The buyout of a business saves time compared to the creation of a business. Indeed, the employees have already been recruited and trained, the production equipment in place, an already existing structure and a well-established process. Moreover, the clientele already exists. The buyer can therefore hope get paid faster only if he opted for the creation of a company.
By seeking a company to take over, entrepreneurs avoid having to go through the first years of setting up the business, which are often the most complex.
These advantages offered by business takeover explain that the price of a recovery is higher than that of a creation.
How to find a company to take over?
However, taking over a business is no guarantee of a sustainable business. You have to find the right company. For this, several criteria must be taken into account such as:
- the profile of the buyer (skills, experience, etc.);
- the budget allocated to the project;
- the sector of activity sought;
- the geographic area delimited for the research;
- the size of the business;
- the type of business;
- the company’s financial situation.
To find a company to take over, you can consult the website of the Chamber of Commerce and Industry of your department, specialized ad sites or the BPI France transmission market. Prospecting is also a good way to find the business that meets your expectations.
How to take over a business?
Once you have identified an interesting company to take over, it is necessary to proceed to a pre-diagnosis before deciding whether to go further or not. It is then a question of gathering as much information as possible about the company and its manager.
If this analysis phase convinces you, you can write a letter of intent and meet with the manager.
The next step is to perform an acquisition audit. The objective is then to promote the company. You can be accompanied by a professional for this strategic phase.
Once all the elements are in hand, you are in a position to put together the recovery plan. This document is essential to convince investors of the viability of your project. The recovery plan must include in particular:
- The presentation of the buyer so that his profile as a future manager is validated.
- The objectives targeted in the short, medium and long term. This implies having a real vision for the company to develop it. This part can take the form of a business plan.
- The activity and environment of the company you want to take over. A market study can then be interesting to support the remarks.
- The provisional balance sheet presenting the investment needs and the expected benefits.
In parallel with the development of the takeover plan, negotiations are being carried out in particular concerning the acquisition price of the company. If the seller and the buyer manage to agree on all the conditions for the takeover, a memorandum of understanding is signed. The takeover can then be carried out by the sale of the company shares (or shares) in their entirety or by the sale of the business.
Finally, the final sale can be formalized. Generally, a transition phase is planned for the transfer of power between the old and the new leader.
What are the elements to take into account for the takeover of a company in compulsory liquidation?
As part of a business takeover project, you can direct your research to a company in bankruptcy.
Indeed, the takeover of a company in judicial liquidation may have certain advantages for the buyer, such as:
- the acquisition price which is often lower;
- access to specific aid for the takeover of a company in difficulty;
- the reduction of liabilities which are cleared or erased as a result of the insolvency procedure;
- the possibility of easily restructuring the company (human resources and financial situation).
In addition, the buyer benefits from the advantages of a classic takeover such as the existence of a clientele.
However, taking over a company in insolvency proceedings implies, for the buyer of restore healthy business relationships especially with suppliers who have had to deal with unpaid debts. For their part, investors may be less inclined to support the project.
In addition, to find a company to take over in the context of judicial liquidation proceedings, the buyer must be reactive, because several buyers can be put in competition. In this case, the court accepts the project which appears to be the most viable and that maintains the most jobs.
Finding a company to take over therefore requires patience and good analytical skills. In practice, it is not uncommon for a buyer to carry out more than twenty pre-diagnoses before finding the company to take over which corresponds to him. In addition, it takes several months between the letter of intent and the final sale.
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