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It may be possible to sell a business and walk away from it the day after completion but it depends on a number of factors e.g. How involved you are in the business – and it is often not possible to do so without considerably devaluing the business and reducing the price.

As we discussed earlier it is very important to have worked out very early in the process who wants to leave and who wants to stay and the purchaser will have stated quite clearly by now who they want to remain and for how long and who they don’t. This will depend on, for example, who they have and don’t have. They may not need your Financial Director or Sales and Marketing Director for example.

More than likely the key stages after Exchange of Contracts and any initial payments will be Completion Accounts, production of the Annual Accounts, first quarter numbers and then first and subsequent earn-out targets. This is where you have agreed stage payments for the business, after the initial purchase price and completion account payments, related to the performance of the business over a number of years.

It is possible that earn-outs are avoided but it is a great comfort factor  ( and therefore of value ) to the purchaser to know that he has key management personnel around for a couple of years.

One of the advantages for the business is that it has a very clear and well thought through business plan for the next few years( It is well thought through because it should be achievable ). This is always very powerful and gives clear direction to the whole company.

Often, as far as the employees are concerned, very little has changed ( and this may be a surprise to them ! ) except for a couple of the Directors and the fact that they are part of a bigger company.

Of course there can be circumstances where the acquirer wants to make more changes to the business. There certainly have been instances where acquirers have made changes that result in disruption, change and loss of jobs and sometimes, sadly and stupidly they end up destroying the value of the company.

However the whole point of going through this process is that you find the right purchaser and the right purchaser would have enough knowledge and experience to integrate an acquired business in a way that maintains and enhances it’s value and does not demoralise or destroy in any way one of it’s key assets – it’s people !!

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This blog post is a part of a series of posts describing The Sales Process – you can access the other parts of the series from the links below:

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