Every so often, VendingMarketWatch.com publishes news that a vending operation has been acquired by a new owner/operator. And while we have published ways in which to go about selling a vending company, there is little information about those who do the buying. What happens if you’re an operation looking to expand and have the capital to do so? What’s the first step and how long does the entire process take from a buyer’s perspective?
Whether you’re a novice to vending and looking to purchase your first operation or a veteran operator hoping to expand territory, here are answers to your most pressing questions on the topic of buying a vending company.
- I’m looking to expand my operation and am interested in acquiring other vending companies. What is my first move?
In purchasing or selling a vending company, having a consultant to help with the process is a good first step. Consultants know the business and those operators looking to sell. They will discuss with you the goals for the purchase as well as help you understand issues and other things to consider when acquiring another company.
- Does my consultant make contact with possible sellers or do I?
In most cases the consultant will provide you with features of the selling company without revealing who that company is. “This is important for gauging your interest in whether or not the acquisition is in your best interest,” said Stan Josephson, co-owner of JS Business Services. “Once you have expressed interest and executed a confidentiality agreement, the seller’s name is then revealed,” he continued.
- When do I get to see financials of the company I’m interested in purchasing?
According to Josephson, preliminary information such as financial highlights, operating area, reason for sale and other major information about the company will be disclosed once the confidentiality agreement has been signed. Once you’ve had a chance to review the preliminary information and decide you’re still interested in learning more, your consultant can help schedule an on-site appointment if desired.
- If I like what I see at the company, how long will it take to close the deal?
First, said Josephson, you have to make an offer to see if the seller will accept your price and terms. Your consultant can help determine a good price to pay for the company. You will make a formal offer through a Letter of Intent, which, when signed by both parties, will become the basis for the Purchase Agreement. From there, due diligence will verify that the seller has provided correct information about his/her company. Your attorney, which should be with you along this entire process, will be the one to draw up the Purchase Agreement, which can occur simultaneously with due diligence. The length of time could be three to nine months to close a sale, but that depends on a number of things and varies with each acquisition.
Have more questions about the process? Let us know at [email protected].
