Parties when selling a business
At its simplest, the principal parties in an acquisition are the business seller and the (potential) buyer. Of course, others are highly-likely to be involved, including lending bank, financial advisor(s) and lawyers.
The seller’s and buyer’s interests are typically opposed (as outlined below), although they are ultimately aligned to achieve a successful business sale, which is why the buyer and the seller are frequently willing to negotiate:
The seller
The ideal business sale would be:
An attractive selling price, at the upper limit of what could be achievable
The selling price is paid by the buyer in its entirety at closing and a participation in the financing is not required (e.g., vendor loan)
Limited guarantees are given to the buyer
The future of the business and its employees are secured through a credible buyer
The buyer
The ideal business acquisition would be:
An attractive purchase price, at the lower end of the price expectations bracket, or part of the purchase price is linked to achieving certain conditions (e.g., a certain level of sales)
The seller can provide certain guarantees (e.g. truthfulness of representations on threatened or ongoing customer or legal disputes, truthfulness of representations on machinery and equipment)
The seller is willing to agree to instalment payments or provide a vendor loan (e.g., due to a shortage of funds)
The seller is willing to support you during a transitional phase, potentially including introductions to major customers
Ideally, the financing should be as affordable as possible
Trident Park, No. 1, Level 1,Mdina Road, Zone 2, Central Business District,Birkirkara CBD 2010, Malta
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