helping entrepreneurs create, build and realise value

Selling your business

Selling your business is likely to be one of the most important decisions you will ever take, and could be a one time only opportunity to create substantial value.  Our role is to assist you in successfully concluding an exit on the best available terms.

There are many critical steps in the process starting with assessing the market appetite for your business and understanding potential exit values and the motives of strategic buyers to buy. Our sale process follows a set of discrete steps, which are designed to elicit the strongest possible offer for your business. Experience tells us that focusing on the things that matter; effective planning, smart research, presenting the opportunity the buyer is looking for, and anticipating issues leads to a successful transaction.

All this is overlain with a huge dose of experience and knowing what to do and who to talk with to unlock opportunities.

Key StepsDetail of processComments

Step 1

Understand the opportunity

  • Stakeholder aspirations
  • Strategic options
  • Initial (high level) value expectations
  • The strategy, business model and performance - previous, now and future
  • Value drivers
  • The competitive and customer landscape
  • The “obvious” value inhibitors (“Due diligence/key risks radar”)
  • Consider any other exit planning that may be required

We appreciate you are very busy and our role is to allow you to stay focused on the business but we will need:

• To meet with you to discuss all aspects of the business. This would normally take a day.

Step 2

Potential Purchaser Review – assess market appetite

  • Research the market
  • On radar
    • The main CF databases (Corpfin, MergerMarket etc)
    • Desk research
    • The Management team’s knowledge
  • Below radar
    • VC/PE network
    • Corporate Finance advisors collaboration
    • Other influencers
    • Relevant M&A Directors and CEOs
    • International network

Wherever possible we seek to make personal contact with the decision maker. We want to know what is “hot”, what is “not”, who is acquiring and where do they see value i.e. seeking to understand each buyer groups’ strategic premium

We produce and agree with you a simple one page descriptor/script of how we portray the anonymous opportunity to the outside world to ensure confidentiality (at this stage there is no link to you whatsoever)

We produce a detailed but pragmatic report that we continually add to (our “intelligence bible”)

Step 3

Stop, review, assess, agree next steps

  • Agree valuation aspirations and reconfirm that the stakeholders are aligned in their expectations
  • Agree buyer groups, related strategic premium messages and the priority of targeting – shortlist of purchasers to approach

 

Step 4

Prepare for sale

 

  • Teaser (the one page selling document) to be drafted
  • Information memorandum (IM) to be drafted
  • (Both documents to be able to be tailored depending on buyer group needs)

We do not believe in long documents.  These are selling documents designed to get interest quickly.  Less is more when decision makers read these documents.

We also will want to make sure the company is “clean” so will initiate our own “internal due diligence”:

  • Governance & compliance up to date
  • Accurate and timely management accounts
  • Sensible accounting polices
  • All other key financials verified – cashflows, pipeline, customer stats etc

Step 5

Start talking – marketing the business

  • Shortlist of buyers approached
  • Initial “suitability” discussion (with buyer and then with you)
  • Confidentiality Agreements (NDAs) signed
  • IMs released
  • Buyers confirm interest
  • Arrange meetings with agreed buyers (neutral territory)
  • Assess seriousness
  • Try to avoid additional information going to them at this stage (can’t avoid entirely)
  • Never mention valuation expectation

We maintain a “contact control spreadsheet” that we update daily/weekly and review this with you as often as required

Step 6

Receive offers

  • Give buyers the format of offer (they may not stick to this!)
  • Ask for written offer
  • Clarify the terms and firm up as much as possible
  • Agree Heads of Terms

The key to a deal happening is “deliverability” rather than valuation or structure.  You might receive a huge offer with a significant and unacceptable earn out period.  We agree with you what you will and what you won’t accept (the buyers will not know this)

Always involve tax and legal advisors at this stage

Step 7

Manage due diligence process

  • We would prepare a “data room” for buyers to conduct due diligence over a limited period.  We would manage the data room process

We will keep very close to the purchasers corporate finance team.  All communication goes through us

Step 8

Final negotiation

  • Final negotiations managed to as tight a timetable as possible
  • Seek a Sales & Purchase Agreement
  • Legal completion

We will work very closely with your lawyer and tax advisor (we are happy to introduce you to and agree terms with appropriate professional  firms if needed)

We always sign off all legal documents (we will have widest knowledge of all aspects of the deal)

"We engaged late in the year to help with disposal of our privately owned business. By early April we had successfully disposed of our small private business to a FTSE 100 company. The result exceeded all the shareholders expectations. James Heywood was a key person in the whole process delivering both technically and personally to us. Good communication, ability to deliver to tight deadlines and a great team player." Director, Oil and Gas Services sector. Transaction size £20m