Mergers & Acquisitions Advisory

A Neumann & Associates, LLC

June 3, 2012

Offer Received…Now What?

By Joseph Eneldas


Receiving a purchase offer on a business is very often perceived by business owners as the “finishing line,” whereas in reality, this is only the first step in transferring a business.

“Too often, we can sense the business owner’s excitement and relief from finally having received an offer” says Achim Neumann, President of A Neumann & Associates, New Jersey,” however, in reality the work only starts at this point.”

Typically, the first step is to review the type of offer. If the offer is a Letter of Intent, then in most cases it is binding on the seller’s part, but leaves a buyer with considerable freedom to make decisions— including whether the buyer wants to ultimately move forward or not. Preferably, both parties will agree on an Offer-To-Purchase agreement that spells out specific timelines and tasks for each party, and if they are not maintained, will render the offer invalid.

“Each offer differs, and in this process it’s important to provide the least amount of credit exposure for the seller” says Gary Herviou, Director Marketing, Central New Jersey. “For example, if the offer provides no credit collateral for a desired seller note other than just the business assets, then we need to determine if the assets can be ‘secured’ by way of an UUC (Uniform Commercial Code) filing, and whether they are sufficient as loan security.”

Once the offer is accepted by both parties, the due diligence process starts.

“Very often buyers perceive the due diligence period as a time when they can ‘make up their mind’ about whether to purchase the business or not,” explains Michael Gersten, Director Marketing, North Jersey, ”whereas due diligence is indeed a period to merely verify the information presented in the confidential memorandum.”

For instance, if the information presented in the prospectus differs significantly from the documents received—such as payroll records, banks statements, tax filing, etc.—then the buyer has to determine if he wants to abandon the deal or renegotiate it further. It is important that a seller is forthcoming with all documents that the buyer requests at this time.

Part of the due diligence process includes establishing the lending facility for the buyer to acquire the business. “Fortunately, we have been in an excellent position and can refer various lending sources to a buyer” says Neumann, “and despite a few exceptions over the past three years, obtaining funds to acquire a business has been successful in the majority of closings.”

Sophisticated Merger & Acquisitions professionals such as A Neumann & Associates will have a well-established network of lenders to ensure sufficient funding at closing.

Finally, a seller needs to help a buyer to transfer licenses. This can be applicable for professional licenses, such as medical practices, legal, engineering, architectural or plumbing licenses, or it can be a matter of transferring Medicare vendor numbers, etc. Each business transfer has its own challenges and a good M&A firm will have experience in the transfer of such licenses. A solid offer will also spell out how long the current business owner will stay on to train and facilitate the license transfers after the closing date.

In sum, it is important for a business seller to recognize that receipt of an offer is the “beginning” of the business transfer process, not the “end.” A well orchestrated transfer will not only result in a successful future business and a happy new owner, but will also yield a timely and consistent payments on the seller note— a goal both parties should keep in mind.

About A Neumann & Associates, LLC

A Neumann & Associates, LLC is a professional mergers & acquisitions and business brokerage firm having assisted business owners and buyers in the business valuation and business transfer process through its affiliations for the past 30 years. With an A+ Better Business Bureau rating, the company has senior trusted professionals with a deep knowledge based in multiple field offices along the East Coast and has performed hundreds of business valuations in its history. The firm’s competitive transaction fees are based on successfully completing transactions. For more information, please contact A Neumann & Associates at 732-872-6777 or

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Client Testimonials

“I had been in touch with Karin and Gary from A Neumann & Associates regarding some opportunities and was looking forward to meeting with them. Hence, when they organized a seminar in Princeton, NJ, I was quick to sign up. The seminar was very informative as the team walked the attendees through various scenarios and referenced real life buying/selling situations they had been through. The sessions by Gary, Karin and Achim were crisp and focused and brought clarity to potential seller and buyers. I strongly recommend the team and look forward to continue working with them.”

Gaurav Tyagi

“Thank you for your Event on "How to value, Sell, and Buy A Business for Maximum Profit" and the insight into ANA’s approach on what is involved in the Business Exit for sellers. Garys Hervieiou's "Business Valuation", Achim's "Deal structure" presentation and Karin’s "Preparing the Package" are real street knowledge shared. They answered attendees questions which makes it more interesting for learning from others. Great for small businesses like us. The presentations were totally worth our time and travel for the event to Princeton, NJ from Rockville MD. Ravi Bhutani, President, CIPS”

Ravi Bhutani

“Gary, this is to thank you for an excellent job done in selling our business. We could never have done it without your professional expertise, dedication and time put in without reservation to make it happen. We will gladly and highly recommend you to anybody in our position.  It was a pleasure to work with you.”

Pat Iammatteo, Owner

“Your vetting is simply outstanding, among the best I've seen from a broker.”

Eric H., Investor

“I recently contacted A. Neumann and Associates about getting a valuation of my business done. I spoke with Marc, who explained the process in detail. After meeting with Marc in order to get a clear understanding of my business, and what I was hoping to accomplish. His patience in answering all my questions and his knowledge of the proper way to market my business gave me great confidence that this is the firm I will be using to sell my business for max value. Working with Marc at A Neumann & Associates was very easy and professional. I did not know all that was going to be involved in selling my business but they helped me through the process. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. I highly recommend this firm to anybody who wants to sell now or down the road. Marc not only knows his stuff, but actually is a real nice guy.”

Double Diamond

“Used A Neumann & Associates to sale my business. could not imagine having done it with out the patience and experience Gary provided. Thanks Gary,”

Dennis Frazier

“Working with Marc and his company was a pleasure. What I thought was going to be a just another one of those pushy sales companies was just the opposite. Polite, knowledgeable, and a pleasure to talk to and deal with. Marc handled most of the interaction and he has one of the greatest demeanors. Again, it was a pleasure working with him and his firm.”

Douglas DiCeglio

“I recently completed an acquisition using A Neumann & Associates. Tony Valentino was very helpful and accessible during the entire process. They do a thorough job vetting both parties and got us to the finish line.”

Srini Mudambi

“Claus out of Florida helped us with the sale of our business. We had never done anything like this and him and his team walked us through the process from start to finish. We had some challenges through the process and Claus continued to show up even in the difficult conversations.”

Colby Harris, Co-Owner, Del Mar Designs

“Claus Madsen thoroughly helped us with selling our company. From the 1st introductory meeting explaining to us what was possible, to providing us with resources to assist with the sale. Claus was invaluable throughout the whole sales process. Claus was with us every step of the journey and always made himself available for any questions or issues that came up along the way. If you are interested in selling your business, I encourage you to reach out to Claus and the ANA team so that they can let you know what’s achievable. These guys will make it happen!”

Ron Harris, Co-Owner and Vice President, Del Mar Designs
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Contact A Neumann & Associates, LLC

If you are considering selling your business, please contact us to learn more about our comprehensive service spectrum. Our experienced professionals will answer all your questions about selling a privately held business in complete confidentiality. Please fill out our contact form, or call us at 732-872-6777. We will contact you directly and will never identify ourselves to your employees.

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