M&A – Criteria and timeline

Selling a business — Part I:

The time­line sell­ing a busi­ness and the cri­te­ria to achieve best results influ­ence your deci­sion to sell your com­pa­ny or parts of it.  Sell­ing your com­pa­ny is often an emo­tion­al­ly charged once in a life­time deci­sion. You will ben­e­fit from hav­ing a pro­fes­sion­al along­side you that man­ages the process and does the work leav­ing emo­tions aside.The process includes a few impor­tant steps, which should be fol­lowed to opti­mise chances for a suc­cess­ful trans­ac­tion, meet­ing objec­tives such as to: 

• Max­i­mize val­ue for the seller
• Meet strate­gic restrictions
• Main­tain busi­ness value
• Keep process under control
• Do not over­bur­den management
• Do not dis­rupt operations
• Main­tain employment
• Retain key persons

Pro­fes­sion­al sup­port helps defin­ing real­is­tic terms and adds nec­es­sary resources to your man­age­ment, accoun­tants, tax pro­fes­sion­als and lawyers to mas­ter the process. Such sup­port is typ­i­cal­ly pro­vid­ed by invest­ment banks, M&A advis­ers and busi­ness bro­kers. They can help you prepar­ing the com­pa­ny for sale, under­stand­ing the effec­tive val­ue of the busi­ness or its assets, high­light the most valu­able aspects, access buy­ers, gen­er­ate par­al­lel com­pe­ti­tion, flex­i­bly design an ade­quate trans­ac­tion struc­ture and min­i­mize oper­a­tive dis­rup­tions and delays antic­i­pat­ing due dili­gence and val­u­a­tion issues. Bring­ing resources, rig­or and pro­fes­sion­al exper­tise to the process doesn’t come free, and, as usu­al, you will get what you pay for. The final sale result depends on how the whole process is man­aged.Once you man­date an M&A advis­er, you will gen­er­al­ly have a few inten­sive months before exe­cut­ing the trans­ac­tion.

Timeline selling a business:

1. Prepar­ing the busi­ness for sale — can be very swift, if the busi­ness is trans­par­ent­ly struc­tured and doc­u­ment­ed or take quite long if it isn’t.
2. Mar­ket­ing the busi­ness — might take a few weeks, depend­ing also on the strat­e­gy and the avail­abil­i­ty of buyers.
3. Select­ing indi­ca­tions of inter­est and fol­low­ing up with data and meet­ings — might take some weeks, depend­ing from the qual­i­ty of infor­ma­tion and avail­abil­i­ty of buyers.
4. Gen­er­at­ing com­pe­ti­tion through such as a struc­tured auc­tion to receive bind­ing bids and draft­ing the trans­ac­tion struc­ture — can be very swift, once buy­ers have been sat­is­fac­to­ri­ly informed.
5. Mas­ter­ing due dili­gence, final nego­ti­a­tion and clos­ing — might take weeks to months, depend­ing from its com­plex­i­ty and data quality.

Delays to the expect­ed time­line sell­ing a busi­ness are rel­a­tive to the cho­sen set­up, if days become weeks, weeks can become months. Hic­cups lurk at each step, espe­cial­ly if the ini­tial prepa­ra­tion is not accu­rate. We will have a look at them sep­a­rate­ly. Of course, some short­cuts can make sense in cer­tain cas­es, but the prin­ci­ples should apply to most cas­es, includ­ing to the sell­ing of major prop­er­ties.

Arranger helps you to => get Attention => create Attraction => pass Analysis => execute Agreements

More thoughts about how to sell a com­pa­ny will fol­low. If you have ques­tions, con­sult us, we’ll be glad to help.