One of the great things about being a corporate banker is that you have an opportunity to work closely with a wide range of clients and bring them great ideas that they can use to enhance their business and reach their goals.
Some of the most important decisions that corporate clients face are related to possible mergers and acquisitions. For this reason, we engage Citizens’ team of experienced M&A advisers at Western Reserve Partners early in the process when clients are weighing such a decision.
We recently worked with a longtime client whose family had built a large, privately held business from scratch. Like a lot of business owners from the Baby Boom generation, our client was looking to retire and asked us to provide some options. In some cases, there is a family member or partner to take over the business, but not in this situation. In this case, we successfully matched our client with a private-equity investor whose other holdings created a strong combined company that aligned with our client’s values and valuation expectations.
The client was pleased and all parties walked away happy with the transaction.
More and more Baby Boom generation business owners are reaching an age when they would like to step back and spend more time enjoying the fruits of their life’s work — and fortunately the timing for them is very good.
In fact, the consensus among financial experts is that there may never be a better time for them to sell their business.
The new federal tax law is freeing up trillions of dollars that were tied up overseas or used to pay higher rates. The continued strength of the U.S. economy and a business-friendly climate in Washington, D.C. make it the perfect time to consider making a deal.
But a sale is always a big decision with major implications for all stakeholders from owners to employees to customers. Maximizing the value of a client’s business is always important, but there are other factors to take into consideration as well.
That’s why an experienced M&A adviser can make all the difference.
Many potential sellers are getting frequent solicitations from private-equity firms and other prospective buyers and, without an adviser, they risk committing to a process that won’t ensure they get the best price for their company.
A sell-side adviser can analyze all aspects of the business in order to provide the most informed representation possible.
It’s very important to come up with an appropriate transaction strategy, whether embarking on a targeted process or a broad auction.
Selecting the appropriate buyers and negotiating the full list of transaction parameters are the next steps.
A great M&A adviser should complement the efforts of a client’s lawyers, accountants, consultants and other advisers in the preparation of a definitive purchase agreement and other pertinent closing documentation. After all, a successful closing is all about paying attention to the details.
In the end, there are often complex valuation considerations, confidentiality concerns and other corporate governance matters to iron out and an experienced M&A adviser can add tremendous value.
At the end of the day, we want everyone to be satisfied with the process. We want our clients to get the best value for their business and also to be satisfied with the outcomes for all of their stakeholders.
In business, as in life, experience counts and when our clients are trying to make the most of their life’s work, it makes sense to consult with experts who have seen it all before.
To learn more from the expert M&A advisers at Western Reserve Partners, please listen to their insights on key M&A topics here.
Rick Hampson is the Michigan president of Citizens Bank. The managing directors at Western Reserve Partners, a division of Citizens Capital Markets, average nearly 30 years of experience and have collectively executed more than 600 transactions during their careers.