Last month I met with a buyer interested in acquiring one of our "Big 10 University" licensed promotional companies. The buyer is considering our business as an "add on" to the existing business he currently run as a family. In my process there needs to be an understanding as to why such acquisitions make sense for our client seller. The way this deal might be structured may make sense because both the potential buyer and the seller client are both running legacy businesses that involve close family members. You may consider this a "blending of two families" with two separate businesses. As simplistic as it may sound, it might be the most complex proposition to consider as eventual to this type of merger you have egos getting in the way.
In addition to the already complex "blend" the buyer will add a variant to the ongoing business for sale through the relocation of the acquired company. This relocation plan, in discussing with the seller, will be the biggest hindrance to making this a conducive deal. A key family member working in the business opposes the relocation. For many years the business has been in a location favorable to the key employee and if this key member will cease to be involved in the business, the business may lose one of its attractive value proposition, which is to inherit trained and skilled employees in the acquisition.
It is unfortunate that the seller did not consider such aspects of his exit from the business in advance. Exit planning does not happen overnight. It is a series of steps in evaluating the critical factors that will be considered in the future. Not everyone has a crystal ball to predict the future, but with careful planning and a timely execution, alongside of working with professionals who are equipped and credentialed in the exit planning process, similar hindrances enumerated above will be mitigated, if not avoided.
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