February 26, 2025 • 18 mins
Discover the essential role of data rooms in the world of mergers and acquisitions in our latest episode. As we unpack the intricacies involved in organizing, securing, and managing crucial documents, you'll learn firsthand why a well-structured data room can significantly impact the efficiency of M&A transactions.
Join us as we share vital tips and real-world examples of what a successful data room entails, how to anticipate buyer requests, and the importance of preparation for business owners considering a sale. Russell Cohen emphasizes the need for meticulous organization from the outset, suggesting that business owners should not delay in getting their documentation in order.
We delve deep into the challenges associated with document requests, discuss ways to enhance security, and even explore how the latest technology trends, including AI, may transform the data room landscape.
Whether you're a seasoned business owner or new to the M&A scenery, this episode offers invaluable insights and strategies that can pave the way for a smooth transaction process. Tune in for expert advice, engage with our community, and ready yourself for successful negotiations. Don't forget to leave a review and share your thoughts with us!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Welcome to the South Florida M&A Advisors Podcast,
your trusted M&A team.
Here's your host, Russell Cohen.
Speaker 2 (00:13):
Hello everyone and welcome back to another episode
of the South Florida M&AAdvisors Podcast.
Russell.
Always good to see you, brother.
All right, good morning.
Jeremy.
All right, good morning andwelcome.
Thank you, everybody forjoining us.
So, russell, you're now under asigned letter of intent and
(00:35):
it's time to start getting thedata room, the deal room, going.
Start there.
Number one for those that don'tknow what is a data room, a
deal room, a deal vault as theycall it, why don't you explain
that for our listeners?
Speaker 3 (00:46):
okay, no problem.
So you just went through, uh,torture, getting an loi done
after a few weeks of negotiationand you're already a little
tired and uh, you're like what'scoming next?
Right, so you get the loi doneand then you know this is the
start of the quality of earnings, or the audit you want to call
it, or the documents reviewportion of the M&A transaction.
(01:10):
So, as an M&A advisor, we haveto keep everything organized
because you're going to besending a tremendous amount of
proprietary information, privateinformation about your company,
and we need to have it securedin a vault-like setting where
(01:33):
the buyer and their team andtheir quality of earnings
attorneys will be reviewingthese documentation.
Attorneys will be reviewingthese documentation.
So there are many companies thatprovide that service, but there
are a few companies that dospecialize in the M&A space.
So you know we obviously haveservices that you know we hire,
(01:58):
like a deal vault or a data room, deal room for our needs for
the M&A transactions.
So to sum it up, basically thisis where all your business
information about your companyand we're going back many years
because they do go back manyyears they ask for things that
(02:18):
you probably wouldn't expect.
It has to go into a securedplace, secured vault.
Speaker 2 (02:24):
Okay, so essentially, if I understand correctly, it's
basically just a hub to houseall the documentation, all the
information that's pertinent forthe deal.
Correct, yeah, now is that I'dimagine this is a standard thing
in the industry.
Are there business brokers outthere that don't use this, or is
this something that is like thegold standard in the industry?
(02:45):
If you're putting a dealtogether, you are.
Speaker 3 (02:48):
You absolutely need one of these data rooms yeah, if
you're in the world of m atransactions, you have to use a
data room because the amount ofinformation that's going to be
requested, that's going to berequested, is so voluminous.
It's, it's incredible.
It's not just about accounting,it's about insurance, it could
(03:14):
be about environmental, it couldbe about your, your lease, the
benefits, legal, and you'retalking like I'm in the middle
of a M&A transaction and it's a$14 million enterprise value and
the private equity group hasover a hundred folders just from
(03:35):
them that they want to getinformation from the seller Okay
, and, like I said, it rangesfrom all different topics
employees, information onemployees and everything, and so
seller, or their spouse ortheir controller or their office
manager, if they're in the know, have a incredible job in front
(04:00):
of them to dig out thisinformation, because they will
ask for information that you'renot expecting.
So, as the M&A advisor, we haveto get it organized in a format
that works for the privateequity group and the accounting
(04:21):
team.
Speaker 2 (04:23):
How do buyers and sellers typically interact or
interface with the data room?
Is it something that's kind ofopen source for both parties?
They have the same access, aswell as all the different
members of the team.
Does everybody have their ownaccess?
How is it typically structuredand what is the access like for
the parties involved?
Speaker 3 (04:41):
Yeah, so seller will have the ability to upload their
docs and a lot of times it'sjust a whole data dump into a
folder and then the M&A advisorwill move it into the correct
folder.
So the private equity group willprovide us a list and we have
to set up the data room to matchthe list and when the
(05:04):
accounting firm gets involvedthey're going to give us it
could be.
I've seen 10, 25 page listsgoing on.
Crazy Burnout happens in theseM&A transactions because there's
so much information going onand and it's just constant
questions and we're havingdiscussed down the legal side.
(05:26):
But, um, you know.
So the the private equity groupor the uh quality of earnings
firm will provide us a list inexcel and and we have to mirror
it in the in the data roombecause so much information is
coming and they they don't wantto go on a wild goose chase and
guess where it is.
So the easier that we canmirror what they're looking for
(05:49):
and the categories and thesubcategories and ABC, you know,
the better the flow ofinformation.
It just really depends howquickly the seller can get us
that information.
Speaker 2 (06:02):
I can imagine that having a well-organized and
well-structured data room wouldhelp tremendously in the
efficiency and the speed ofgetting the deal done.
Can you speak to like?
I'm sure you've done a lot ofthese deals.
I'm sure you've seen both sidesof this right.
You've been brought into a deal.
You've probably seen a dataroom that wasn't well-organized
or dealt with that mess, versussomething that was streamlined
(06:23):
and in the situation where itwasn't set up really well,
versus the one where it wasstreamlined and really set up
yeah, obviously, yeah, I meanlisten a streamlined data room
that mirrors the accountingfirm's Excel spreadsheet.
Speaker 3 (06:44):
You know it.
Just less questions are goingto happen.
And then, obviously, if we havea deal where it's disorganized,
that's where early frustrationin the deal can happen and the
private equity group will get alittle unhappy and the
accounting firm can't, the legalfirm can't do their job and a
(07:04):
lot of times documents have togo in multiple, multiple
categories, right, just becausethey're covering in the legal
side.
When we get even deeper intothe deal and we're getting into
the disclosure schedules towardsthe end of the deal, towards
the contract, a lot of thesedocuments have to flow in
(07:25):
multiple categories in the dataroom.
So very complicated and it'sreally tough on the seller or
the spouse or the person doingit.
It's just incredible.
You can't imagine it until youactually get the list and see
(07:47):
how daunting it is and it seemslike it goes on forever.
Really, it just sounds complex,yeah.
Speaker 2 (07:54):
So are the owners basically taking all this
information and putting it inthere and then you go in and
structure it and organize it, ordo they give it to you and you
put it in there, and what do youcommonly see Like?
What typical types of mistakesdo you see most from business
owners when putting this thingtogether?
Speaker 3 (08:11):
So I have a business owner right now.
As I mentioned in my currenttransaction, he likes to put the
information in the correctcategory, so he's doing a great
job.
But, sometimes there'sduplicates that he put in the
wrong and I have to go in thereand I'll you know I will correct
it.
And then some sellers just wantto get the information in one
(08:36):
folder and then I can move it.
So yeah, it's really justdepending on the Player,
dependent Type A, you know, ifsomeone's a type A and they have
to.
You know they have to do itthemselves.
Some people are doing itthemselves and they don't want
other.
They want to control theirsituation.
So it's great to have sellerslike that.
(08:56):
That's great.
We just got to make sure thatboth parties know what is in the
files and so they're notgetting lost themselves Because
there's so many places, so manycategories.
Like I said, in this currentdeal it's like 100 different
things to fill in, and so wedon't need the seller to click
(09:22):
on 100 different categories tosee what's in there.
We need to let them know whatthey have already provided and
what they're missing.
What they have already providedand what they're missing.
And we have to provide to theprivate equity group, you know
where they understand what's ineach category, and a good data
room will probably have willhighlight that you know if
(09:46):
there's something in the dataroom, so they don't have to
guess if one's empty or not.
