We all know that structural changes and economic forces have taken a toll on owners of print and graphic communications companies, but these pressures are especially deadly if business partners are not on the same page.
At NAPL, we continue to see the negative effects of dysfunctional ownership as manifested by owners seeking buy-outs, distressed sale, or restructuring as surgical procedures designed to ease the pain.
In an industry heavily populated by family-owned businesses and privately-owned entrepreneurial partnerships, the increase of cases involving dysfunctional ownership is a serious issue.
If you are buying out a partner, either by yourself or via a "merger", here are six considerations:
- What is the value of your partner's interest in the business?
- How does your partner's role and compensation affect this valuation?
- What is the impact on customers and employees if you have to replace your partner's function?
- What is the impact on cash flow to replace your partner and pay for his/her buy-out?
- How will personally guaranteed loans and leases be handled in the context of a partner buy-out?
- Would you be better off buying out/replacing the partner or working together to sell the business?
For the really tough considerations beyond this blog, especially those involving distressed sale of business and orderly liquidation for the benefit of creditors, engage professional resources and DO NOT DO THIS ON YOUR OWN.
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