Navigating the M&A Market

Joan Crain

For entrepreneurs, a successful M&A deal starts long before the sale.


To successfully sell a business, an entrepreneur needs to have an exit strategy that is thoughtfully planned in advance, including building the right team, preparing the business for sale, assessing financial goals and ensuring the right structure for the transaction.


The entrepreneur needs to give careful consideration to an exit strategy well in advance of the sale, particularly in today’s environment of dramatic economic change. The business owner should consider these four important steps to selling:

1  Recruit a Skilled Team of Advisors

A dream team may include investment bankers, accountants and attorneys specializing in wealth-transfer strategies. If choosing long-standing advisors, be sure they are up to the deal’s complexities.

Put the Business on the Right Path

The owner needs to draft a timeline of activities and be mindful of factors that will impact the business valuation, such as an independent audit, a strong management team and a business continuity plan.

Assess How Selling the Business Will Affect Your Family

Sellers should determine how much is enough to accommodate immediate spending needs and the amount they wish to set aside for heirs and philanthropy goals. Plans to reduce taxes should also be made.

Choose the Most Appropriate Structure for the Deal

Private equity buyouts, tax-free mergers and buy-sell agreements are options to consider when selling. Examine the capital gains advantages of a stock sale versus an asset sale’s lingering liability.

“It is critical to prepare a business well in advance of the transaction to ensure the optimal terms for the owner and his or her family.”


Selling a business can be a smooth process provided you have the right plan

Get expert advice and proceed slowly

Business owners who lack the right advice and act hastily can derail transactions. Common missteps include flawed valuations and inadequate due diligence.

Request an independent audit of company finances

A thorough review of the company by a certified public accountant will verify its financial health for potential buyers.

Prepare the family for a sale

A plan for family wealth management must address issues of wealth education and stewardship to prepare children and grandchildren to handle the money.


The information provided is for illustrative/educational purposes only. All investment strategies referenced in this material come with investment risks, including loss of value and/or loss of anticipated income. Past performance does not guarantee future results. This material is not intended to constitute legal, tax, invest mentor financial advice. Effort has been made to ensure that the material presented herein is accurate at the time of publication. However, this material is not intended to be a full and exhaustive explanation of the law in any area or of all of the tax, investment or financial options available. The information discussed herein may not be applicable to or appropriate for every investor and should be used only after consultation with professionals who have reviewed your specific situation. BNY Mellon Wealth Management conducts business through various operating subsidiaries of the Bank of New York Mellon Corporation.©2016 The Bank of New York Mellon Corporation. All rights reserved.