Issue link: https://iconnect007.uberflip.com/i/1473479
JULY 2022 I PCB007 MAGAZINE 61 Beaulieu: What is the most important piece of advice you would give to someone selling a company? Kastner: Prepare as much as possible, get educated about the process, and assemble a good team of advisors. Beaulieu: How long does this all take? Kastner: For a seller, we usu- ally estimate between six to nine months from the time that we are engaged. It's possible to sell more quickly if a pre-emptive buyer emerges. If something happens during the process, such as the company's results drop or the economy fal- ters, it can take longer. Beaulieu: What are some of the challenges of selling a company? Kastner: e biggest issue that occurs is that the company's results start to drop. Some- times, the timing is not right in terms of the overall economy, the electronics sector, or global events. Buyers have issues that come up from time to time. Beaulieu: What is an LOI, what does it mean in the process, and what are the steps aer the LOI? Kastner: A letter of intent is a document that spells out the valuation, terms, and conditions of a deal. It is typically non-binding except for an exclusivity clause and any break-up fee. Once an LOI is signed, we move into due diligence. Beaulieu: What is due diligence? What does that encompass? Kastner: Due diligence is an intense examination of the seller's information. Buy- ers investigate all aspects of a company. It starts with accounting, but it includes legal documents, custom- ers, suppliers, employees, IT, facilities, etc. Even the most prepared sellers will learn something about the company during the due diligence process. Beaulieu: How long does it take from LOI to actual completed sale? Kastner: For prepared sellers and motivated buyers, it usually takes 45–60 days. If a seller is not very prepared, the due diligence process can be much longer. Also, if major items come up that need to be resolved, it can be much, much longer. By preparing in advance, we can help cut down the due diligence time. Also, if the buyer knows that other buyers are waiting outside the window, that can motivate them to move faster. Beaulieu: en you get a success fee on the sale. What does that consist of ? Kastner: We receive a percentage of the value of the transaction, plus a bonus if we really hit it out of the park. Beaulieu: Is the retainer taken out of the final success fees? Kastner: No, we work hard, and we earn both the retainer and the success fees. Beaulieu: Now let's talk about buy-side agree- ments. How does that work? Dan Beaulieu