Step 1 - Determination of Proper Pricing Strategies
BDSA will provide the client with an analysis of the proper pricing strategy for the company in today's marketplace. Considerations influencing that value include whether the client is looking for all cash or is flexible on terms and conditions, what percentage of the company is being sold, an understanding of the future prospects of the business, and how active foreign buyers will be in the process.
Step 2- Preparing the Company For Sale
An analysis of what needs to be done prior to meeting the buyers will be provided to the client. Recommendations could be as simple as taking out the paintbrush or may involve buying a needed piece of equipment, for example.
Step 3 - Writing the Confidential Memorandum
The confidential memorandum that is written by BDSA is similar to a prospectus used for a new public offering. It contains an accurate and complete picture of the entire operation including a description of the business, past and future financial statements, and various informative exhibits. The memorandum highlights the strengths while putting the weaknesses in proper perspective.
Step 4 - Selecting the Buyers
The BDSA database consists of more than 200,000 worldwide potential buyers. The first step in buyer selection is deciding which acquirors should be contacted and provided only with sufficient information to allow a preliminary determination of interest. They are not told the identity of the seller. Interested acquirors are evaluated on their ability to complete the acquisition. The most serious buyers are provided with the confidential memorandum and other pertinent information. It is important to generate a competitive environment where several offers are being made from a variety of buyers. This allows the seller to make the best decision and receive the highest value for his company.
Step 5 - Letter of Intent, Purchase Agreements, and Due Diligence Process
Once the client has decided which offer is preferred, a letter of intent is negotiated. The letter of intent outlines the terms under which the parties plan to consummate the transaction. It is usually non binding, however, many items negotiated in the letter of intent find their way to the purchase agreement. The attorneys draft the purchase agreement. BDSA works closely with them to ensure that the client's interests are represented to the fullest extent. Concurrent with the negotiation of the purchase agreement, the due diligence process begins and involves both the buyer and the seller. This is the time for the owner/CEO to ask questions and request any additional information in order to become comfortable with the acquiror.
Step 6 - Closing the Transaction
The closing process usually takes longer than is expected. BDSA frequently provides suggestions to the attorneys on solutions to problems that may arise to ensure that the transaction closes.
Do you have questions about selling your company? Are you wondering if this is the right time to sell? Bruce D. Schulman & Associates can answer your questions with no obligation to you. Please contact Bruce Schulman at Bruce@SchulmanCapital.com