Selling for Health Reasons: Running a Sale When Time Is No Longer a Variable

"If my health forces me to sell, I will have to sell cheap." You hear this from owners in perfect health, said as something too obvious to check, and you hear it again years later, in an office where the diagnosis has just landed. In most of the situations I have seen it is wrong, but it is wrong in a precise way, and that precision is what matters once time stops being a variable. Four myths circulate about selling for health reasons. Each one leads to a different mistake in how the sale is run.

"You have to sell fast, so you take whatever you are offered"

The reality is narrower: what has to move fast is the handover of the process itself, while the sale keeps its own pace. A buyer does not mark a company down because its owner is ill. A buyer marks it down on noticing that the ill owner is negotiating personally, replies three days late, cancels meetings and lets it show that nobody else holds the file. The urgency becomes visible, and that visibility is what costs, in the ranges I observe, somewhere between ten and thirty percent of what a comparable company would fetch in an ordinary process.

Picture a haulage company of 40 people in Valais whose 58-year-old owner learns in March that he faces six months of heavy treatment; a scenario, not a client. If he runs the sale himself between hospital appointments, the company sells badly, or does not sell at all. If within ten days he hands the running of the process to a body that is neither him, nor his family, nor his trustee alone, he keeps what is his, the decision, and frees himself from what drains him, the project manager's role. The sale then takes four to seven months rather than twelve to eighteen, and the price holds, because the person defending it is available every day.

"Nobody must know"

The urge to hide the illness is understandable, and it almost always produces the opposite of what it is meant to. Absences get noticed, so do postponed meetings, and a buyer who discovers in due diligence what was kept quiet for three months stops negotiating the price and starts negotiating warranties, the length of the escrow and the clause that will let them walk away. Confidentiality during a sale remains essential; it covers the sale project, and it is organised in circles.

The first circle forms in the week of the diagnosis: the spouse, one trusted manager, the trustee, the lawyer and the person who will run the process. Everyone in it knows everything, and knows who else knows. The second circle comes later: the bank, where a credit line depends on the owner being present, then the key managers, before rumour reaches them. Buyers, finally, receive a sober and accurate statement at the moment they sign their confidentiality undertaking. In the mandates I run, a serious buyer reacts to that statement with one question, always the same one: who is running the company today, and who will run it through the transition. Given a clear answer, the reason for the sale stops interesting them.

"Everything has to be signed before things get worse"

This fear leads people to sign too early what should wait, and to overlook what has to exist at once.

What gets signed within days is authority. A second signatory in the commercial register, individual or joint, so that the company does not fall into an organisational deficiency if the owner is hospitalised. Bank powers lodged with the bank, with the access rights to go with them. An advance care directive under the Swiss Civil Code naming the person who will manage the shares and exercise the shareholder's rights if the owner no longer can; without it, the adult protection authority decides, on a timescale no sale can absorb. Germany has the Vorsorgevollmacht, other countries an equivalent instrument: the name changes, the urgency does not. A written mandate to the body running the process. I have set out elsewhere the list of what must exist before an owner becomes unavailable; when an illness has been announced, that list is dealt with in a week.

What can wait is everything that commits value: the choice of buyer, the price, the structure. A forced sale leans naturally towards an earn-out, because the buyer sees insurance in it and the seller a way to close; it is precisely the clause an ill seller should refuse, since an earn-out assumes their presence to be earned. A fixed price, even a lower one, with an escrow limited to twelve months and capped warranties, beats a theoretical price half of which depends on a transition the seller will not be able to deliver.

"In the meantime, I will handle it"

The last myth is the most stubborn, because it looks like courage. The owner who keeps a hand on everything for as long as possible accumulates, from the day of the diagnosis, roles that were already incompatible in good health: patient, principal, person concerned, decision-maker, party to a possible conflict with family or managers, and project manager of a sale. In my practice, the hardest decision to obtain in the first weeks is this one: stepping back from the daily running of the process while remaining the one who decides. Delegating a written scope without giving up the decision is what lets a seller spend their energy on their health and on the three or four choices that are genuinely theirs.

One thing the diagnosis does not change. A company that ran without its owner before the announcement sells for the same price afterwards; a company that ran only through the owner sells for whatever a buyer can rebuild from it. The illness reveals a dependency on the owner that was already there, and that is the one variable nobody can still correct on the day time runs out.