Speaker 2 (09:49):
Basically, so, as with anything we're taking
personal information and puttingit online and storing it in a
place, there's always securityrisks to consider.
Is that something that you dohave to take into consideration,
or are these data rooms?
They already have that kind ofbaked into the cake, right?
How can firms ensure that theirsensitive information is
(10:11):
properly protected?
Speaker 3 (10:12):
Yeah, these data rooms are really well protected.
This is what they do, andthere's something called
watermarking where if you havesensitive data they can
watermark and there's markingson the document, watermark.
You know watermark.
I'm not sure if you're familiarwith watermarking, but instead
(10:37):
of having a document that justhas information on it,
watermarking is kind of likebehind the scenes on the
document and it's better forsecurity purposes, for any
proprietary information.
But those are good features tohave in a in a data room.
But, like I said before, it isa such a daunting task that I
(11:00):
guess you really don't realizeuntil you're in it.
On on how detailed they will go.
I warn the owners that theyprobably would only want to do
this once.
Speaker 2 (11:11):
Yeah right, I can imagine, with all the
unbelievable advances coming upwith with technology, uh, with
the ai revolution coming, it'sgonna gonna be a.
I would imagine it's gonna be avery helpful thing to help
organize and sort.
I don't know how it integratewith these tools.
I'm not overly familiar withdata rooms per se, but I could
(11:32):
imagine that the power of AIwill ultimately help in the
processing and storing andanalyzing of this data.
Really incredible.
Speaker 3 (11:41):
Yeah, I'm sure AI will come into play in all
industries.
I think one of the biggestchallenges when we keep getting
these we get these very largelists from the legal team, from
the accounting team, from theprivate equity group, and
they're giving it us to an Excel.
So how do we put this largelist into the data room?
And if you don't have the rightdata room, you're manually
(12:03):
copying and pasting each one atthis point.
But there are a few data roomsthat will you can actually copy
and paste and your, your, yourlist will show up in the data
room.
Um, so that's kind of importantbecause you can spend quite a
bit of time, uh, if you have thewrong data room, manually
(12:23):
entering each you know onethrough all 105, let's say, to
100, let's say and and you'rejust copying and pasting and
creating the categories andsubcategories.
So important to find a dataroom that will have the ability
where you can copy and paste offan Excel spreadsheet all the
categories and it will actuallyappear in the data room.
(12:45):
All done within a few minutes.
That saves you a lot of time.
So that's probably the biggestquagmire for a data room and for
M&A advisor is to manuallyenter it in which is I know some
very large firms that are stilldoing it that way.
Speaker 2 (13:04):
They got to get up with the times.
My man, yeah, you got to findthe right firm to do it.
Yeah, I've said this beforemany times this transaction is
so complex.
It's so imperative to have theright team behind you.
I mean, with anything in life,it's important to have people
that specialize in the thingthat you're trying to get done,
(13:25):
but even more so with what youdo, especially for somebody
that's spent the last three orfour decades building their
business from scratch andthey're in a place where they're
going to sell now.
So important to have aknowledgeable team behind them.
Speaker 3 (13:39):
It's so important Every angle of this experience.
You got to have your team ofadvisors because once again,
you're dealing with professionalbuyers that do this for a
living.
This is your first turn into M&Atransaction and and if you have
the right advisor, the rightattorney and the right um, you
(14:03):
gotta have the right CFO orfractional CFO in the
transaction.
It will.
It will still be daunting andbe tough, but you'll have.
You'll feel very good about itat the end because you know
you've been advised properly andyou know the data room, deal
room is is the lifeline of thedeal, because you know you're
(14:25):
already, you know you now you'reexcited, you got the deal and
now you're going through the,the, the most tenuous part of
the of the process, through themost tenuous part of the process
.
So the question is you got tojust be mentally ready.
If you're not mentally readyfor and the deal goes slow, it's
not a fast moving transaction,it moves really slow.
(14:47):
So the good thing is, everydecision you make along the way
will be calculated, will beconfirmed with your advisors and
you know it's all leading tothe, to the end game, where you
see the light at the end of thetunnel and and you you know you
make life-changing generationalmoney any closing thoughts?
