Understanding seller’s objective

Understanding seller’s objective

Profit: There are many situations in which the original shareholders of a company wish to make profit or a family owned business without a successor decides to give away the full control of a company. In these cases, the seller’s main objective would be to make the maximum profit from the deal by maximum the price at which the company is sold.

Welcoming Strategic Investors: The Buyers of a firm are generally the companies that are its suppliers. Considering the position and overall efficiency of the two sides, the seller may agree to swap his shares with the buyer or let the buyer acquire its equity buy contributing his capital, assets or technology.

New Sources of Funding: In some situations, the seller desires to raise capital for the company’s future growth or he might run into financial crisis despite the sound operations of the company and wishes to attract funds to improve the financial crisis. In such situations, the buyers would look for a stable cash flow and even distribution of futures profits and would not otherwise interfere in the functioning of the company.

Disposal of Investments: Sometimes a company thinks of disposing off its non – core investments or a financially strapped business. Under such an objective, the important point of negotiation other than the price at which the company is sold would be the safeguard of the interest of the employees

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