Challenge: Close the buyer deal in 5 weeks from the receipt of Letter of Intent.
Buyer and his wife had 3 kids and were living in Houston. The buyer was currently employed and looking to purchase a business in Dallas. He and his wife had found a business in Dallas, and were preparing to move to Dallas before the beginning of the school year and start their new business. As they were negotiating the deal, they learned about the business we had for sell through a personal connection with our firm. At first, they were reluctant to look at our deal as they had already made their minds up about their current target acquisition. The business TVG had for sale was the same type of business they were trying to purchase. He conceded to look at the business TVG had for sale and decided quickly that this was a better deal for him and his family. It was in a better location, more cash flow, and served an upscale clientele that he was hoping to have. He and his wife flew that weekend to tour the location and meet the business owners. He quickly informed us that he would be submitting a Letter of Intent. The closing date in the LOI was scheduled to transpire in just 5 weeks.
Approach
- The marketing package was so comprehensive that the Due Diligence item request was manageable. Most of the significant questions had been disclosed prior to the LOI. The Due Diligence items requested were more of a matter of items needed to make the transition smooth and they were delivered in a timely manner to the Buyer.
- The deal had already been pre-approved by an SBA preferred lender. The SBA department of this bank was experienced and nimble. The bank was ready to make the deal happen as soon as TVG could introduce to them a qualified buyer. The buyer had the financial strength and the perfect background for the business acquisition. The banker had no problem approving the buyer.
- Both the Seller and Buyer were extremely motived to get the deal done. Each side responded quickly to the questions and requests. The negotiating was done carefully yet swiftly.
- The Seller was most accommodating to the Buyer. It is not uncommon for a Buyer to get very nervous about the decision they are making and the debt they are incurring. As we got closer to the closing table, the Buyer was juggling the packing of their home, quitting a job, closing on the purchase of a new home in Dallas, and getting their kids registered for school. The Buyer at times would be stressed and nervous and we worked to accommodate their requests and keep all the moving parts moving on track.
Result
As we all sat around the table at the Escrow Agents office, the Escrow attorney said she had to double check the date of the LOI. She thought it had read the prior year, and not the current year. She thought it couldn’t have been dated this year as it was only about one month ago. She doubled checked and certainly, the LOI was dated only a month earlier. She said she had never seen a deal go from LOI to close in one month. With the extensive preparation done before the business was put on the market, the comprehensive information shared in the marketing package, the experienced SBA preferred lender, the motivated Buyer, and Seller, we did, indeed, close in just 5 weeks.