Terranova Buying Process
What to Anticipate When Acquiring a Business in the Mid Atlantic
Whether prospective buyers seek to secure a business for income, expand their existing enterprise through acquisition, or realize a lifelong dream of financial independence, the process of buying a business in the Mid Atlantic can evoke a mix of excitement and overwhelm.
This duality prompts many buyers in the Mid Atlantic to enlist the services of an M&A advisor or business broker in Los Angeles, aiming to navigate the complexities and achieve their desired outcomes. A reputable firm can identify businesses for sale that align with your specific criteria and guide you through the entire process, ensuring a streamlined experience and a fair, successful outcome for all parties involved.
Terranova suggests that prospective buyers formally register with us to ensure they remain in our awareness. This way, we can promptly contact you when we encounter a potential opportunity that aligns with your specified criteria.
The following is a brief high-level overview of the buying process.
ACCEPTANCE:
The seller accepts your offer or submits a counteroffer. Upon agreement on all terms and conditions, the offer becomes a binding Purchase and Sale Agreement, contingent on a successful inspection.
BACKGROUND INFORMATION:
Buyers are required to provide limited information about themselves and their qualifications to purchase a specific business. A buyer profile, along with the Confidentiality Agreement, is necessary before disclosing confidential information for any business listings.
BULK SALE ESCROW:
In compliance with local laws, especially in states like California, an escrow company specializing in bulk sale transfers is recommended for businesses with less than $10 million in gross sales.
CLOSING AND TRANSFER:
Upon satisfying all conditions, the sale is declared unconditional. Terranova Business Group finalizes details for the closing, assisting in a transition plan to minimize disruption for employees and customers.
COMMITMENT:
You commit to purchasing a business at a price and terms aligned with the local marketplace, focusing on opportunities that suit your needs and capabilities as a business owner. Terranova Business Group specializes in businesses with annual sales between $2 million and $100 million.
DISCLOSURE:
Upon engaging, you sign a confidentiality agreement, pledging not to disclose confidential information about specific businesses discussed. Confidentiality Agreements are tailored to individual businesses and must reference the specific business to be valid.
DUE DILIGENCE:
You meet with the seller to examine financial records, and any concerns are addressed. Terranova Business Group assists with due diligence, utilizing an online secure data room for a smooth and secure process.
INTRODUCTION:
We introduce you to businesses of interest, discussing essential factors such as the business’s duration of operation and the seller’s reason for selling.
LEASE ASSIGNMENT:
If a landlord is involved, Terranova Business Group works on lease assignment or securing a new lease.
MEETING:
A meeting may be arranged between you and the seller, allowing you to inquire about the business’s operations and present your qualifications. Terranova Business Group representatives attend on your behalf.
OFFER TO PURCHASE:
An offer or Letter of Intent is created by either your attorney or Terranova Business Group, outlining terms and conditions. Most offers are contingent upon due diligence to verify accuracy. The offer is non-binding until contingencies are removed.
PRESENT OFFER:
Your offer is presented to the seller, with Terranova Business Group facilitating an attractive offer that meets your unique requirements. Collaboration with your legal, tax, and other key advisors ensures a tax-advantageous and risk-minimized deal.
REVIEW:
Together, we discuss and review various business types to identify those that align with your preferences. If inquiring about a specific business, you receive a comprehensive 20 to 60-page Confidential Information Memorandum detailing the business and its value attributes.
REVIEW FINANCIAL STATEMENTS:
Financial records are provided, including income statements and balance sheets from the last three years, offering a detailed view of the business’s revenue and expenses.