Sun Acquisitions | Chicago Business Broker and M&A Firm

Sun Acquisitions is a Chicago-based business broker and M&A firm. Our team of advisors specialize in buying, selling, and acquiring privately held companies. We can help you sell your business.

Blog Posts

Breaking Barriers: Overcoming Challenges in Marketing Your Business for Sale

Closing the Deal: Finalizing the Sale of Your Business

Navigating the M&A Landscape: How to Maximize Return On Your Privately Held Business

Choosing the Right Path: Exploring Acquisition Strategies for Small to Mid-sized Enterprises

From Vision to Reality: The Art of Successful Mergers and Acquisitions for Privately Held Businesses

How to Sell a Business Discreetly

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Are you a business owner wondering how to sell a business without anyone knowing?

There are a plethora of reasons you may wish to sell your business discreetly. As seasoned M&A experts, we understand.

We know the prevalence of unethical practices carried out by unscrupulous competitors who feign interest in the hopes of acquiring trade secrets.  We’re also aware that some employees are considered redundant and end up retrenched.  This is more than enough incentive to seek out a discreet sale.

But just how do you go about arranging a circumspect deal? Let’s find out.

The Case for Choosing a Suitable Market

The type of market you choose to take your business to does influence the level of discretion you can anticipate during the sale.

Now, what exactly is a market? Simply put, “market” refers to the different groups interested in your business or potential acquirers. There are three conventional markets and each has its pros and cons.

We’re going to take a look at these markets below.

And, for those pondering how to sell a business without staff knowing, it’s going to become quickly apparent that the first two markets fit their desire for a quiet sale.

Market A – Proprietary Deal

Potential buyer: 1

When only one acquirer is in the picture it’s very easy to keep things under wraps. It also means you only have to focus on dealing with a single entity as opposed to a handful of interested parties.

This is a dream situation for most buyers, giving them leeway to negotiate terms and conditions to their liking.

The major disadvantage to this setup is the leverage acquirers are furnished with. This can be abused to drive the cost of the business down at the same time while drawing out the sale over months in order to hopefully frustrate the seller.

Market B – The Dirty Dozen

Potential Buyers: 6 – 12

The majority of sellers do not like the idea of putting all their eggs in one basket as is the case with Market A but prefer instead to have at least a dozen natural acquirers to pit against each other.

With the help of a well-connected M&A broker, you can come up with a short list of likely buyers for your business that include your current partners and or industry rivals.

What’s neat about having a “Dirty Dozen” shortlist is that the people or businesses on the list tend to be people already in your circle. Folks who are familiar with the business. This is a pro because it means the sale can be expedited.

Great care must be exercised here if you’re going to invite competitors to the table. Remember, the more people who are aware of the sale, the harder it will be to keep the transaction secret for long.

Market C – The Fish Market

Potential Buyers: 100 – 300

It goes without saying that pushing your business before this market greatly magnifies the chances of the sale leaking to employees, vendors, and others you don’t wish to know. However, a bigger group can translate to better offers and faster closing times.

What are the downsides?

The most glaring one is the expense and time involved in trying to screen potential buyers.

The way most people work this market discreetly is by sending out an anonymous letter that gives an in-depth dive into the business. This introductory letter is devoid of all traces that can be used to identify the company. It may feature proxy phone numbers and email addresses for initial communication.

Those who express interest are then made to sign a Non-Disclosure Agreement (NDA) before more can be divulged. With the NDA signed you can then hand over the company memorandum.

Phone calls are typically arranged for those who’re really keen to keep pursuing the deal until face-to-face meetings are had. It’s around this time that offers are made, discussed, rejected, or accepted.

An attempt at closing a sale privately with a buyer from Market C is not impossible but the chances of news leaking are higher than with the first two markets.

Get Expert Help

Sun Acquisitions prides itself on providing sellers with a seasoned M&A team ready to assist, offer counsel, and advice about how to sell a business without anyone knowing.

To learn more contact us today.

Looking for more insight on selling a business? Check out these links:

Disclaimer: Any information provided in this blog is not intended to replace legal, financial, or taxation advice given by qualified professionals.

When to Sell a Business

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Do you know when it's time to sell a business?

People typically start businesses for one of four major reasons:

  • For the lifestyle
  • For the money (they hope to make when they eventually sell)
  • As a legacy and for posterity
  • To change the world

Regardless of the reason for setting out to establish a business, a fair number of people eventually wind up thinking of selling. And the question of when should you sell a business inevitably comes up.

Is there such a thing as the right time to sell a small business? Let’s dive deep to find out.

The Right Time to Sell Your Business

In order to effectively answer the question of when to sell a small business, we’re going to split our answer into two: personal reasons and business reasons.

