The Sale Process
A sale process will be most effective in the event that the vendor and supporting team is adequately prepared prior to commencing the process. Benefits of appropriate preparation include:
- minimising time delays during the process which can undermine investor confidence, impact value and/or result in the transaction not proceeding .
- more efficient management of the workload of internal resources for preparation and collation of internal information prior to opening discussions with acquirers.
- minimising consultant and adviser costs through the sale process with internal resources able to manage and prepare the information requirements.
Accounting and legal advisors will be able to assist you with the information expectations of acquirers in preparing for the sale. We highly recommend that specialist M&A advisors be utilised through the process who can work with your existing advisors due to the following factors:
- Working in transactions and valuations on a daily basis enables frank discussion with respect to value, and how to present your business;
- Specialist advisors have a wider array of networks of potential acquirers; and
- These advisers tend to have soft skills to manage the process and buy-side advisors.
Following the engagement of advisors, the key steps in the sale process include:
- Understanding deal "needs" and "wants" before entering discussions and negotiations with potential acquirers.
- Clearly articulating the reason for the sale, and the growth options that will be open to an acquirer.
- Preparing a 1 to 2 page investment overview to distribute to potential acquirers. This can be done on a "no-names" basis to maintain confidentiality.
- Preparing an information memorandum that provides a summary of the business and financial information. Confidentiality agreements should be signed prior to releasing the Information Memorandum to potential acquirers.
- Establishing key terms of deals prior to entering due diligence by way of non-binding indicative offers.
- Limiting access to the data room to one to two genuine bidders.
- Managing final negotiations and execution of sale and purchase agreements
If you are considering the sale of your business please contact Matt Swan or another member of our Corporate Finance team for a confidential discussion by clicking the button below.
This is article 7 of a 7 part series.