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SELLING ACCOUNTS- WHO YOU GOING TO CALL? BROKER-LAWYER-CENTRAL STATION? FROM ARTICLE ON OCTOBER 20, 2016
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Ken,
    Another Broker response 
    I agree with Victor Harding's response.  We (Davis Mergers and Acquisitions Group) have been brokering in our industry for 17 years now and have been on other sides of this industry for the better part of 40 years.  It just doesn't make sense for anyone to represent both buyer and seller unless they both request it.  We made a decision many years ago to represent sellers only.  In that way, our clients absolutely know we are working towards getting them the best possible transaction from the many buyers who are interested in purchasing them.  There's a tremendous amount of negotiating that takes place not just in zeroing in on the best potential buyer but then once that's completed, making sure the deal itself is a win win proposition.  If we were not there to negotiate all the fine points of the business portion of the deal and the attorney was not there to make sure our client was covered legally, most likely, the buyer will end up with the win and the seller will not.  The seller wants the best team possible going to bat for them.
    Remember, this is a onetime sale for the seller.  It's a life changing event.  Most buyers have bought many companies so they know what and how to negotiate.  They have their team assembled and they're seasoned.  The seller needs their seasoned team (Broker and Attorney) to even the playing field.  For those alarm dealers who do not have the book Ron Davis, our Managing Partner, has written on this exact subject entitled "The Start of the Deal", you're lacking the best resource possible.  It not only discusses all the tools necessary in the areas of Mergers and Acquisitions but also spells out a roadmap explaining what an owner needs to do so that when the time comes to cash in and retire or do whatever his/her heart desires, the company is worth maximum dollars.  Contact us for a free copy of the book at: rdavis@graybeardsrus.com. (owners or executive management only, please.)  Your comments after reading the book will be greatly appreciated.
    And Ken, thanks for this forum so we can speak our piece.
Steve Rubin
Davis Mergers and Acquisitions Group, Inc.
847 550 1557  Office
www.graybeardsrus.com
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SHOULD YOU CALL YOUR CENTRAL STATION?
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Ken, 
    In regards to dealers selling their accounts, I think a good first call to make is not to a broker, but to their central station. At UCC, we have helped many of our dealers sell their accounts to a variety of account buyers that we have in our portfolio of dealers. While it may appear as self-serving by the central station (and I don’t deny it), it is actually of great benefit to the dealer.  Our staff has so much experience in buying and selling of accounts, we can give expert consultation to the dealer, much like a broker, but without the fees.  But even more important is that leaving the accounts at the same central station can have a big impact on the NET proceeds to the dealer.   
    Let’s assume a broker is able to get one of my dealers a multiple higher than I can through my dealer base, but it requires the accounts to move to “Brand X” central station.  Let’s further assume that 5% of the dealer’s customers leave (a real world number in my experience) as a result of the account transition.  In this case, if the dealer had a 10% hold back (standard in the industry), then there goes 5% of the proceeds right out the door.  I have personally witnessed this more times than I can say. So, in this case, so much for getting one multiple higher: this dealer would actually lose more on the back end than what was gained on the front end.
    But the proof is in the pudding as they say and I have a bevy of alarm dealers that have done deals with our buyers and they are very satisfied.  So…I encourage any dealer looking to sell their accounts to at least check with their central station and see if they can help.  It may just be the best call you’ll ever make!
Mark Matlock
SVP – United Central Control (UCC)
San Antonio, TX
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RESPONSE
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    Both Steve and Mark make good points.  Calling your central station for leads on an interested buyer is a good idea, particularly if you are a small to mid sized company and interested in selling to a similar size company. I have often suggested to client -sellers that they call their central station for a possible buyer.  Using the same central station certainly makes the transition easier and may encourage the buyer to pay more,  or you to accept less, because the accounts don't have to be moved.
    Problem with limiting your advice to the central station is that the central station is not in the business of brokering sales.  You won't be sure you're getting the best price.  Additionally you will definitely need guidance to make and consummate the deal and that's where a broker [making the deal] and consummating [contract and closing, for which you need a lawyer] come in.   
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