Personal Reasons

It’s the right time to sell your business if:

  • Your health is failing and you can’t keep up with the day-to-day requirements of running the company.
  • You’re ready for retirement and can no longer envision the future of the business with you in it.
  • You’re burnout and don’t have the drive to implement new strategies and seek out innovative ways to beat the competition.
  • You’re bored, no longer excited by the work, and you want to tackle something new.
  • Your marital situation has changed and you’re being forced by legal action to divest.

Business Reasons

It’s also a prime time to sell your small business if:

  • The business has grown beyond your expectations and the growth doesn’t match up with the lifestyle you want and you can’t keep up.
  • Your industry is growing more obsolete with each passing day and there is no viable way to save it and you don’t have the energy to re-invent the business.
  • You’ve been offered a partnership or merger or acquisition opportunity.
  • You’re keen to explore new and different markets.

Great, now that you know when to sell a small business, let’s talk about timing the sale. This is key as it can affect how much you get after you’ve signed the dotted line.

How to Time the Sale of Your Business

Timing is everything when seeking to maximize business sale value.

One of the best times to cash out is when the business is at its peak. When it is doing well and is making money. When you’ve got a solid client base and can prove its profitability to prospective buyers. Your best offers will probably come when your business is in this state.

So, if your business doesn’t quite match this description, you might want to hold off selling until you can:

  • Gain more market share
  • Improve your customer base
  • Increase profits
  • Bolster reputation
  • Boost financial position

In a nutshell, wait until you get the business to a relatively healthy state.

With that said, however, it must be highlighted that this is the ideal and things don’t always go as planned. Simply because no one can predict the future.

That’s why if your exit plan is selling you must begin your preparations years in advance. If you’re truly pressed – take at least one full year to get your papers in order before you list the business. And keep a close watch on what’s happening in the industry observing trends and changes.

Times to Avoid Selling Your Business

So, is there a wrong time to sell your business?

We’ve seen how timing can affect the quality of offers you receive. Generally, you will want to avoid selling your small business:

  • During times of economic instability
  • When the economy is in distress
  • When getting access to funding is difficult
  • When your industry is about to be hit by a tax rise and,
  • When there is a decline in trade because of international politics

Knowing when you should sell a business and when not to can make all the difference in your preparation and selling experience.

Get the Help You Need

If you’re thinking of selling your business and require the services of a seasoned M&A professional, our Sun Acquisitions team is ready to sit down with you to discuss the process.

Contact us today.

Looking for more insight on selling a business? Check out these links:

Disclaimer: Any information provided in this blog is not intended to replace legal, financial, or taxation advice given by qualified professionals.

What Documents Are Needed To Sell A Business?

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We Explain What Documents Are Needed To Sell A BusinessOne of the first questions a seller often asks is, “What documents are needed to sell a business?”

It’s a great question and one that we’re more than happy to answer. We’ve split the required documents as follows:

  • A checklist of the legal documents needed to sell a business.
  • A checklist of the financial documents needed to sell a business.

It’s worth noting that you might not need all the documents presented on these checklists.

Legal Documents Needed to Sell a Business

  • A Non-Disclosure Confidentiality Agreement
  • Offer-to-Purchase Agreement
  • Current Lease Agreement
  • Enterprise Insurance Policies
  • Business’ Professional Certificates
  • Existing Vendor/Client Contracts
  • Employment Agreements
  • Letter of Intent
  • Post-Closing Agreement

Financial Documents Needed to Sell a Business

  • Personal Financial Statement (to be completed by buyers)
  • Seller’s Discretionary Earnings
  • Seller’s Discretionary Cash Flow
  • Internal Profit & Loss Statements (dating back two to three years)
  • Balance Sheet (updated/current version)
  • Corporate Tax Returns (dating back two to three years)
  • Accounts Payable Reports
  • Seller’s Promissory Note for Financing
  • UCC Financing Statements
  • Escrow Agreements

Who Drafts These Documents?

A follow-up question to “What documents are needed to sell a business?” that you might be wondering is who is responsible for drafting these documents?

Selling a business requires the seller to work with a team of experienced M&A professionals including an M&A accountant, an M&A attorney, an M&A business broker just to mention a few.

Financial documents will be overseen by the finance team and legal documents by the attorney.

The Role of These Documents in the Selling Process

The courting phase of selling a business begins with general discussions as both the buyer and seller get to know each other.

However, before more intimate matters can be discussed and sensitive company information disclosed, confidentiality agreements must be signed.

Once this is done, the seller can hand over some of the legal and financial documents mentioned on the checklists above. It’s due diligence time.

All of this can progress quite quickly therefore it’s critical to ensure that as the seller, you’ve got your papers in order. The last thing you want is to make a buyer think twice about your level of preparedness.

What Does the Due Diligence Stage Involve?

Buyer due diligence is an intense period of time that sees the buyer and their buying team meticulously comb through every piece of paper you have provided.

Every document – financials, customer records, vendor contracts, sales reports, expense reports, tax returns – will be carefully examined.

