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Keeping Your Business Sale Confidential – Success Depends On It!

By Generational Equity


Keeping Your Business Sale Confidential – Success Depends On It!

One of the most essential challenges you will face as you consider the exit from your business is maintaining confidentiality during the process. Simply put, customers, suppliers and most importantly employees tend to get apprehensive as the rumors of a merger become public. How you handle the news of your business sale will depend on a variety of factors; however, most importantly you have to gauge how the eventual release of the information will impact all your key constituencies.

It is fascinating to me as I meet with our clients post-sale that the handling of the confidentiality of their transactions varies from literally involving key employees from the outset to not informing them until the day the buyer walks in the door after the deal closes. What this tells me is this: Each transition scenario is unique; the way you handle yours will be dependent on how comfortable you are with employees, customers, and suppliers finding out.

In some industries, competition is so intense that informing even key employees (or even spouses for that matter) can be problematic. In other situations, business owners are quite comfortable involving the entire staff from the outset, believing that the more informed folks are, the better they will handle the “fear” of the post-transaction operations.

So the decision of who to involve and inform and who not to is something that you need to carefully consider. If you hire an M&A consulting firm, your dealmaker will give you suggestions based on his/her experience about how you should proceed. If you are entering the market on your own, this is something that you need to talk to your trusted advisors about. Under either scenario, here are some basic guidelines to keep in mind:

  • Ensure that you have a well-crafted Confidentiality Agreement (CA) to have interested parties sign before disclosing information about your business.
  • Be careful to make certain your Business Profile (the 1 to 2-page “teaser” sent to prospective buyers) is generic enough to shield your business, but contains enough details to entice interest.
  • Only send your Offering Memorandum to buyers who have signed your CA.
  • Determine which employees will be working with you during the data gathering process.
  • Decide how you want to handle potential buyer visits to your facility (i.e., after hours, on weekends, or create a cover story).
  • Make sure you are comfortable with potential buyers being allowed to contact key customers during due diligence.
  • Discuss with your buyer how and when you want to announce the transaction to your employees, the industry, and your community.

This is just a short list of some of the issues revolving around confidentiality that you need to consider if you are exiting your business. There are certainly others that come into play, depending on the level of secrecy you need in your business in order to maintain your post-sale operations and the company’s longer-term continuity.

Determine What Works Best for You

Again, we have clients that disclose from the outset to their key employees that they have engaged us to help them find investors. This is usually the case when the owner is determined to stay and operate the company as a partial owner post-sale. In this scenario, it is likely that involving the employees is a great idea, as it enables them to understand that the owner is not departing, but is in fact reinvesting in the business to help it grow.

On the other hand, we also have engagements where the owner does not indicate to any employees what is going to transpire until the day the deal closes. In some cases under this scenario, the transaction is announced to the team the same day that the new owner is introduced. Although this can be quite a shock to the staff, under some scenarios this is the only way to ensure that key employees and customers do not depart during the sale process. Although under this type of process, it is often a good idea to have the buyer create employment contracts with your key folks to ensure that they are committed to staying when the deal is announced.

You can see that the issue of how you handle the confidentiality of your transaction is something that needs to be planned well in advance. Spend some time discussing your situation with your M&A advisor, or if you are looking for buyers without professional help, create a circle of trusted folks that you can have frank discussions with about how you should manage your process as it relates to confidentiality.

The success we have had over the years is driven, in large part, by the ability of our dealmakers to listen to our clients’ needs, determine what is important to them, and craft an M&A process that works for every situation.

If you would like to learn how we can do that for you, call me at 972-232-1125 or email me at and I would be glad to discuss your situation and determine how best we could help your exit planning process move forward.

By Carl Doerksen, Director of Corporate Development at Generational Equity.

© 2021 Generational Equity, LLC. All Rights Reserved.

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I wanted to take this opportunity to thank you for all that you have done for us. Not only did you take care of all the aspects of the sale but took extra care to make sure we knew what it looked like every step of the way. I will definitely recommend your company to anyone that is in a position to or looking to exit their business.
Shane and Johanna Kline, Owners of Vision Upfitters
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
The professionals at Generational Equity then helped develop a roadmap for enhancing the value of the firm and an evaluation report. This was completed by June 14, 2021. We then developed the Confidential Information Memorandum and put Taylor Studios, Inc. on the market by July.
Generational Equity’s professional staff helped me every step of the way. Their network and professionals are the only reason I sold my company this quickly. For me this is a once in a lifetime sale and I was unfamiliar with the process. I was able to lean on them with questions and concerns.
Betty L. Brennan, President, Taylor Studios
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!
Eric Erlandson, Owner, Action Fastenings, Inc.
Thanks to you, the entire GE team and especially Michael Goss for driving a great valuation, coaching me and driving the process across the finish line. Please let me know if there is anything I can do to support GE going forward.
Tom Currier, Former President & CEO, Rackmount Solutions
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.
Bryan D. Horn, Owner, Over Under Clothing
We were represented by Michael Goss with Generational. The due diligence was grueling and exhausting, but Michael propped us up and kept us motivated throughout the process. Debi and I continued to ask each other how we could possibly make it through this process without the assistance of Michael. Michael's professionalism and knowledge is absolutely amazing, and we are so blessed to have had him by our side as we made our future dreams come true.
Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.
Larry Moore, Owner, A Company Portable Restrooms
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.
Pete L.
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
After attending a conference with GE, I decided that the value they bring would be worth the expense and as soon as I started working with them, I realized that was the right decision. When we started to get LOIs, Fred Zweifel took the lead on the communication and supported negotiations throughout the process, which got tricky as we moved forward. I learned that it can be common for companies to make a great offer then work to erode that price with their discoveries, but Fred and the GE team kept that from happening.
Caroline Connelly, CEO, OptoTest
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!
JoAnn Ellis, Owner of Fondren 5 Star Kennels
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.
Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
We had the pleasure of working with Mr. Ahmad Behjati Managing Director, M&A, for Generational Equity during our acquisition of Papa's Dodge in late 2021. Generational Equity and Mr. Behjati represented and marketed Papa’s Dodge. As our primary contact, Mr. Behjati was professional in every facet of this acquisition process, conveying valuable advice most times and assisting us in every step of the process.
Rick Greene of Dobbs Equity Partners LLC
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
I decided to attend the conference and hopefully receive some guidance on how to structure an exit plan of my business. Upon arriving at the conference, I was so impressed with the presentation given by Generational Equity that I set a future appointment that week to discuss the possibility of selling my business with their Senior Managing Director David Robinson.
JoAnn Ellis, Owner of Fondren 5 Star Kennels
The most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.
Salvo Stoch, Founder and CEO of Sleeping Partners
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers