Dear Aunty B,
I am a mature woman running a mature business. I have been approached by a suitor from Australia who has expressed an interest in buying us.
What might the company want to see apart from our financials?
Welcome Aucklander– and are you aware that you are from the most entrepreneurial city on (OECD) earth?
The suitor from Australia wants to know exactly what a suitor from New Zealand would want to know. That is everything about your company. They will be looking in particular for skeletons in closets. It’s a great idea to get these things in order before the suitor comes knocking.
Here is a list of what they might ask for:
- Background checks on key executives and employees.
- Review of all company documents, including board minutes.
- An examination of all shareholder information including minority interests.
- All material agreements with external third parties.
- Any employee agreements.
- Review of all key financial information
- Inspection of all key contracts including leases, mortgages and debentures.
- Review of all compliance requirements including tax filings and liabilities.
- Review of all current and potential litigation.
- Review of all insurance and outstanding claims.
- Validation of all intellectual property ownership
- Interviews with major suppliers, customers and distributors.
- Verification of costs, expense levels and purchase commitments.
- Assessment of plant and equipment and capital expenditure items.
- Assessment of key employees.
- Review of inventory, including ageing.
To really immerse yourself in how to buy and sell a business, get a copy of Fast Forward: Acquisition Strategies for Entrepreneurs from our bloggist Tom McKaskill.
Your Aunty B.