Are you planning to sell your business? Contemplating a merger or acquisition? OCCF recently gathered leading expert advisors and entrepreneurs to share lessons learned and best practices when planning for the sale of a privately held business and the role charitable giving can play in the process.
In Part 1 of our three-part series, we bring you some key insights onconsiderations as you plan for and execute the business transaction.
- Contemplate company and deal structure early on to ensure tax efficiency.
- Seek legal, financial, investment banking and/or accounting advisors who have relevant experience in the industry, M&A transaction type, and deal size you are embarking on. They bring invaluable experience, resources, and value to the transaction.
- Letters of intent, although non-binding, are setting the expectations for the negotiations that are going to take place. Allow your advisors to do most of the negotiations for you. They work on your behalf.
- Ensure your purchase agreement commits the buyer to the deal. Beware of out-clauses and closing conditions to pull out of the deal.
- Consider representation and warranty insurance or appropriate limitations on indemnity in the event a breach of representation and warranties arise.
Special thanks to John Williams, Partner at Gibson, Dunn & Crutcher LLP, for these helpful tips! Please reach out to Margita Blattner, Senior Director of Philanthropic Strategy at the Orange County Community Foundation with any questions.