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Trust the process

 Perform due diligence:

  • Submit questionnaire and document request list

  • Meet with principals on-site

  • Review financial, business, and legal documents

 Prepare a confidential descriptive memorandum:

  • Business description (history, products and services, sourcing/production/development, sales, marketing, operations, systems, management, etc.)

  • Development potential

  • Industry and competition

  • Historical and projected financial performance, including pro forma adjustments for non-recurring items

 Estimate a fair market value range:

  • Analyze the company's historical performance relative to other entities in similar businesses

  • Perform various discounted cash flow analyses of projected financial results

  • Study market values of comparable public entities

  • Analyze recent acquisitions of comparable companies

 Develop a marketing strategy:

  • Size and scope of buyer universe

  • Asking price versus price solicitation

  • Auction versus negotiated transaction

 Prepare a potential buyer list:

  • Screen and identify potential candidates, using both public and proprietary sources

  • Include:

    • Both "financial" buyers and investors and "strategic" (synergistic) buyers

    • Industry participants seeking to execute a consolidation strategy

    • Domestic or foreign enities capable of paying a premium price to develop or expand an entrée into the company’s markets or the U.S., respectively

    • Providers of complementary products and services to the same customer base in order to create cross-marketing and sales opportunities

  • Submit a list of a limited number of "best buyers" with a reputation for serious, timely, and confidential negotiations

  • Establish with the client's approval which potential acquirers should be approached

 Initiate contact with approved buyer candidates:

  • Contact by telephone or meeting (i.e., not by a blast e-mail)

  • Make a "no-names" pitch tailored to the specific characteristics and acquisition criteria of the prospect

  • Evaluate the seriousness of interested parties

  • Secure signed confidentiality agreements from seriously interested and qualified parties (prior to identifying the client by name)

 Develop and evaluate buyer prospects' interests:

  • Upon receipt of the signed confidentiality agreement, send a confidential descriptive memorandum

  • Address concerns and capitalize on positive perceptions

  • Answer questions and fulfill certain information requests

 Maintain an ongoing buyer contact report, showing:

  • Description of the buyer candidate

  • Information sent

  • Highlights of all material conversations and meetings in order to:

    • Maximize client information flow and minimize client time commitment

    • Note positive and negative feedback to use in negotiations and at meetings

    • Allow the interchange of parties in contact with the prospect

 Solicit initial indications of interest:

  • Interest level

  • Preliminary price range

  • Material terms and conditions

  • Financial capabilities, if appropriate

 Prepare company management for meetings:

  • Develop a multimedia or flip chart presentation

  • Submit a list of suggestions/tips

  • Suggest questions to be asked of visitors

  • Furnish a list of questions anticipated to be asked by buyer candidates

  • Conduct a dry run rehearsal of key issues

 Arrange and attend buyer meetings:

  • Schedule meetings

  • Obtain buyer information for the client to review

  • Attend and orchestrate meetings

 Solicit and negotiate firm bids:

  • Fulfill information requests and assist in the buyer candidate's due diligence process

  • Obtain, evaluate, and negotiate investment terms, including:

    • consideration

    • representations and warranties

    • timing

    • tax issues

    • structure

    • employment/consulting arrangements

    • terms

    • definitive purchase agreement language

  • Develop judgments as to the relative values and financial implications to the company and its shareholders of any proposed transaction

  • Select a buyer

 Close the transaction:

  • Assist the company's attorneys and accountants in the legal and accounting due diligence process and contract negotiations

  • Review and comment on material transaction agreements

  • Expedite the closing process

  • Negotiate and close the transaction

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