Who is the Buyer?: Selling Your Business
David Young is a Partner at DLA Piper (http://www.dlapiper.com/). In this video he talks about "Who is buying" when selling your business.
- Whether offer is cash or stock impacts the nature of the deal
- A public buyer is more stringently regulated than a private buyer
- Deals differ between foreign & domestic buyers
So when people ask about how in a merger in acquisition and process or sale of the company is going to go in sort of process wise. It’s often very difficult to give a general sense of that both just from specific terms of deal, but as well as just the identity of the buyer is so important.
The same transaction on paper may take twice as long and cost 3 times more with one buyer versus another buyer just depending on their process, how detailed (merging) there are, who they are, how they think, what they do.
Examples of that is just whether the buyer is offering cash or stock. It makes a huge difference on the deal and the nature of the buyer is what’s going to dictate that in particular if it’s a private company stock that’s not liquid versus public company stock that can be traded, cash is obviously cash so if you can get cash these people usually prefer that.
A public company buyer has certain SEC regulations they will need to comply with over time perhaps disclosing even publicly after it sign. Private company buyer may be a little more nimble and flexible on how they do things. The size of the company makes a big difference. U.S. buyers have a certain way of looking at the world, certain way of doing things. Buyers in other countries deals get done differently – in Europe, in Asia, elsewhere – and a lot of times that deal adapts to U.S. style of deal to a certain extent, but it’s not always obvious how that’s going to go.
And so when you’re going into looking at selling in your company sort of the more you can understand about the buyer, how they’ve done things, how they’ve done other deal, looking at other deals they’ve done, talking ideally to CEOs or people involved with other companies they have acquired, you get a really good sense of how the transaction is going to proceed because who that buyer is will make the deal very more than one might think.