Speaker 2 (15:11):
maybe a piece of advice for a business owner out
there that is getting ready topotentially sell.
What would you like to leavethem with?
Speaker 3 (15:23):
If you feel you don't have a good handle on the I
guess the information that'sgoing to be necessary to provide
to a private equity group, thenit's probably not the right
time to sell.
You got to get organized andit's all great to have great
(15:44):
numbers, but you got to be ableto support it and it's not just
supporting the numbers.
You're going to get audited inevery angle of the business,
from the legal, from the lease,from the real estate to the
benefits, to insurance.
You can name another five moretopics.
(16:05):
Every stone will be unturned.
You got to have yourdocumentation.
If you're dealing with OSHA,they'll ask you for OSHA stuff.
They'll ask you when documentsthat when you incorporated 30
years ago, very tough, verytough stuff.
I mean I had sellers going tostorage storage of their old
storage facility to gather docsfrom 20, 30 years ago.
(16:26):
So yeah, it is.
It is a tough, tough processbut it's the most rewarding at
the end because the legacy ofyour business will move on.
You'll get generational wealthand, more than likely, if you
stay in the deal with theprivate equity group, there's an
opportunity for rollover equityand get more money down the
(16:49):
road.
Speaker 2 (16:51):
Yep, I would say this to business owners out there
just don't wait until you'reready to sell to get organized.
Keep that in mind as you runyour business and keep
everything organized along theway.
So when you get to the pointwhen you're ready to sell,
everything will go a lotsmoother.
Speaker 3 (17:10):
A couple of years in advance is definitely a good
time to prepare for a sale.
Speaker 2 (17:16):
All right, very, very good, russell.
Always a pleasure.
You are truly a wealth ofknowledge, my friend.
Thank you, appreciate it.
All right, guys.
Thanks everyone for tuning in.
If you're out there and you'vebeen through this process before
, if you've had anything that'sworked for you, maybe anything
(17:36):
that hasn't worked for youpertaining to this subject,
leave it in the comments belowand we'll have Russell chime in
and answer your questions.
Thanks everyone for tuning inand we will catch you all next
time on the next episode of theSouth Florida M&A Advisors
Podcast.
If you want to take care, havea great day.
Speaker 1 (17:57):
Thanks for listening to the South Florida M&A
Advisors podcast.
I want to take care.
Have a great day.
Thanks for listening to theSouth Florida M&A Advisors
podcast.
For more information, visitSouthFloridaMAcom or contact
954-646-7651.
Welcome to the South Florida M&A Advisors Podcast,
your trusted M&A team.
Here's your host, Russell Cohen.
Speaker 2 (00:13):
Hello everyone and welcome back to another episode
of the South Florida M&AAdvisors Podcast.
Russell.
Always good to see you, brother.
All right, good morning.
Jeremy.
All right, good morning andwelcome.
Thank you, everybody forjoining us.
So, russell, you're now under asigned letter of intent and
(00:35):
it's time to start getting thedata room, the deal room, going.
Start there.
Number one for those that don'tknow what is a data room, a
deal room, a deal vault as theycall it, why don't you explain
that for our listeners?
Speaker 3 (00:46):
okay, no problem.
So you just went through, uh,torture, getting an loi done
after a few weeks of negotiationand you're already a little
tired and uh, you're like what'scoming next?
Right, so you get the loi doneand then you know this is the
start of the quality of earnings, or the audit you want to call
it, or the documents reviewportion of the M&A transaction.
(01:10):
So, as an M&A advisor, we haveto keep everything organized
because you're going to besending a tremendous amount of
proprietary information, privateinformation about your company,
and we need to have it securedin a vault-like setting where
(01:33):
the buyer and their team andtheir quality of earnings
attorneys will be reviewingthese documentation.
Attorneys will be reviewingthese documentation.
So there are many companies thatprovide that service, but there
are a few companies that dospecialize in the M&A space.
So you know we obviously haveservices that you know we hire,
(01:58):
like a deal vault or a data room, deal room for our needs for
the M&A transactions.
