Sale of business to employees

[Grant]

Not sure how to go about this, but i have small 2 companies having staff of 8 & 9 respectively.

I would ideally like to sell the 2 companies to the respective employees at a nominal price.
Both companies are financially sound and do very well, both have been in operation for 16 & 17 yrs respectively.
The 2 companies have a common client who's business comprises about 65% of the income to both companies, that continued business relies to a very large degree on my close & trusted relationship with the client.

So, i am looking at initially selling off about 80% of both companies to the staff. The remaining 20% i will hold as i slowly withdraw, but oversee the running of the companies until such time as i feel they can operate independently without me.

My first concern is the major client.
I am going to have to meet with them and explain the situation, pretty much in full detail. Ultimately, given a couple of requirements & know they will have, i'm sure they will support the sale in principal, and quite possibly extend a little leniency (to the new owners of my companies) should there be a few hiccups along the way.

In essence, i want to sell to the staff as they have been exceptionally loyal to both myself and the businesses, they all work well as a team & feel they should be rewarded for both their efforts & loyalty over the years.
During the course of next week & be meting with both my accountant and attorney in seeking advice, but all ideas and suggestions from folk here are welcomed.

Anyone here done this before ?

 

[IzZzy]

All day, every day (as part of my job)

 

[Grubscrew]

As a noble gesture this is, would it be fair if you can't guarantee business from the 60% customer. Also not everybody is meant to own a company. Maybe sell it to a few employees who can run a company and the rest getting some form of profit share rather?

 

[TEXTILE GUY]

Tried to sell my mother in law once .... as a going concern. 1 employee - pimp keen to sell.
The business came complete with one bedroom flat and red light.

Only once I had found a potential buyer I realised she was destitute going through a divorce .... oops

Deal fell through

other than that .... no, but good luck.

 

[Grant]

As a noble gesture this is, would it be fair if you can't guarantee business from the 60% customer. Also not everybody is meant to own a company. Maybe sell it to a few employees who can run a company and the rest getting some form of profit share rather?

the main customer is my greatest concern which is why i need to discuss the issue with them. my relationship with them by necessity has to be very open at all times, all cards on the table, so to speak.
selling to a few with an option of profit share is also a possibility.

i will be speaking to my attorney etc during the course of the week, then getting together with the main client, and after that, depending on the outcomes of the various meetings, discuss the issue with staff & get their input / feelings on the matter.

 

[Grant]

Tried to sell my mother in law once .... as a going concern. 1 employee - pimp keen to sell.
The business came complete with one bedroom flat and red light.

Only once I had found a potential buyer I realised she was destitute going through a divorce .... oops

Deal fell through

other than that .... no, but good luck.

you narrowed your options from the outset, you should have included a rental option