Achieve the optimal combination of valuation, structure and fit given the seller's unique characteristics.

SELLERS

RESEARCH

• Understand the industry and the forces that shape it
• Identify and understand the stakeholders
• Define the characteristics of the ideal acquirer
• Identify a universe of potential acquirers

PRESENT

• Present the seller in a manner that
suits the ideal purchaser
• Write one page summary or teaser
• Write Confidential Investment Memorandum
• Populate data room information

CONTACT AND QUALIFY

• Contact potential acquirers
• Share one page summary
• Qualify potential acquirers

Establish Confidentiality

• Execute non-disclosure agreements

Share Information 1

• Confidential Information Memorandum
• Initial data room access

Coordinate and Negotiate

• Collect indications of interest
• Negotiate valuation and structure
• Execute Letter of Intent

Share Information 2

• Expand data room access

Document

• Negotiate definitive purchase agreement
• Negotiate ancillary documents
• Prepare schedule

CLOSE

VALUATION

Valuation is affected by a variety of factors. Depending on the prevailing financing environment, the asset base can be a factor. In a transaction where the buyer is using leverage (borrowing a portion of the purchase price), a high asset base can increase the debt financing available, the returns to the equity and, thereby, the valuation.

Valuation Enhancement Factors

  • Strong management team willing to stay on
  • Growth
  • High and stable gross and operating profit margins
  • Lack of capital intensity
  • Defensible market position
  • Strong brand
  • Attractive industry fundamentals
  • High barriers to industry entry
  • Broad customer and supplier bases
  • Proprietary technology, processes and/or patents
  • Audited financial statements
  • Limited and straightforward adjustments to financial information
  • Clear and quantifiable synergies with buyer

Valuation Degradation Factors

  • Weak management team
  • Declining revenue
  • Low and volatile or declining gross and operating profit margins
  • Capital intensity (working capital and or capital expenditures
  • Poor market position
  • Weak brand
  • Poor industry fundamentals
  • Limited barriers to industry entry
  • Concentration with customers and/or suppliers
  • Limited proprietary characteristics
  • Non-audited financials
  • Extensive and complex adjustments to financial information
  • Lack of synergies with buyer