Maybe you are considering selling your business, but you have no idea how that is done. It is well to get in touch with an M&A advisor to help you out. They can give the details to the main steps involved. It is a complex process and one which can take 9 months to a year to complete. There is much to do in preparing the business, providing documentation, finding a buyer, making negotiations, drawing up an agreement and bringing it all to a close. The process can be divided up into 6 main steps, each of which require specialist help.
Documentation
The initial stage is documenting what your business is about. Your M&A advisors should find out all they can about your company in order to be able to present it to potential buyers. This will include the financial information, such as annual turnover, profits etc., what assets it has, both physical and intangible, the industry it is in and its strengths and weaknesses. An evaluation will also need to be made.
A blind teaser and an information memorandum is drawn up from all this information. The blind teaser will include some overview of the company, its location and history, a summary of the financial information and some of its unique selling points. This is enough to pique the interest of buyers whilst keeping the identity of the company safe. The information memorandum contains more details of the company. This is given to potential buyers who have shown an interest and have signed a non-disclosure agreement.
Finding Buyers
The next step is to find the right buyers. Analysis should be carried out to determine what sort of buyers will benefit most from the acquisition. The net should then be cast worldwide with a focus on those companies and investors. Presentation should be made in the form of the blind teaser. The most suitable buyers should then be selected from those who show an interest.
Promotion
Non-disclosure agreements are signed with those companies and investors most interested and deemed suitable. Interchange of information proceeds and the best candidates are chosen. A virtual data room can be set up to exchange documents and negotiations can proceed. These usually start out with a letter of intent from the buyer.
Negotiations
Offers are negotiated and re-negotiated. Terms of the agreement are drawn up with the selected candidate. This can be a long process and much attention needs to be paid to detail, so that there are no problems later. At the end there needs to be an agreement of intentions that satisfies both parties.
Due Diligence
It is now time for due diligence. This is an examination of the financial records in detail. A buyer will not want to leave any stone unturned in making sure they know what they are buying. They want be sure that there is nothing being covered up. This process works best when there is good cooperation by the seller to provide requested documents promptly.
Closure
If all goes well with due diligence the final offer can be signed and sealed. If due diligence uncovers concerns then the offer may need to be renegotiated. When there is a final offer agreed by both parties, then closure can take place. Transfer of ownership is ready to go ahead.
If it all still seems confusing, there is no need to worry. M&A advisors can guide you through the whole process step by step. They can guide you in the preparation of documents, source the right buyers and handle all the negotiations.
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