In a trending discussion on Linkedin.com from the Business
Succession Canada group, R. John Dolbec provides an excellent
overview on selling a business and aptly likens the process to
running a marathon (Selling Your Business is Like Running a
Marathon). He describes the long and arduous process of selling
a business from creating a team of professionals and preparing the
business for sale through to the completion of the transaction.
Like in a marathon, there are many milestones to reach and
challenges to overcome along the way, each of which requires
planning, perseverance and patience. As Mr. Dolbec states,
"The only sure thing is that selling a business is a long,
arduous, and complex process that can never be called
Key to a successful experience and outcome is choosing the right
professional team to advise the vendor. This team includes an
M&A advisor and a corporate lawyer, both of whom are critical
to the successful conclusion of any divestiture transaction.
The M&A advisor is critical to preparing the business for
sale. This includes designing an appropriate sales process,
creating the confidential information memorandum and soliciting
interest among prospective buyers. The M&A advisor also plays a
critical role throughout the transaction in the negotiations,
managing the due diligence process, managing the expectations of
the buyer and seller, ensuring that each milestone is met and
maintaining the all-important transaction momentum. In sum, the
M&A advisor's role is to maximize transaction value for the
seller and ensure that the transaction crosses the finish line.
The corporate lawyer also plays a primordial role in the sale of
a business. In an auction context, the corporate lawyer's
involvement often begins with providing input in the preparation of
the confidential information memorandum, vetting proposed changes
to the seller's form of non-disclosure agreement and preparing
a template purchase and sale agreement for review and comment by
prospective buyers. The lawyer also participates in negotiating the
letter of intent and the definitive documents (including the
purchase and sale agreement), facilitates due diligence inquiries,
works in parallel with the tax advisor to maximize after-tax sale
proceeds, seeks all necessary regulatory approvals and third-party
consents, and finally, orchestrates the closing of the transaction
(which can often feel more like a sprint to the finish line). In
sum, the role of the corporate lawyer is to participate in
negotiating and documenting the transaction documents and minimize
as much as possible transaction risk to the seller.
As Mr. Dolbec nicely sums up, "With a strong support team,
careful planning, a long-term strategy and professional guidance,
each step of the process can add value to the company and
ultimately brings you to the finish line."
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).