16 Jul An Exit Strategy: The Process
What is the process to sell your business? When engaging an investment banker you can typically expect to the process to follow through six basic steps, business analysis, finding the facts, marketing campaign, the acquiring firm, auction, and negotiations. Below is a deeper look into each steps.
(1), Analysis: We will conduct a thorough analysis on your company in order to show any potential buyers the true profitability and potential behind your company. This process will also provide you with a range in which your company is likely to be valued by the market.
(2), Fact Finding: We will do some additional research on your company and industry compiling the information into a document called the Confidential Marketing Memorandum (CMM). The purpose of this document is to show investors the details on your company highlighting its value as it moves forward. This will then be used as we take your company to market.
(3), Marketing Campaign: We use a strategic marketing plan when we take your company to market. First, a list of 200 to 300 companies and investors that might have a unique interest in your company is built. This list may include companies in the industry, private equity groups, or other strategic investors. After receiving your approval to contact these parties, we will then send out a brief description of your company through a series of emails, letters, and phone calls. Once any interested parties have signed a confidentiality agreement they will receive a copy of the CMM. This process is important to maintain the confidentiality and professionalism of the transaction.
Throughout the acquisition of your company it is important to maintain the confidentiality of the transaction. This will ensure that competitors, clients, and employees do not make decisions that could be harmful to your company’s success. We must maintain the value of your company.
(4), The Acquiring Firm: We know that the success of your business is important to you even after you sell your position of ownership. For this reason we will conduct the research and maintain the files needed to ensure only those financially and managerially capable of the acquisition are given your company’s CMM.
(5), Auction: A single buyer has a significant amount of negotiating leverage in an acquisition. With multiple buyers we will turn this leverage in your favor to maximize the value of your company and structure a deal that is most beneficial for you and your needs.
(6), Negotiations: When negotiating the sell of your life’s work it is difficult to keep emotions from getting in the way. Buyers will often employ skilled professionals to represent them in a transaction by taking advantage of various circumstances. Our talent in representing companies will allow you to maintain a far stronger negotiating point as you approach this situation.