Trade Sales
Introduction
A trade sale is a common exit for therapeutics developers. In a trade sale, the company is sold to an acquirer (the trade buyer), and the management is typically released (or hired into the new firm, either for a transition period, or permanently) and investors are repaid.
What
A trade sale is a common exit for therapeutics developers. In a trade sale, the company is sold to an acquirer (the trade buyer), and the management is typically released (or hired into the new firm, either for a transition period, or permanently) and investors are repaid.
When
There are many good answers to this question. “When they’re passing cookies, take a cookie” is one. Your strategy may define where you would or would not exit. Often, sadly, financial pressures often define the timing of a trade sale. We recommend that a trade sale should be seriously considered whenever multiple acquirers are willing to provide term sheets.
Why
Companies may choose to exit via trade sale for many reasons: perhaps the management team isn’t the right one for the next stage of development. Perhaps the investors have decided that the next stage is too risky, or too expensive. Perhaps an acquirer made “an offer you couldn’t refuse.” Because you can only sell your company once, this is an existential decision, and will likely have a large impact on you, your family, your colleagues, and your legacy. Engage whatever support you need to ensure a 11 strong finish!
Learning Goals
The stages of a trade sale, who do you need on your team, common terms, and common pitfalls.