So to sum it up, basically thisis where all your business
information about your companyand we're going back many years
because they do go back manyyears they ask for things that
(02:18):
you probably wouldn't expect.
It has to go into a securedplace, secured vault.
Speaker 2 (02:24):
Okay, so essentially, if I understand correctly, it's
basically just a hub to houseall the documentation, all the
information that's pertinent forthe deal.
Correct, yeah, now is that I'dimagine this is a standard thing
in the industry.
Are there business brokers outthere that don't use this, or is
this something that is like thegold standard in the industry?
(02:45):
If you're putting a dealtogether, you are.
Speaker 3 (02:48):
You absolutely need one of these data rooms yeah, if
you're in the world of m atransactions, you have to use a
data room because the amount ofinformation that's going to be
requested, that's going to berequested, is so voluminous.
It's, it's incredible.
It's not just about accounting,it's about insurance, it could
(03:14):
be about environmental, it couldbe about your, your lease, the
benefits, legal, and you'retalking like I'm in the middle
of a M&A transaction and it's a$14 million enterprise value and
the private equity group hasover a hundred folders just from
(03:35):
them that they want to getinformation from the seller Okay
, and, like I said, it rangesfrom all different topics
employees, information onemployees and everything, and so
seller, or their spouse ortheir controller or their office
manager, if they're in the know, have a incredible job in front
(04:00):
of them to dig out thisinformation, because they will
ask for information that you'renot expecting.
So, as the M&A advisor, we haveto get it organized in a format
that works for the privateequity group and the accounting
(04:21):
team.
Speaker 2 (04:23):
How do buyers and sellers typically interact or
interface with the data room?
Is it something that's kind ofopen source for both parties?
They have the same access, aswell as all the different
members of the team.
Does everybody have their ownaccess?
How is it typically structuredand what is the access like for
the parties involved?
Speaker 3 (04:41):
Yeah, so seller will have the ability to upload their
docs and a lot of times it'sjust a whole data dump into a
folder and then the M&A advisorwill move it into the correct
folder.
So the private equity group willprovide us a list and we have
to set up the data room to matchthe list and when the
(05:04):
accounting firm gets involvedthey're going to give us it
could be.
I've seen 10, 25 page listsgoing on.
Crazy Burnout happens in theseM&A transactions because there's
so much information going onand and it's just constant
questions and we're havingdiscussed down the legal side.
(05:26):
But, um, you know.
So the the private equity groupor the uh quality of earnings
firm will provide us a list inexcel and and we have to mirror
it in the in the data roombecause so much information is
coming and they they don't wantto go on a wild goose chase and
guess where it is.
So the easier that we canmirror what they're looking for
(05:49):
and the categories and thesubcategories and ABC, you know,
the better the flow ofinformation.
It just really depends howquickly the seller can get us
that information.
Speaker 2 (06:02):
I can imagine that having a well-organized and
well-structured data room wouldhelp tremendously in the
efficiency and the speed ofgetting the deal done.
Can you speak to like?
I'm sure you've done a lot ofthese deals.
I'm sure you've seen both sidesof this right.
You've been brought into a deal.
You've probably seen a dataroom that wasn't well-organized
or dealt with that mess, versussomething that was streamlined
(06:23):
and in the situation where itwasn't set up really well,
versus the one where it wasstreamlined and really set up
yeah, obviously, yeah, I meanlisten a streamlined data room
that mirrors the accountingfirm's Excel spreadsheet.
Speaker 3 (06:44):
You know it.
Just less questions are goingto happen.
And then, obviously, if we havea deal where it's disorganized,
that's where early frustrationin the deal can happen and the
private equity group will get alittle unhappy and the
accounting firm can't, the legalfirm can't do their job and a
(07:04):
lot of times documents have togo in multiple, multiple
categories, right, just becausethey're covering in the legal
side.
When we get even deeper intothe deal and we're getting into
the disclosure schedules towardsthe end of the deal, towards
the contract, a lot of thesedocuments have to flow in
(07:25):
multiple categories in the dataroom.
So very complicated and it'sreally tough on the seller or
the spouse or the person doingit.
It's just incredible.
