Thought I Was Done Vetting Out All The Details
Bob Wolter, Business Intermediary
Recently, I was working diligently with a business owner and successfully marketing his business on a national level. I thought I had done my best vetting out all the details, hairs and warts, etc. We were negotiating terms with a very qualified Private Equity Firm that was offering full price and equitable employment agreements with the principals to stay on. We thought we had a deal!
Then all of a sudden, one principal declared that the terms in his divorce agreement with his ex-wife were going to severely impact how much he would end up with in his back pocket after he settled. As a result, that principal decided with the other partners to take the business off the market until they built up the business’s value further to realize more money later.
This new development came late in the game, and I, along with the buyer, was surprised by this revelation. We spent 6 months marketing this company and entertained many interested parties only to end up where we did.
The lesson here is that when initially interviewing your client, you have to identify any and all items that could negatively impact the outcome of a potential sale. The subject of divorce terms can become delicate and emotional for all involved, but it must be addressed, the earlier the better.
Turns out between the seller, the CPA and the buyers, we may have found an equitable solution. I keep taking my Tums…