The M&A Process
The M&A Process in Eight Steps
It is important that the M&A process does not interfere with you staying focused on your company, so we handle all the details. As seasoned transaction dealmakers, we are with you side by side, providing guidance and assistance throughout the transfer of ownership.
1) First, we focus on your objectives; then develop a customized strategic course of action to market your company. We will discuss the issues important to you:
a) Do you want to cash out and leave the company?
b) Are you willing to stay on for a transition period?
c) Are you willing to carry a note for a small part of the sale?
d) Would you like to work for the acquiring company, doing what you enjoy most and not doing what you like least?
2) Next we will do a valuation analysis of your company. We have the knowledge and experience to provide guidelines on establishing a price that would likely be offered for the company by an investor. This establishes a basis for separating good offers from bad ones.
a) A valuation involves analyzing your financial statements and making any necessary adjustments to demonstrate the company’s true potential in terms of earnings before interest, taxes, depreciation and appreciation (EBITDA).
b) The valuation will also look at the intangible factors that affect value. Examples include key personnel, relationships with customers and suppliers, the competitive market place, barriers to entry, and any Intellectual Property (patents, trademarks, copyrights, licenses, etc).
c) To be effective, a valuation requires a review of comparable sales of similar companies. The details of private transactions are hard to find, but we have been successful in finding data of completed sales transaction of comparable businesses.
3) We will prepare a list of possible acquirers for you to approve. As we discover the value drivers in the valuation we will begin to get a sense of who the most likely buyer candidates are for your company. Because confidentiality is so critical in the sale of a privately-held company, we will only contact those prospects approved by you.
4) As we determine the value of your company and identify potential buyers, we will assemble a Confidential Business Review which will highlight all the reasons an investor should be interested in acquiring your company. No prospective investor will see this document until a confidentiality and non-disclosure agreement (NDA) is signed.
5) As we market your company we will begin procuring Letters of Intent. We have the requisite skills with which to negotiate with prospective investors to obtain the best price and terms in a deal structure that is acceptable to you.
6) When you and the investor have agreed to the terms of the Letter of Intent, we assist you in facilitating the timely transfer of all the necessary documents needed to complete the due diligence.
7) Because of our 30 years of deal making we know the key people that may help with the due diligence. If desired we will recommend any experts that you may need for due diligence. This may include accountants and tax advisors. Once the due diligence is completed, if you have not selected an M&A attorney, we will work with you to select one that is best suited for your transaction. Click here to see the steps needed in selecting an M&A attorney.
8) Once you have selected one, we work with you and the attorney to close the transaction. This involves monitoring the process and assisting you with any and all critical issues, such as financing, legal and accounting requirements that are needed to complete the definitive purchase agreement.