You can't imagine it until youactually get the list and see
(07:47):
how daunting it is and it seemslike it goes on forever.
Really, it just sounds complex,yeah.
Speaker 2 (07:54):
So are the owners basically taking all this
information and putting it inthere and then you go in and
structure it and organize it, ordo they give it to you and you
put it in there, and what do youcommonly see Like?
What typical types of mistakesdo you see most from business
owners when putting this thingtogether?
Speaker 3 (08:11):
So I have a business owner right now.
As I mentioned in my currenttransaction, he likes to put the
information in the correctcategory, so he's doing a great
job.
But, sometimes there'sduplicates that he put in the
wrong and I have to go in thereand I'll you know I will correct
it.
And then some sellers just wantto get the information in one
(08:36):
folder and then I can move it.
So yeah, it's really justdepending on the Player,
dependent Type A, you know, ifsomeone's a type A and they have
to.
You know they have to do itthemselves.
Some people are doing itthemselves and they don't want
other.
They want to control theirsituation.
So it's great to have sellerslike that.
(08:56):
That's great.
We just got to make sure thatboth parties know what is in the
files and so they're notgetting lost themselves Because
there's so many places, so manycategories.
Like I said, in this currentdeal it's like 100 different
things to fill in, and so wedon't need the seller to click
(09:22):
on 100 different categories tosee what's in there.
We need to let them know whatthey have already provided and
what they're missing.
What they have already providedand what they're missing.
And we have to provide to theprivate equity group, you know
where they understand what's ineach category, and a good data
room will probably have willhighlight that you know if
(09:46):
there's something in the dataroom, so they don't have to
guess if one's empty or not.
Speaker 2 (09:49):
Basically, so, as with anything we're taking
personal information and puttingit online and storing it in a
place, there's always securityrisks to consider.
Is that something that you dohave to take into consideration,
or are these data rooms?
They already have that kind ofbaked into the cake, right?
How can firms ensure that theirsensitive information is
(10:11):
properly protected?
Speaker 3 (10:12):
Yeah, these data rooms are really well protected.
This is what they do, andthere's something called
watermarking where if you havesensitive data they can
watermark and there's markingson the document, watermark.
You know watermark.
I'm not sure if you're familiarwith watermarking, but instead
(10:37):
of having a document that justhas information on it,
watermarking is kind of likebehind the scenes on the
document and it's better forsecurity purposes, for any
proprietary information.
But those are good features tohave in a in a data room.
But, like I said before, it isa such a daunting task that I
(11:00):
guess you really don't realizeuntil you're in it.
On on how detailed they will go.
I warn the owners that theyprobably would only want to do
this once.
Speaker 2 (11:11):
Yeah right, I can imagine, with all the
unbelievable advances coming upwith with technology, uh, with
the ai revolution coming, it'sgonna gonna be a.
I would imagine it's gonna be avery helpful thing to help
organize and sort.
I don't know how it integratewith these tools.
I'm not overly familiar withdata rooms per se, but I could
(11:32):
imagine that the power of AIwill ultimately help in the
processing and storing andanalyzing of this data.
Really incredible.
Speaker 3 (11:41):
Yeah, I'm sure AI will come into play in all
industries.
I think one of the biggestchallenges when we keep getting
these we get these very largelists from the legal team, from
the accounting team, from theprivate equity group, and
they're giving it us to an Excel.
So how do we put this largelist into the data room?
And if you don't have the rightdata room, you're manually
(12:03):
copying and pasting each one atthis point.
But there are a few data roomsthat will you can actually copy
and paste and your, your, yourlist will show up in the data
room.
Um, so that's kind of importantbecause you can spend quite a
bit of time, uh, if you have thewrong data room, manually
(12:23):
entering each you know onethrough all 105, let's say, to
100, let's say and and you'rejust copying and pasting and
creating the categories andsubcategories.
So important to find a dataroom that will have the ability
where you can copy and paste offan Excel spreadsheet all the
categories and it will actuallyappear in the data room.
(12:45):
All done within a few minutes.
That saves you a lot of time.
So that's probably the biggestquagmire for a data room and for
M&A advisor is to manuallyenter it in which is I know some
very large firms that are stilldoing it that way.
