JOE BASILICO

basilico @ doeren . com

Today ’ s M & A environment has made the due diligence process a complex situation to manage with deal multiples continuing to rise and business models constantly evolving .

As a result , buyers are looking beyond the seller ’ s financial

Business owners are often unexpectedly approached by a potential buyer , and with deal activity currently at its alltime high , it is something they should certainly be prepared for should the offer arise . While an unsolicited offer may seem like a great opportunity , we certainly urge you to proceed with caution and speak with a trusted business advisor before you begin a conversation , and most importantly , sign any form of agreement .

If you ’ re approached , the primary thing to consider is your overall business and personal goals and evaluating whether

data in the due diligence phase and assessing areas such as an organization ’ s information technology capabilities , cybersecurity risks , human resources , company culture , and tax and regulatory compliance to determine deal value .

From a financial perspective , sellers should be prepared to supply accurate and reliable information supporting their forecasted growth . Beyond the numbers , make sure your organization is prepared to successfully support an integrated due diligence process . Technology and cybersecurity measures are being heavily weighed right now , so have documentation ready to highlight how the company is protected both financially and

you feel this provides the opportunity to achieve them . To help gain an understanding of how these align , speak with an M & A advisor to run through an initial process , which includes identifying goals and assessing your value and options , before you get too far down the road with a buyer .

Secondly , be sure to have reliable financial information readily available , meaning your numbers reflect an adjusted Earnings Before Interest , Taxes , Depreciation , and Amortization prepared on a consistent basis . This goes a long way in making a business saleable , so it ’ s best to always be ready . Buyers typically want to see at least three years of financial data and updates regularly when in discussions .

operationally , how often these infrastructures are evaluated and associated costs . With a turbulent job market , buyers will also want to know how the seller has retained its key employees , whether roles and responsibilities are scalable , and how benefits and compensation have been managed . On the compliance side , be sure your business is properly maintaining its regulatory and tax matters .

mailhes @ doeren . com

JENNIFER MAILHES

Lastly , do not under any circumstances sign a letter of intent ( LOI ) without advice or input from qualified counsel . All too often , we see sellers sign a LOI without seeking advice , leaving little opportunity for negotiation . Although an LOI may be a non-binding agreement , it can help set the deal terms while you have the most leverage .