Sale of a Company

Understanding options is the first step toward planning exit or growth strategies. Designing the best options will ensure a higher probability of success. Alarian will help you develop those options. In addition, we can help you understand the process, the steps involved, and the execution plan.

Alarian has the expertise to measure value, analyze and package a company from a buyer's perspective as well as develop a marketing plan. Based on experience, we know how to position both tangible and intangible assets to show a company's true potential and to maximize its value among buyers.

Alarian will identify prospective buyers, manage communication, negotiate the Letter of Intent, and ultimately execute the transaction. Additionally, we work with you to understand the other key elements of a transaction including asset management, asset protection, estate planning, and tax mitigation.

Management Buyout (MBO) is an alternate exit strategy that has been successful for many companies. This strategy involves key management purchasing a controlling interest in the company. Criteria to consider in this process are a market analysis, your competition, a financial study of your business, and the economic feasibility of the MBO

Management Buyout

When Alarian approaches a transaction as a management buyout (MBO), it collaborates with management to structure a bid, negotiate, finance and close buyouts on the best possible terms. Alarian in collaboration with management will conduct a business valuation of the company from a buyout perspective. We will take into account the most favorable buyout financing structure.

In situations where firms are actively for sale and are soliciting bidders, we will quickly assess the company's value from the management's perspective of other competing buyers, and evaluate the company's ability to support financing in order to determine the buyout options available. We strive to provide the management team with a competitive advantage by structuring a pre-emptive offer to the shareholders that restrains an auction process.

Our goal in both scenarios is to arrange a fair and compelling bid that allows the sell-side or buy-side management to complete a sale or purchase in a time frame consistent with the fast pace of corporate transactions.

ESOP

Employee Stock Ownership Plans (ESOP) may also be an exit plan for a privately held company particularly when there are no heirs participating in the business.  ESOPs can be set up several different ways. One option is to implement the ESOP on a limited basis, where a minority block of stock will be sold and the selling shareholders will remain active and continue to run the business. This is a recapitalization and provides a liquidity event for the owners.  However, many ESOP transactions involve the sale of a large block of stock and the immediate or eventual retirement of one or more shareholders from active involvement in the business in a very tax efficient manner. Further, it can serve as a reward to key management who are capable of operating the company post closing.

In an ESOP, a trust fund is established into which cash is contributed to acquire new shares of stock from existing shareholders. The ESOP borrows the money to buy the shares, with the company making annual cash contributions to the plan to enable it to repay the “loan.”

Alarian can help you determine if an ESOP is the optimal exit strategy for you.