Speaker 2 (13:04):
They got to get up with the times.
My man, yeah, you got to findthe right firm to do it.
Yeah, I've said this beforemany times this transaction is
so complex.
It's so imperative to have theright team behind you.
I mean, with anything in life,it's important to have people
that specialize in the thingthat you're trying to get done,
(13:25):
but even more so with what youdo, especially for somebody
that's spent the last three orfour decades building their
business from scratch andthey're in a place where they're
going to sell now.
So important to have aknowledgeable team behind them.
Speaker 3 (13:39):
It's so important Every angle of this experience.
You got to have your team ofadvisors because once again,
you're dealing with professionalbuyers that do this for a
living.
This is your first turn into M&Atransaction and and if you have
the right advisor, the rightattorney and the right um, you
(14:03):
gotta have the right CFO orfractional CFO in the
transaction.
It will.
It will still be daunting andbe tough, but you'll have.
You'll feel very good about itat the end because you know
you've been advised properly andyou know the data room, deal
room is is the lifeline of thedeal, because you know you're
(14:25):
already, you know you now you'reexcited, you got the deal and
now you're going through the,the, the most tenuous part of
the of the process, through themost tenuous part of the process
.
So the question is you got tojust be mentally ready.
If you're not mentally readyfor and the deal goes slow, it's
not a fast moving transaction,it moves really slow.
(14:47):
So the good thing is, everydecision you make along the way
will be calculated, will beconfirmed with your advisors and
you know it's all leading tothe, to the end game, where you
see the light at the end of thetunnel and and you you know you
make life-changing generationalmoney any closing thoughts?
Speaker 2 (15:11):
maybe a piece of advice for a business owner out
there that is getting ready topotentially sell.
What would you like to leavethem with?
Speaker 3 (15:23):
If you feel you don't have a good handle on the I
guess the information that'sgoing to be necessary to provide
to a private equity group, thenit's probably not the right
time to sell.
You got to get organized andit's all great to have great
(15:44):
numbers, but you got to be ableto support it and it's not just
supporting the numbers.
You're going to get audited inevery angle of the business,
from the legal, from the lease,from the real estate to the
benefits, to insurance.
You can name another five moretopics.
(16:05):
Every stone will be unturned.
You got to have yourdocumentation.
If you're dealing with OSHA,they'll ask you for OSHA stuff.
They'll ask you when documentsthat when you incorporated 30
years ago, very tough, verytough stuff.
I mean I had sellers going tostorage storage of their old
storage facility to gather docsfrom 20, 30 years ago.
(16:26):
So yeah, it is.
It is a tough, tough processbut it's the most rewarding at
the end because the legacy ofyour business will move on.
You'll get generational wealthand, more than likely, if you
stay in the deal with theprivate equity group, there's an
opportunity for rollover equityand get more money down the
(16:49):
road.
Speaker 2 (16:51):
Yep, I would say this to business owners out there
just don't wait until you'reready to sell to get organized.
Keep that in mind as you runyour business and keep
everything organized along theway.
So when you get to the pointwhen you're ready to sell,
everything will go a lotsmoother.
Speaker 3 (17:10):
A couple of years in advance is definitely a good
time to prepare for a sale.
Speaker 2 (17:16):
All right, very, very good, russell.
Always a pleasure.
You are truly a wealth ofknowledge, my friend.
Thank you, appreciate it.
All right, guys.
Thanks everyone for tuning in.
If you're out there and you'vebeen through this process before
, if you've had anything that'sworked for you, maybe anything
(17:36):
that hasn't worked for youpertaining to this subject,
leave it in the comments belowand we'll have Russell chime in
and answer your questions.
Thanks everyone for tuning inand we will catch you all next
time on the next episode of theSouth Florida M&A Advisors
Podcast.
If you want to take care, havea great day.
Speaker 1 (17:57):
Thanks for listening to the South Florida M&A
Advisors podcast.
I want to take care.
Have a great day.
Thanks for listening to theSouth Florida M&A Advisors
podcast.
For more information, visitSouthFloridaMAcom or contact
954-646-7651.
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