KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** How long should it take to sell my alarm company July 11, 2024 *********************** How long should it take to sell my alarm company *********************** Ken Do you have experience with how long it takes to sell an alarm company? When should I begin the process if I want to sell? Anon ********************** Response ********************** Since I have been actively brokering alarm deals I do have a pretty good idea on how long it should take to sell, which gives you some idea when you need to start the process if you have an end date in mind. My first observation comes from the legal side, representing buyers or sellers in the transaction process. It shouldn’t surprise you that the longer the transaction takes, the less likely it’s going to happen. Perhaps not a great analogy, someone looking to buy your car that’s for sale is less likely a real buyer if you’re eager to sell now and they want to buy six months for now or bother you with their “due diligence” for six months. Well it’s the same with the alarm company; it’s not stagnant, at least most aren’t because they are either growing or shrinking. On the broker side I see most deals move quickly. I believe that using K&K as broker will allow you to be exposed to the greatest number of potential buyers in the quickest time; period. The exposure you get on The Alarm Exchange is unmatched. I see it when a new listing is posted on The Alarm Exchange in the Merger and Acquisition category and the requests for information come in. When the listings on The Alarm Exchange are circulated in the Kirschenbaum daily news letter, which you are reading right now, the listing is exposed to literally thousands of potential alarm company or account buyers. Typically numerous requests for more information come in. As those of you who have inquired know my practice is to require the inquiring party looking for more information to order and purchaser a Non-Disclosure Agreement [NDA} first [the NDA is discounted 50%]. That weeds out a good number of the curious shoppers, but it also identifies the seriously interested potential buyers. I’ve found that inquires serious enough to want a NDA can be expected within a week or so. Most brokers in the industry have one or two “go to” buyers that they gravitate to, and that’s sometimes works out, but it doesn’t expose you and your business to multiple inquiries and offers which often times serves to push the selling price a lot higher. Yeah, I know it makes sense. I’ve already warned about lengthy due diligence periods in the LOI. I don’t see why it should take more than 30 days to complete due diligence; should be able to close within 30 days after that. But not only must the buyer be ready to take over the accounts, the seller needs to be ready as well. It’s not always the buyer who delays and lingers, it’s ambivalent or reluctant seller, so yes, a seller needs to be ready. Pricing your company correctly is important. Over price the company and it’s not going to sell. There can be other reasons it’s taking longer to sell your business, but over pricing shouldn’t be the reason because that’s one factor you can certainly control; you can’t necessary control your account base, your location, the contracts you use, the central station you’re in, the equipment you’ve used …. that ship sailed on those issues long before you decided to sell [something you sure as hell should be looking at now and doing the smart thing now, not regretting it later]. In most situations you should be ready to sell within four to six months of listing your company for sale on The Alarm Exchange. If you’re really not motivated to sell within that time frame then don’t list for sale because you’ll be spending your time responding to potential buyers that ultimately you’re not going to move forward with. You’ll put yourself through a lot of work and time “just to test the waters” if you’re not really serious. If you are serious, and ready, give me a call for the legal representation if you already have a buyer in mind, or broker and legal if you need to find the best deal. ************************ STANDARD FORMS Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
