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Comments on this is standard in buy-sell agreement / ISC – last minute scheduling

July 19,  2021
ISC – last minute scheduling
          I’m writing this a week before ISC so not sure, but we may still have openings at our Round Tables and there may even be time for a private meeting [limited at this point to Concierge Clients].  If you want to check for openings call Stacy Spector,Esq at 516 987 8428.

ISC round tables - call to attend and participate
           Meet with experts.  Check for openings at the Round Tables.  Don't miss out on these free educational participation meetings.  Contact Stacy Spector,Esq at 516 987 8428 or for availability to participate

Confirmed round tables:
Monday July 19 from 2-3pm Ron Davis - discussion on selling and listing with broker
Tuesday July 20 from 11 am to 12pm Troy Iverson, Avantguard.  Central station issues and what's new at Avantguard
Tuesday July 20 from 2-3pm  Mitch Reitman.  Selling, taxes and structuring issues
Tuesday July 20 from 4-5PM Morgan Hertel, Rapid Response.  What's new at Rapid and exciting in central station operations
Wednesday July 21 from 10 -11am.  Shawn Iverson, The Insurance Center.  E&O coverage and insurance issues for alarm industry
Wednesday  July 21 from 2-3pm  Ken Kirschenbaum.  Contracts and how to respond to contract challenges
Wednesday July 21 from 4-5 pm  Ken KirschenbaumBuy - sell considerations from legal perspective.  How to plan for it and what to expect
Comments on this is standard in buy-sell agreement from article on July 13, 2021
          Love your comments on “industry standard”!!  One could pay 200x RMR with a 25 year account guarantee provision, and the right rep & warranties…LOL!!
          Responding to your July 13, 2021 post about transactions and people commenting that “this is the way that it is done.” 
           While I hear that very often from people who have been involved in only a handful of transactions, and have only one idea of “how it is done,” there are some pros that do know what is and isn’t normal for an alarm company transaction.  I agree that there are a few experienced attorneys and brokers out there, and some are fairly innovative, Sellers should think twice before taking advice from people who have only been involved in a handful of transactions, or “business brokers” who aren’t familiar with our industry.
          The biggest mistake that Buyers and Sellers make is starting into the transaction without any professional representation.  It isn’t uncommon for a Seller to tell a few people that they are thinking about selling and find that the word is “on the street” and everybody and his brother are now aware.  It is also frustrating when a Seller signs an LOI and heads down the road towards selling without an attorney, or when a Buyer tries to “go it alone” and prepares their own Purchase Agreement.  Whether Buyer or Seller, get an attorney involved early on, and not your cousin Sid, the divorce attorney, get someone that truly knows our industry and practices.  It’s not just about words on paper, there is tremendous value in knowing what to put into (and what to leave out of) a Purchase Agreement.  Some items can be negotiated, some are critical, let the pros help you. 
          Ken, you are spot on when you say that there is more to the transaction than “the multiple”.  There are too many moving parts to list that can erode the value of your company in a sale.  A sky high multiple isn’t so sky high when 20% of the RMR goes away due to restrictive exclusions and definitions, or overbroad holdbacks and contingencies.  Congress is about to “simplify” the Tax Code again which means that Sellers (and to some extent, Buyers) are going to have to navigate complicated new tax rules and regulations that could also reduce the net price or a Buyers ability to minimize taxes on purchased RMR.  Your local accountant may only be involved in a sale once every few years, and has most certainly never encountered a transaction in which the key asset is a stack of paper contracts.   I spend a lot of time on conference calls with Sellers’ accountants who have no understanding of Qualified RMR, Attrition, Holdback, or scores of tax consequences in the sale of an alarm company.  The manner in which the transaction is structured can make a difference of 30% or more in taxes and residual value of your company.  Rely on experienced legal counsel (like Ken and his Associates) and brokers to properly advise you.  Don’t DIY it.
Mitch Reitman
Reitman Consulting Group
Fort Worth, TX 
          Good advice.  Mitch is leading a Round Table at ISC with me.  Call Stacy to see if you can join us.  If you have a sale, selling or buying, Better Call Mitch even if you already have Saul.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301