Issue link: https://iconnect007.uberflip.com/i/1473479
60 PCB007 MAGAZINE I JULY 2022 Kastner: First, we talk about the owner's goals and expec- tations. If they are looking to sell soon, we focus on the process of selling. If they are looking to get ready to sell in three to five years, we can talk more about long-term preparations. Beaulieu: I assume all your dealings are in the strictest confidence? Kastner: Yes, my business is dealing with very sensitive subjects, so confidentiality is key for me and my clients. Beaulieu: Tell me about the process. Kastner: In the beginning, I'll talk with the owner about the potential value of the com- pany and the possible terms such as cash at closing, earnouts, etc. I'll also visit the com- pany and get to know them better. Once we are signed up, we put together a professional executive summary and confidential presenta- tion. We reach out to potential buyers which are screened in advance by the client. We'll answer questions and, aer a certain period, ask for initial offers (IOIs). e top bidders get invited to Zoom calls and in-person meet- ings, then we ask for letters of intent (LOIs). We sign one LOI, then go into due diligence. Once due diligence is completed and we nego- tiate the purchase agreement and other closing documents, we close the deal. Beaulieu: Tom, let's get a little more specific about your fees. I know that you customarily charge a monthly retainer. What is that for? Kastner: With my team, we spend an incredi- ble amount of time on each deal, so we feel we should be compensated in part for our time. Usually, 90–95% of the total fee is based upon success, so the retainer is a small part of the deal. Beaulieu: at makes a lot of sense. Now let's talk about what your team pro- vides with that retainer. Kastner: It includes all the services described earlier, from developing the mate- rials to closing the deal. Beaulieu: How do you find the right buyers for the company you are sell- ing? Kastner: We reach out to as many buyers as possible. Sometimes, the most obvious buyer closes the deal. Sometimes, it's a buyer we never thought would be interested or that we had never heard of before. Buyers know that we'll be reaching out to a wide range of buyers, so there will be competition. Also, by engag- ing our firm, the seller is sending a strong sig- nal that they are serious. Beaulieu: How is the price of a company devel- oped? How do you set the price? Kastner: Before getting started, we talk with the owner about the probable valuation range of the company. We do not go to market with an asking price, however, we let buyers com- pete to set the market valuation. Beaulieu: Is it possible to sell a company that is not making any money? Kastner: Yes, but it's not easy. Typically, if a company is not making money, we'll look to represent a buyer who is looking for that type of deal. Most likely, the valuation will be related to the value of the assets. Tom Kastner