BUSINESS DIVESTITURES

Sooner or later will come that moment in the life cycle of the privately-held business or family enterprise when the business will be sold to recoup the initial investment and realize any value accumulated in the business. This divestiture or divestment exercise converts shares on paper into cash in hand for the owner. However, there is no organized market (such as a stock exchange like the TSX) for the public trading of the shares of privately-held enterprises. How much is the business intrinsically worth and how much is the market prepared to pay for the business? Where and who will the buyers be? What are the pitfalls to avoid?