QUESTION: IS IT BETTER TO HAVE A LAWYER OR BROKER HANDLE THE SALE OF YOUR ALARM COMPANY?
Is it better to have a lawyer handle the sale of an alarm company or a broker? I do realize that we still need a lawyer to draw up the agreement and help with the due diligence. I just thought that perhaps a broker would know more of the marketing details? But then I realized that you’re an attorney who knows the alarm industry.
Do you offer this service?
Today I present the "lawyer" response. Tomorrow I'll circulate the broker responses.
I think the question needs clarification for a proper response. I also think that when carefully considered you may find that it's not an either or decision because you may benefit by the use of a broker and you will most certainly need to engage a lawyer. Let's look at the respective roles each may play.
Brokers that specialize in the alarm industry [and you can find them on The Alarm Exchange] possess certain expertise, which include:
- Helping you value your alarm business so you can have a realistic asking price or know when to accept an offer
- Assist you in making changes that may enhance the value of your alarm business
- Find you a pool of real potential buyers
- Assist you through the due diligence process
- Acquaint you with what is common for typical sale transactions
- Assist with helping you structure the deal because there are several common variations for how deals are structured
- Assist with helping the buyer find financing
LAWYERS, AT LEAST THOSE FAMILIAR WITH THE ALARM INDUSTRY, SHOULD:
- Advise you regarding the legal issues that you face either buying or selling
- Assist you with understanding common issues that should be addressed in the sales agreement
- Help you to understand what type of transaction may be best for you and your company
- Prepare an agreement that memorializes the deal you have reached with your buyer or seller
- Prepare the closing documents that accomplish the transaction
I think there is more opportunity for a lawyer to step into the role of broker than there is the possibility for a broker to step into the shoes of the lawyer. A lawyer can act as a broker; a broker [who isn't a lawyer] can't provide the necessary legal services to accomplish a sale or purchase.
So Mike correctly recognizes that a lawyer is needed to draw up the agreement. A broker would be better suited to assist with marketing your business or finding a business for sale that's a good fit for a buyer. And yes, I am an attorney who knows the alarm industry; I also offer The Alarm Exchange where you can list your business for sale or look for businesses that are for sale. Finance companies are also listed as well as brokers. You should use a competent attorney to represent you in the sale or purchase, and you should be talking to the attorney before you shake hands on the deal. It's difficult to back track on matters you have already agreed to with the other party so it's better knowing in advance what you should be asking for and agreeing to. I am available to represent you in your transaction and other attorneys in my office have transactional experience ranging from basic rather simple deals to large complex transactional experience [that would be Dennis Stern, attorney extraordinary]. Collectively we have hundreds of transactions under our belt.
I thought it would be instructive to present other opinions on the topic so I've invited some very competent brokers to offer their opinion. Their responses will be circulated tomorrow.