Going, Going, Gone – Key Things Buyers And Sellers Should Know

Originally published in Blakes Bulletin on Business Law, January 2007

Sources estimate that in 2006, approximately 50% of the North American companies that were sold, were sold at auction. This trend is expected to continue. The theory is that running an auction maximizes the seller’s chances of receiving the highest price for its business and the best transaction terms. Given that auctions are becoming commonplace in M&A transactions, we’ve set out below some guidelines – for both buyers and sellers – to help ensure successful auctions.

Owners or managers who are considering selling their business should ensure that the target business is perfectly primed for sale. This means eliminating or minimizing issues that may cause concern for potential buyers. In addition, sellers need to consider the most efficient and effective method of disclosing any issues – whether in the confidential