IBA is a 51-year-old Mergers & Acquisitions firm.  We have successfully sold privately held companies and family businesses to strategic acquirers to facilitate growth into new geographic markets, product lines, and to eliminate competition.  IBA has sold companies to financial buyers seeking better returns on investment than can be found in the stock, bond, or real estate markets and to roll-up industries in pursuit of a future exit to a bigger buyer at an enhanced multiple of EBITDA from where previous acquisitions were made. We have sold businesses to non-profit entities that felt specific acquisitions would allow them to fund philanthropic objectives and train a served demographic population.  IBA have also sold many businesses to individuals pursuing entrepreneurial dreams.

As a sell side focused representation firm, it is not our job to decide who our clients complete transactions with as the sellers of businesses.  It is our job to make sure that the decisions made are from a foundation of knowledge supported by appropriate professional advisors and that conveyed transactional objectives are achieved.   It is common for IBA clients to have multiple choices to select from on the buyer side of the table.  Frequently, the final decision of who to sell to is not over price but involves who will make the best successor in ownership for a business.

Unfortunately, nationally, former business owners, both large & small, have been disappointed with increased frequency related to what happened to their businesses post transaction after they sold to private equity demographic group buyers.  Beloved Pacific Northwest brands like Eddie Bauer and JoAnn Fabrics are no more because of the business acumen of executive leadership post acquisition.  I am not saying don’t sell to private equity.  There are many examples where their stewardship of companies was superior to their predecessors.  I am saying that in vetting a private equity buyer you may want to consider some additional metrics other than the gross sale price paid for a business in determining if a private equity buyer is the right exit strategy for you.

The following is some background information on what has and is taking place in America presently related to private equity.  This article provides good introductory information: https://www.theguardian.com/us-news/2026/sep/04/private-equity-boom-hospital-job-layoff The following podcast does an excellent multiple hour deep dive into the subject:  https://youtu.be/Fg-CkR0P5fE?si=nbNmsR2jmoZHzzoY

The first item to evaluate when vetting a potential private equity buyer is who will be running the business post sale and from where.   In some transactions, previous ownership will be retained.   This can be a positive outcome for some owners as it allows them to take chips off the table and bring in more resources and talent to facilitate growth.  From a private equity perspective, retention of executive leadership can mitigate turbulence & risk associated with the transfer of ownership.  If the sale is being completed to facilitate retirement or relocation and retention of ownership is a purchase requirement, this element alone can eliminate the attractiveness of a specific buyer.  It is also important to assess if ownership’s engagement will be “hands on” with existing staff being retained and local.   No issue is more important to future company success than who is at the helm of the business as it charts a course into the future.  The local element is important because it is a frequent strategy for private equity to centralize control, standardize, and to improve profits by staffing administrative elements in a manner where redundancy is eliminated (How many CFO’s and bookkeeping departments does a business need?) and labor rates can be dropped.  A customer service department in Seattle, Washington needs to start wages at $21.30 (https://www.seattle.gov/laborstandards/ordinances/minimum-wage) while one in Rapid City, South Dakota can start employee wages at $11.85 per hour (https://dlr.sd.gov/employment_laws/minimum_wage.aspx).  Even lower rates can be achieved by having customer service provided by an overseas provider.

These issues are truly things beyond a business owner’s control post sale and may not be worthy of passing on a private equity buyer, but at the same time many business owners consider their staff extended family and became icons in communities based on being job creators and the thought of seeing staff laid off and their lives detrimentally impacted post sale may not be a legacy they want to have tied to themselves.

Similar to staff, a sale to private equity can impact customers.  The impact can take the form of enhanced pricing, a decline in product quality, and/or the elimination of locations.  Seeing an old location vacant or hearing about how things are now at the business can be a bitter drink for an entrepreneur who had put a significant amount of their blood, sweat, and tears into a business over multiple decades.  My father was a veterinarian.  The veterinary industry used to be filled with individually owned hospitals featuring community beloved pet doctors.  Today, the industry is dominated by corporate owned locations where monetizing customers to the maximum level in the shortest amount of time is prioritized over customer care, skill, and superior counsel associated with our four legged family members.  Selecting a successor can be as much about who will be the best steward for your brand as what you can paid a closing.

The financial proceeds received at closing are frequently one of the most important metrics for buyer selection.  An all cash transaction has a fixed amount for the transfer of ownership which is pretty much set in stone minus some legal elements likely to address trailing liabilities.  Private equity firms frequently propose sophisticated acquisition packages that can include a combination of cash, seller note, retained equity, and other potential elements.  In theory, these terms can have positive outcomes for both sides. A seller note can provide interest income in addition to the principal amount paid back.  Retained equity can grow in value and be cashed out at a future date for an enhanced value over what it was worth when the business was sold.  I have also seen situations where seller debt, commonly subordinated to primary lenders and investors, is not paid on time by private equity.  I have also heard of transactions where a seller was sold a beautiful vision of the future by private equity only to have their equity position end up worthless.  A $7 million dollar sale where 30% of the price was paid with eventually worthless stock ends up being a sub $5 million transaction when the dust has settled.

The sale of a business is a sophisticated, nuanced process requiring significant knowledge, experience, and skill to complete in a best practice manner for the best available market terms.  Entrepreneurs are used to making executive decisions.  They simply need the relevant information to make the decisions that are appropriate to achieve their transaction objectives. IBA has successfully led over 4400 business owners to closing.  We welcome the opportunity to share our knowledge and resources. All conversations with IBA are held in strict confidence and no compensation is sought until successful project completion (https://ibainc.com/blog/gregory-kovsky/why-a-business-owner-should-select-a-business-sale-intermediary-who-is-only-paid-a-success-fee/).

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.