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The
ultimate stage of the exit process is the transaction. A transaction can be the
sale of the business to a third party, it may be a public offering, it may be a
private equity infusion of capital, it may be the execution of an ESOP or MBO,
or it may be the gifting of the property to a charity.
In
any case, there are certain common items that need to be completed. A complete
due diligence file must be prepared, along with full financials, usually
audited.
In most third-party transactions such as a sale or transfer, additional
steps need to be taken. The company has to be marketed, there is usually a
letter of intent to buy in the case of a sale, a due diligence period is
established, and finally a closing occurs or the transaction is cancelled.
Managing
this process involves several of our partners and advisors, and the management
team of the company needs to be involved as well. This is a crucial period, and
proper preparation in advance is critical to success. This is where all of the
planning and preparation pay off.
Communication
between all of the advisors, the company's management team and other key
personnel - occasionally including the buyer's side is of paramount importance
during this key phase of a business exit and is a core focus of the Redtail
team.
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