They will ask for more information on gray areas. They are verifying the claims made in the initial negotiation stages. Doubling back on financials to see if everything checks out.

Sellers should be upfront if there are things the buyer must know because a diligent buyer will expose everything that you’ve tried to hide. And no one likes unpleasant surprises.

Protecting Yourself In The Event of a No-Buy

We’d all like it if every seller found a buyer. It would be the end of a great business journey for sellers whose exit plan is a buyout or acquisition.

However, not every business on the market will find a buyer. Sometimes it’s simply bad timing – trying to sell during an economic downturn or when the business is in financial distress. Sometimes it’s a missed opportunity – you’ve got a business that few are interested in taking over.

Whatever the case, these documents, especially the A Non-Disclosure Confidentiality Agreement, must not be treated lightly.

They will help to protect you in the event of a no-buy. That’s why it’s important to know what documents are needed to sell a business,  even if you don’t end up with a deal on the table.

Do you Need Help Preparing the Documents Needed to Sell a Business?

Now that you know what documents are needed to sell a business, you might be feeling a little overwhelmed.

Our expert SunAcquisitions team is ready to offer assistance as you prepare to sell your business.

Discuss buying/selling a business with our M&A consultants, contact us today.

Looking for more insight on selling a business? Check out these links:

Disclaimer: Any information provided in this blog is not intended to replace legal, financial, or taxation advice given by qualified professionals.

Sun Acquisitions Announces the Sale of an Industrial, Commercial & Medical Lighting Distributor

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Sun Acquisitions is pleased to announce the successful acquisition of an Industrial, Commercial & Medical Lighting Distributor, based in the Greater Chicago area.

This family-owned business was founded in Chicago over 100 years ago. The provide sales and distribution of lighting products to the following industries: medical, office magnification, industrial, machinery, utility, and more. The business experiences low customer concentration, with a strong online ordering presence. They are equipped with a knowledgeable team to provide high quality customer service. The day-to-day operations are run by a management team in place to stay on with new ownership

This company presents major growth opportunities for the new ownership to continue to grow the business. These opportunities include: increase online presence and implement an online marketing strategy, expand product offerings, increasing the sales team and developing a stronger training program.

Through the confidential marketing of the business, Sun Acquisitions generated over 55 interested buyers which led to one final offer of above the asking price to purchase Lighting Specialties Co. from its previous ownership. The business was acquired by a strategic buyer, Rose Industrial Products, to add new product lines to their existing industrial product distribution operation.

Richard Port was the lead advisor and managed all aspects of this client engagement. Richard is a Senior Advisor with Sun Acquisitions with a focus on the healthcare industry. His education and 35+ years of experience uniquely position him to oversee the dental and healthcare business as part of the suite of services Sun Acquisitions offer.

After the sale of the business, Richard Port, stated, “We are exceptionally pleased that this family-owned business will be transitioning to another family-owned business and that the legacy of this company will continue to move forward.”

About Sun Acquisitions

Sun Acquisitions is a Chicago based mergers and acquisitions firm. We work with clients that are interested in the confidential sale, acquisition or valuation of privately held companies. Our professionals have significant deal experience and knowledge to thoroughly guide clients through each stage of the sale or acquisition process. Sun Acquisitions has successfully managed and handled over 400 transactions across all industries and is recognized as a leading M&A advisory firm in the Midwest.

If you are interested in buying or selling a business, contact us at [email protected] to schedule a free consultation with our team.

Sun Acquisitions Secures Six New Domestic Buy Side Engagements

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Sun Acquisitions is pleased to announce six new buy-side engagements. These campaigns will be primarily focused on domestic privately held businesses. Sun Acquisitions is currently working with a variety of clients consisting of strategics, private investors and private equity firms.

The engagements consist of a search for companies in the following industries:

  • Private investment group looking to acquire a Chicagoland food distributor or manufacturer
  • Tank general contractor looking to acquire a pump or wastewater related business in the Midwest or Southeast
  • Private investor looking to acquire a Midwest based manufacturer’s representative business
  • National property management firm looking to acquire another property management firm or association management company
  • Waste management company looking to acquire a waste broker or related supplier in select metro markets
  • Private investment group looking to acquire varied services companies including information technology companies and fire suppression services in select metro markets

Larry Sanderman, Managing Director at Sun Acquisitions, will be leading the search and managing these engagements to ensure the transactions are successfully completed on behalf of our clients. Engaging an intermediary in a buy-side search ensures that the campaign is clearly defined and generates proprietary deal flow with numerous qualified targets, through a streamlined process.

About Sun Acquisitions

Sun Acquisitions is a Chicago based mergers and acquisitions firm. We work with clients that are interested in the confidential sale, acquisition or valuation of privately held middle market companies. Our professionals have significant experience and knowledge to thoroughly guide clients through each stage of the sale or acquisition process. Sun Acquisitions has successfully managed and handled engagements across all industries and is recognized as a leading M&A advisory firm.

 

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