Business Brokerage

Before we take a business to market, we spend a lot of time understanding and analyzing the business. Our industry focus with homecare agencies is a big plus because we’ve learned what to ask sellers before we ever talk to the buyers.

Our initial due diligence will cover all the items included in the Buyer’s Checklist. After we complete our due diligence, we will provide the Seller with our opinion of value to Buyers based on 3rd party valuations. If the Seller approves our recommendations we will then prepare the virtual due diligence room, Confidential Business Review (CBR aka Offering Memorandum), and advertisements. Once that is all completed, we start the sales process.

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Interested Buyers will indicate interest from our Buyer database and 3rd party business listings. 

  1. After the Buyer signs an NDA, we will schedule a Screening Call

  2. The Screening Call determines if there is potentially a good fit between the Buyer and the Seller. It also helps protect confidentiality.

  3. Once we confirm a Buyer is potentially a good fit, we will schedule the CBR call to review the business.  The CBR contains everything a Buyer needs to know to determine if they want to pursue an acquisition or not. 

  4. Non-Binding Letter-of-Intents (LOIs). Buyers who want to be considered are sent an LOI template that has been created for this specific business opportunity.  Businesses that generate significant interest will generally have a 30-day time period where we accept and evaluate LOIs. In other cases, that timeframe may be extended up to 90-days or more.

  5. After an LOI has been submitted we will ask for the Buyer and Seller to meet for about an hour.  Usually, this is done by Zoom or Phone.  In some cases, it could be in person. 

  6. Franchisor Introduction (if applicable). Unless any red flags are uncovered during the Buyer / Owner Introduction call, we will introduce the Buyer to the Franchisor’s Business Development person.

  7. After the 30-day period, we will meet with the Seller to review the LOIs to determine which Buyer should be selected for the next phase in the sales process. 

  8. Once the Buyer has been selected by the Seller, the Due Diligence phase begins.  The LOI template typically has a 4-week exclusivity period included before the Earnest Deposit is due.  The Earnest Deposit is usually 1% of the purchase price. 

  9. Final Acquisition Steps.  Assuming Due Diligence checks out for the Buyer, they will pay the Earnest Money and begin work on closing the transaction. These steps will include:

    1. Loan approval by the Bank’s underwriting department and then the SBA.

    2. Complete the franchisor approval process for the new owner if this hasn’t already happened - assuming this is a franchise.

    3. Begin the process of getting the state license to operate the homecare agency under a new legal entity.

    4. Finalize the legal documents for the transaction - the APA and all supporting legal documents.

  10.  Pre-transition Preparation. When the Buyer and Seller are confident the transaction will be consummated, they need to prepare for the transition before the actual closing date.  Transition preparation work will include:

    1. List of all vendors that need to be set up for the new legal entity.  Payroll and Insurance are the most important ones to sort through first

    2. Bill of Sales prepared.  If there are liabilities associated with tangible assets, they must be paid off before or at closing.  Ideally, the liabilities are paid off way ahead of the closing date.

    3. Franchisor’s Standards of Review is completed.  This ensures the Buyer is getting a franchise that’s in good order.

    4. If the Seller allows this, the Buyer may meet with one or more key employees before the close date.

    5. The Buyer and Seller will collaborate on key communication messages for employees, clients, and the community. This should be written down and include the Why? What? When? Vision for the Future?

  11. The Closing Date. There has been so much work done up to this point.  You would expect the actual closing date to be a big deal, but it’s not.  It is filled with a day where both the Buyer and Seller are simply signing off on all the legal forms necessary to complete the transaction.  The exciting event comes afterward. The day the Buyer becomes the new owner and begins leading their new team.

Transaction Documents

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There are two key documents for the transaction. The first one is the Non-Binding Letter of Intent (LOI) and the second is the Asset Purchase Agreement (APA). 

Non-Binding LOI — The purpose of the Non-Binding LOI is to outline the deal structure (Asset Purchase, Down Payment, Seller Financing is applicable, and SBA Loan) and general terms that will be included in the APA. The document is non-binding, meaning either party can walk away from the purchase.

APA — The APA will reflect the general terms agreed to in the LOI and include all the necessary exhibit schedules required for closing.  It’s advisable to have attorneys represent both sides of the transaction.  The Buyer’s attorney will prepare the draft APA that will be reviewed by the Seller and their attorney.

Don’t Let the Attorneys Get in the Way

When it comes time to close the deal, it’s crucial for Buyers to retain an attorney who has lots of experience with SBA acquisitions. The good ones understand middle ground terms. In our experience, most disagreements can be ironed out with a candid conversation between the buyer and seller.  Multiple iterations of redlines can get expensive for both parties, so we recommend conference calls to iron out the issues with the Buyer and Seller present on the calls.