There is a saying in the service sector: "The services we offer are good, inexpensive and fast-pick any two." Sale opportunities that were traditionally available to privately owned companies in the energy and other sectors had a parallel mantra attached to the offerings of potential buyers and financiers: "We offer top dollar and opportunities for existing management to participate in the company post-sale-take your pick." Typically, this choice summed up the dilemma facing ownership of the company for sale. Do we sell to a strategic (industry) buyer for a higher price and see the company as we know it disappear, or are the non-monetary attractions of a management-led buyout with new financial partners sufficient to tempt ownership to leave some chips on the table? A difficult choice, indeed, for the entrepreneur whose loyal and capable employees have helped build the value of the business. Happily for those in the energy business, strong interest and participation by private-investment funds in oil and gas transactions have closed the gap between strategic buyers and financial buyers, and those difficult decisions rarely need be made. There are good reasons why industry buyers have paid and continue to pay top prices for entrepreneurial companies. They can typically short-circuit the due diligence process that precedes all transactions because of their experience in the business sector in which the target company operates and/or familiarity with the business itself. They also have inexpensive currency readily available from public-capital markets for the purchase, whether it be cash or stock. For more on this, see the March issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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