. Through the sell-side due diligence, buyers will receive an objective view of the company’s financial information, so the best offer can be made without the risk of a broken deal. Benefits include:

  • Improves speed to closing
  • Allows the seller to understand and proactively address the potential concerns a buyer may have
  • Allows management to spend more time focused on the business during the sale process
  • Reduces the risk of the deal being renegotiated due to a buyer’s financial diligence findings

Contact us to learn more.


For additional insights on maximizing your exit value, you may be interested in the following:

Pre IPO Tax planning considerations

This webcast discusses pre-IPO tax planning considerations tp help you navigate tax issues associated with the IPO process and achieve an optimum outcome.

Business Succession Planning

Business succession planning involves competing opportunities and conflicting decisions. Read more on this complex stage of business ownership.

Succession Planning Strategies for Selling your Business

Business succession planning requires introspection and practical action. What should you consider when planning to sell your business?

Divesting an unwanted asset

Sometimes paying a tax can be a sound planning idea.

Don't let working capital kill the deal

Starting the working capital mechanism discussion at the onset of a transaction is more important than ever. Learn more here.

Enhance your business with working capital management best practices

Companies that embrace best practices and leverage technology can make the most of this fundamental business responsibility.

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Contact us by phone 800.274.3978 or
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Events / Webcasts

IN-PERSON EVENT

Health care and life sciences private equity and finance conference

  • February 21, 2018

RECORDED WEBCAST

Accounting and tax updates for private equity funds

  • January 17, 2017

RECORDED WEBCAST

Private equity and the software industry

  • December 14, 2016

RECORDED WEBCAST

M&A: What to expect in 2017

  • November 16, 2016