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Market the deal

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Daniel Bruellmann
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Selling a business — Part III:

We can mar­ket the deal after prepar­ing the busi­ness for sale. We shall bring the oppor­tu­ni­ty to the mar­ket main­tain­ing con­trol of the process and the dis­tri­b­u­tion of infor­ma­tion, while moti­vat­ing bid­ders along par­al­lel paths on a lev­el play­ing field in case of a broad or restrict­ed auc­tion, or even lim­it­ing it to an indi­vid­ual process, accord­ing to your requirements.


Even if flex­i­bil­i­ty and readi­ness to amend process and papers is nec­es­sary, a dis­ci­plined approach requires best pos­si­ble prepa­ra­tion and exclu­sive rep­re­sen­ta­tion. Any com­pro­mise on such ini­tial deci­sions is a trade-off pos­si­bly affect­ing the out­come for the seller.

The normal procedure to market the deal is to:
  • Con­tact buy­ers with a reduced but strong no-name sum­ma­ry focused on strate­gic and quan­ti­ta­tive key ele­ments. Spe­cial­ized data banks are gain­ing impor­tance to expand reach and com­pe­ti­tion beyond the spe­cif­ic researched buy­ers list.
  • Agree con­fi­den­tial­i­ty (also referred as NDA, CU, NCND).
  • Deliv­er the detailed Offer­ing Mem­o­ran­dum (also IM, CIM)
  • Fol­low up, com­plete infor­ma­tion, arrange inter­ac­tion with man­age­ment. The bet­ter the Offer­ing Mem­o­ran­dum, the less­er the man­age­ment dis­trac­tions, delays and dif­fer­ence in prospect buy­ers’ treat­ment. At this point there might still be many par­ties inter­est­ed in receiv­ing information.
  • Receive non-bind­ing indi­ca­tions of inter­est. These uni­lat­er­al indi­ca­tions which are some­times referred as let­ters of intent (LOI) too, shall con­tain infor­ma­tion about the real inter­est, fit and abil­i­ty to exe­cute the transaction.

In the mean­time, inputs from buy­ers’ inquiries and from indi­ca­tions of inter­est help com­plete the Data Room extent and prepar­ing man­age­ment presentations.

At this point, strong­ly inter­est­ed par­ties on the short list will be grant­ed access to the Data Room, pro­ceed to face-to-face meet­ings, man­age­ment pre­sen­ta­tions, or some­times even site vis­its and be invit­ed to sub­mit final bids pos­si­bly based on a draft trans­ac­tion struc­ture or even a draft sale agree­ment, or a share pur­chase agree­ment (SPA).

Bring­ing to the mar­ket the deal, have assumed a bid­ding / auc­tion process while also eas­i­er and more con­fi­den­tial but less max­imis­ing bilat­er­al process­es with sin­gle coun­ter­par­ties are com­mon too.

More details about how to sell a com­pa­ny are approached in the next post. If you have ques­tions, con­sult us, we’ll be glad to help.