FINDING A BUYER FOR YOUR COMPANY

THE BUSINESS

  • What is the current and future nature of the company’s business? At the strategic, operational, legal and financial level?
  • Does the business need a capital injection in order to ensure future success? If so, what are the uses of funds and over what time period will the funds be spent?
  • Is the company’s project fixed and stable? Are there elements of it which may change in the future?
  • What are the key risks that could have a significant impact on the company and its project? Do these impact the company’s financial forecasts? Do they impact the cash flow forecasts?
  • Are there key people who need to remain within the company to ensure a smooth transition? For how long?

THE ACQUIRERS

  • On the basis of the company’s country and industry sector, what investors are most likely to acquire the company? Financial investors? Strategic or industrial buyers?
  • On the basis of the proposed transaction, who are the most likely buyers?
  • On the basis of the price and valuation, who are the most likely buyers? N.B. A typical search yields 15-potential buyers per transaction.
  • Within this group, who are the buyers who best match the seller’s objectives?
  • Which are the buyers that can best contribute to the future of the company? ? For example, by contributing know-how, industry contacts, technical knowledge, human resources, etc.

WHAT IS THE SELLER ASKING? WHAT IS THE SELLER OFFERING?

  • What is the asking price for the business? What metrics underpin this price? How was this price arrived at?
  • What is the valuation of the company? Is it different from the price? If so, why?
  • If less than 100% of the share capital of the company is being sold, what percentage of the company is offered in exchange for the price asked?
  • Does the asking price or valuation change if the deal involves a minority stake vs. majority stake? Is there a control premium?
  • What is the expected return for the acquirer? IRR? Payback?
  • Is the seller willing to accept “earn-out” payments?

THE PROCESS

  • What is the best way of structuring a process to identify the best acquirer for the company, or the one likely to pay the highest price?
  • What is the dynamic of the agreement that the seller and acquirer must reach in order to protect its interests / optimize the selling price?
  • What documentation needs to be provided when, in which part of the process and how can confidential information best be protected?
  • At what point in the process should an investor be given exclusivity and how?