How Creative Deal Structuring Kept This Business Sale Moving
How Creative Deal Structuring Kept This Business Sale Moving
Some business sales are straightforward. Others require patience, creativity and a willingness to keep looking for common ground.
A recent healthcare transaction I managed on the Gold Coast involved the sale of a long-established clinical business together with its commercial freehold.
The purchaser was a local professional and first-time business owner looking towards a significant career transition. For the vendors, the sale was equally significant. They had spent decades building the business and wanted to see it continue under an owner who respected its history, team and clients.
There was considerable interest in the opportunity, but as the transaction progressed, an important challenge emerged. Following due diligence and the lender’s assessment, the level of business finance available was lower than the amount required to complete the transaction.
Rather than allowing the funding gap to end the sale, the buyer and seller, with assistance from their legal, accounting and financial advisers, explored a structure that could work for both parties.
A portion of the purchase consideration was ultimately structured through agreed staged payments following settlement.
This provided a pathway to bridge the funding gap while maintaining the commercial terms negotiated. Importantly, the structure and documentation were agreed between the parties with advice from their professional advisers.
The accompanying commercial property added another layer of complexity.
Following independent legal, financial and specialist advice, the purchaser established a Self-Managed Super Fund to acquire the freehold. Although the business and property formed part of the same broader acquisition, they involved separate funding, legal and compliance processes.
From a marketing perspective, I presented the business and property as distinct opportunities. The business had its own Information Memorandum, while the property had a dedicated guide incorporating a floor plan, specifications and details of the customised features supporting the clinical operation.
As the transaction progressed, the professional team expanded to include solicitors, accountants, business and property valuers, building and pest professionals, lenders, a mortgage broker and an SMSF specialist.
With so many parties and interdependent requirements, the anticipated settlement timeframe extended.
For me, this is where the role of a business broker becomes much broader than simply introducing a buyer and seller.
My role was to facilitate communication and negotiations, keep the parties informed, identify where progress was slowing and work alongside their professional advisers to keep the transaction moving towards settlement.
The transition also extended beyond settlement. The former owner has remained connected to the business in a limited ambassadorial capacity, providing continuity and goodwill while allowing the purchaser to establish their own leadership.
This transaction reinforced an important lesson for me: a gap between buyer and seller does not always have to be solved by changing the price.
Sometimes the solution lies in finding an appropriate structure, developed and documented with the right professional advice.
When the buyer, seller, broker and professional advisory team remain focused on the same objective, even a complex transaction can find a pathway to settlement.
Tags: management sale advice
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