Selling your business fast: Know the risks

There are many legitimate reasons for wanting to sell a business quickly, for example, health issues, tax considerations, and macroeconomic concerns (e.g., the fear of an economic bubble, changes in technology, etc.). The impetus to sell also becomes greater if a company has serious operational issues that would continuously reduce the company’s value, unless management sells out quickly. However, even when time is of the essence, it is important to always keep the goal of the transaction on mind. For a seller, the mergers and acquisitions (M&A) process has one overarching aim: to maximize value and to get the seller the best possible terms. If one focuses too much on speed, they risk losing sight of this primary objective.

Although the desire to quickly sell a business is understandable, haste in the M&A process carries its fair share of risks. The most direct downside to speeding up a sale is that you will probably have to sell your company at a lower price. Finding and approaching interested parties is a delicate and time-consuming procedure; by rushing through a transaction, you risk passing over more synergistic buyers. For instance, in a normal transaction, you might be courting one regional buyer for several weeks, before you discover that a second buyer across the country would actually be willing to pay you 30% more for your company because it fits within their own market expansion strategy. If you were trying to sell your company “fast,” however, you would have a far smaller chance of ever discovering this second buyer.

The other problem with a “fast” sale is that it sometimes spooks the buyers. They wonder about what’s wrong with the business when an owner wants a very quick exit. Like a lot of things in life, one needs to maintain some balance to the process.

This is where a boutique investment bank like Versailles Group comes in. Over the years, we’ve accumulated hundreds of contacts throughout multiple industries; if you need to sell your business fast, we can approach all of the appropriate contacts and prospective buyers simultaneously, ensuring that you can still get the highest valuation possible for your company via a competitive auction. Versailles Group will also ensure that your company can effectively assemble the necessary paperwork, including NDAs (Non-Disclosure Agreements) for prospective buyers, so that documentation will not hinder the speed of the selling process. As a boutique investment bank with nearly 30 years of M&A experience, our goal is to maximize value for all of our clients, regardless of how quickly the transaction needs to be performed.

Versailles Group is a Boston-based boutique investment bank. For over 28 years, Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues between US$2 million and US$250 million. Versailles Group has closed transactions in all economic environments, literally around the world. Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.

For more information, please contact

Donald Grava
617-449-3325