Top 10 Considerations When Selling Your Company to a PE Firm

For a board of directors of a public company, perhaps no decision is as important (and litigious) as the sale of the company in a change-of-control transaction. The good news is that Delaware courts have a long history of being deferential to directors, and that while heightened "Revlon" duties (that is, the duty to obtain for shareholders the highest value reasonably attainable) may apply, courts recognize that "there is no single blueprint" for selling your company. But therein lies the rub. There is no one-size-fits-all approach that necessarily works. And when the buyer is a private equity (PE) firm, additional issues may arise. What matters most is good process, exercise of good judgment, making an informed decision and maintaining a good record of that. In this article, litigation partner Michael E. Swartz and former SRZ attorney Pavel A. Shaitanoff discuss 10 considerations to keep in mind when selling a company to a private equity firm.