Bass, Berry & Sims was proud to once again sponsor the Smart Business Dealmakers Conference on May 1, at Hillwood Country Club in Nashville. The annual event convened an impressive lineup of business owners, investors, and M&A professionals to explore the evolving landscape of dealmaking across the middle market.
Bass, Berry & Sims attorneys Tatjana Paterno and Howard Lamar each moderated popular panel sessions, engaging thought leaders from across the private equity, entrepreneurial, and advisory communities. Discussions focused on the unique considerations facing family-owned businesses and the strategic nuances of preparing for a successful sale.
Below we highlight combined takeaways from both panels.
Preparation Is No Longer Optional—It's Expected
Companies considering a transaction—whether a family business or private-equity-backed enterprise—must begin preparing well in advance of a potential sale. Panelists emphasized the importance of internal readiness: clean financials, robust internal controls, organized contracts (especially employment and IP), and systems capable of supporting a transition.
A formal Quality of Earnings (QoE) analysis has become standard even for smaller deals. Sellers are now expected to behave like experienced operators—engaging counsel, CPAs, and investment bankers earlier in the lifecycle. Preparation also includes assembling a team that can effectively present the business and support a rigorous diligence process.
Timing Is as Much Art as Science
While many investors operate on a three- to seven-year horizon, real-world timing is more fluid. The right moment to sell is often when internal alignment is reached among leadership—and when market and business performance intersect favorably. That said, owners must also account for the unpredictable: macroeconomic shifts, leadership turnover, or competitive threats.
Being opportunistic while staying disciplined was a shared theme. As one panelist noted, "When things are going great, selling is the last thing on your mind—when things are tough, it's all you think about. The sweet spot is somewhere in between."
Family Business Transitions Require Clarity, Governance, and Intentionality
Family-owned businesses bring unique dynamics to the M&A process—emotional ties, generational expectations, and often overlapping roles. Successful transitions begin with structural clarity. Panelists highlighted the importance of frameworks like the Harvard Four-Room Model, which defines four distinct "rooms" within a family business ecosystem:
- Owners/Shareholders Room – where capital and ownership decisions are made.
- Board of Directors Room – focused on governance, strategic oversight, and long-term planning.
- Management Room – responsible for daily operations and executing the business plan.
- The Hallway – where family members gather, including those not directly involved in the business, and where values, emotions, and family relationships live.
Understanding who is in which room—and ensuring each group is having the right conversations—helps family businesses align roles, expectations, and future direction. When these structures are in place before engaging in a sale process, families are far more likely to have a smooth and successful transaction.
Panelists also underscored the importance of engaging the next generation early. Whether heirs enter the business directly or first gain experience elsewhere, preparing them with intentionality—through education, mentorship, and "fit-to-role" planning—gives families the best chance at preserving legacy and maximizing long-term value.
Culture Fit and Shared Vision Trump Highest Price
In both family and private company contexts, culture and alignment matter. Choosing a buyer or partner should go beyond headline valuation. Sellers rolling equity into a new platform should ensure alignment around growth strategy, operational priorities, and leadership structure.
As one panelist shared, the second bite of the apple—when equity is realized again during a future exit—can often exceed the first. But only if the team and vision remain aligned.
Transparency Builds Trust With Key Employees
Communication with management during a transaction is critical, yet delicate. Bringing senior leaders "under the tent" early—when appropriate—helps sustain performance and avoid internal disruption. However, confidentiality must be balanced carefully with culture and team dynamics.
Panelists shared strategies for navigating disclosure: be clear about who will stay, what roles they will play, and how the transition will affect the broader team. Celebrate the closing with intentionality—small gestures like team lunches or site visits can go a long way in reinforcing stability and showing respect for legacy.
Understand Deal Mechanics to Shape the Outcome
Sophisticated sellers are becoming more involved in shaping deal terms, not just reacting to them. Concepts like net working capital adjustments, representation & warranty insurance (RWI), platform vs. add-on acquisitions, and equity rollovers are no longer optional to understand—they are essential.
Taking multiple buyers deeper into the process can allow sellers to dictate structure and negotiate better terms. Tax planning, meanwhile, remains critical to generational wealth and post-close outcomes—another area where early advisory involvement makes a difference.
Private Equity Is Not One-Size-Fits-All
For family businesses and private sellers alike, it is important to understand that private equity firms differ significantly in style, structure, and intent. Reference calls with portfolio company founders and management teams can offer crucial insight into a firm's actual behavior—not just their pitch.
Identifying the right partner begins with understanding what you want out of the transaction: growth capital, operational support, liquidity, or succession. With clear priorities, sellers can evaluate whether a private equity firm will truly add value or simply drive toward short-term returns.
From legacy-driven family transitions to sophisticated sell-side strategies, one theme was clear across both panels: intentionality, preparation, and cultural alignment are key to successful transactions.
Bass, Berry & Sims would like to thank our panelists: Blake Hogan – CEO at Nashville Door; Leonora Zilkha Williamson – Founder at Platinum Rule Advisors; Lee Ballew – Managing Director at Capital Alignment Partners; John Anderson – Former Partner & CEO at Resource Communications Group; Jessica Ginsberg – Managing Director at LFM Capital; Michael Johnson – Managing Director at Hyde Park Capital; and Shalin Tejani – CEO at Legacy Dental Group; as well as the broader Smart Business Dealmakers community for sharing their insights and experiences.
We look forward to continuing to support our clients as they navigate the complex, dynamic world of mergers, acquisitions, and strategic growth.