Frequently Asked Questions

It generally takes, on average, between six to 12 months to sell most businesses. Some businesses will take longer to sell, while others will sell in a shorter period of time. It is important that the business be priced properly right from the start. Some sellers, operating under the premise that they can always come down in price, overprice their business. This theory often “backfires” because buyers often will refuse to look at an overpriced business.

It is true that most buyers will to buy 100% of a business or at least a majority stake in it, but a minority ownership position is still an option. There are many reasons to consider selling a minority stake, so don’t assume that selling your business is an “all or nothing” affair.

Time and reliable information are of the essence in any business sale transaction. A buyer will want up-to-date financial information. If you use accountants, you can work with them on making detailed information quickly available. A business owner should always be prepared should a willing buyer appear.

You should not prematurely tell your employees. There will be a right time, but if you are in the beginning stages of considering selling your business, the actual sale could be a year away. Your key employees could begin looking for work, most likely at your competitors. The value of your business could be affected by losing key employees. In addition, key customers could find out the status and begin looking for a new provider if they are uncertain about the future.

Panama like other fiscal tax havens (e.g. Andorra, the Bahamas, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, the Cook Islands, The Island of Jersey, The Isle of Man, Mauritius, Lichtenstein, Monaco, Panama, St. Kitts, and Nevis) offers numerous legal and fiscal incentives.

Investing in Panama is as safe as in these other countries… if you work with reliable service providers and advisors.

Strategy Latam does not communicate any information except as part of a contractual relation. Applying this rule to the letter, we do not provide any client or transaction references.

A business appraisal is an opinion of the best or fair value of a business. The appraised value is the best estimation of what the business is worth, while the fair market value is what it should sell for.

The opinion of value tries to determine the value of a business based generally on an analysis of the financial records of the company, the environment in which it operates, industry competition, the risk associated with the business, and current market situation.

All owners would like to know the market value of their business. Unfortunately, no single quick ‘rule of thumb’ can help determine the true value of a business. In fact, business valuations are performed in order to take this sort of guesswork out of valuing businesses.

We use several sources of information about industry sector, sold businesses, market conditions, etc. This help us to provide a more accurate valuation that should be in line with current market conditions.

Maintaining confidentiality is of paramount importance. We rank this element at the highest level.

Sound working relations with employees, customers, suppliers, and bankers are important factors to a company. Any premature indication of a possible change in ownership could disrupt these relations and weaken the company’s competitive position.

In a business and legal environment where confidentiality is often challenged, we protect our clients by communicating only the necessary information to parties who have previously signed a Confidentiality Agreement (or non-disclosure agreement).

Strategy Latam does not communicate any information except as part of a contractual relation.

We will need to review documents and information concerning your business in order to evaluate it.

Generally required documents:

- Corporate Resolution
- 3 to 5 years Tax Returns
- 3 to 5 years Profit & Loss Statements with Balance Sheets
- Interim Financial Statement within 90 days
- Asset or Depreciation List
- Detail of any Notes, Mortgages or Liens

Note: A Confidentiality Agreement must be signed between Strategy and your company before submitting any information to us.

We work with passive or active shareholders, company managers, business project developers, creators of solutions or even inventors of products or processes. We are involved in sale, merger, acquisition of commercial, industrial or financial companies and assists in the realization of business and investment projects in the Republic of Panama or abroad with the collaboration of our strategic partners.

The range of businesses that we deal with varies between USD2MM and USD50MM.

We work on an ad hoc basis on smaller sized businesses according to certain acceptation criteria.

We use various vehicles to market a business or business project in the most confidential and discreet method possible. We realize the sensitivity of this issue and work diligently to protect stakeholders and their interests.

We employ a targeted approach to contact compatible buyers and investors.

We use our database of qualified buyers and prospects (from private investors to investment funds), network of contacts (through strategic partners), traditional or electronic media (newspapers, publications, journals, business websites, newsletters, etc.), and sometimes social networks.

We don’t use a “template” fitting all approach that many M&A Advisory firms or Brokering firms use. We take the time to get to know you, your company or project history, and your financial aspiration/needs to target the adequate buyers.

Our goal is to find the optimal candidate for you and your company. Because of this we take the time to profile, research, and prescreen/evaluate potential buyers.

Our general terms, conditions, and fees are *1:

- Preparation & case analysis: variable cost, based on complexity, non-refundable.
- No up-front valuation and marketing fees
- No retainer fee
- Performance/Success fee: Percentage fee or double Lehman fee structure depending on the transaction value and complexity of the deal.
- Non-exclusive agreement (except for particular cases)

*1: Fees are subject to change if extra or unexpected work are undertaken by the company.

Transaction value is what a buyer is willing to pay for a business. This value can include:

- Total value of all cash, securities, or other assets or property
- Accounts receivable
- Inventory
- Work-in-process
- Noncompete agreements
- Licensing agreements
- Employment or consulting agreements
- Capital stock or equity of the company
- Assumption of debt

Most of the time, businesses are sold through a leveraged transaction where the company is purchased by the buyer with a combination of debt and equity. The acquired company’s cash flow is used to secure and repay the borrowed money. We don’t recommend accepting a low-money down offer. It is very rare that the business will earn enough to service the level of debt