February 10, 2021
Selling a drugstore isn’t as straightforward as people assume. In fact, for some independent drug store owners, this can be the most decision they will ever make in their lives. You need the help of experts to guide you through the process and ensure that when you put your drugstore for sale, you come out with a winning deal.
With our years of experience and countless business deals, our experts at EVCOR have helped identify the five steps in the process of selling a pharmacy.
Do you know the real value of your drugstore? We’re not talking about a value that you ‘feel’ is right; it’s the actual estimated value based on proper analysis. This is where experts like EVCOR can help. Determining the value of a pharmacy involves understanding your total tangible and intangible assets. The sum total of these two assets subtracting any liabilities is often considered the sale value of the pharmacy. This, however, does not mean that your final sale price will be the same as the valuation. At this stage, we also help identify any opportunities that could possibly encourage higher offers.
Do you already have a buyer in place? If not, you’ll have to prepare to market your business to potential buyers. To be one of the unique pharmacies for sale means you’ll have to create a sales or marketing document known as a Teaser. It is recommended to keep the document very high level and anonymized at this stage without disclosing any genuinely confidential information. Once you have possible buyers showing interest, you can prepare a Confidential Information Memorandum to be taken out to those who qualify.
The bid process takes approximately four weeks, and it’s at this stage, you can check-in with potential buyers, share additional detailed information, and answer all Q&As as needed. At this stage, you can also ask for a Letter of Intent (LOI), a non-binding contract signed by both parties that essentially takes the pharmacy off the market for a period of time until it is supplanted by a definitive agreement.
The next step would be to start negotiation and preparation of Asset Purchase Agreement (APA) or Share Purchase Agreement (SPA). This is where the buyers will perform their due diligence to ensure the contract runs smoothly. Once the due diligence is completed, you move toward the closing process.
The closing process takes about another five weeks where definitive agreements are signed, finance and due diligence conditions removed, staff and vendor notices served, third party inventory count, and lastly, transfer of funds.
Are you looking to put up your pharmacy for sale in BC or any other city in Canada? EVCOR offers expert assistance in Toronto, Vancouver, Edmonton, and many other areas, including Calgary, Regina, Saskatoon, Winnipeg, and most other regions of Alberta, Saskatchewan, Manitoba, and Ontario.