Sell-side transactions for our entrepreneurial clients may take many forms:
Selling outright to a strategic or financial buyer
Raising growth capital from a financial sponsor, such as a private equity firm
Recapitalizing to allow owners to achieve significant liquidity while continuing to run their business day-to-day and retaining potential added upside
Setting the specific goals, which take into account the personal, family and business needs of an entrepreneur-led business organization, should be done well in advance of embarking on the actual transaction process. We work with our clients to identify the best path to reaching their overall objectives.
Marketing Your Business
At Glendale Capital Partners, we choose to focus on select industries where our professionals have significant operational and/or transactional experience. As such, we have a deep understanding of both the economic forces driving these market segments and the industry participants who may be the best partner for our client’s targeted transaction outcome.
Confidentiality is always a concern of clients entering the M&A market. Depending upon your situation, we can structure our marketing process to be as limited or as broad as desired while minimizing disruption to your ongoing business. Leveraging our industry knowledge, we can either market your business to a select group of potential buyers or involve a larger pool of buyers in a controlled auction process. Together, we will craft the marketing strategy that’s right for you.
Utilizing our industry and private equity databases, we will identify prospective, qualified partners for the intended transaction and work closely with our clients to refine the target list prior to contact.
We provide our clients with a comprehensive list of information required to prepare the necessary marketing materials, as well as to obtain an idea of your company’s valuation. This information is critical to our properly positioning your business for sale and in setting expectations regarding its value in the marketplace. The marketing documents we produce from this information include:
Client Profile – this brief, confidential document contains one to two pages of high-level information about your company, including the type of transaction being considered. The Profile is provided via e-mail to prospective targets, without identifying your company’s name, to solicit initial interest.
Confidential Information Presentation (CIP) – is the primary tool used to market your business to prospects. The CIP describes your industry niche and company in detail, including its operations, achievements, competitive advantages, history, employees, customer base, management, financial results and future growth potential. The CIP is only provided to prospects following their execution of a non-disclosure agreement.
Follow-up Questions – Glendale Capital will do our best to field most of the follow-up questions posed by interested prospects during the marketing process. Where warranted, we will work with you to provide additional information and/or arrange brief conference calls with prospects to facilitate a better understanding of the business and intended transaction.
After receipt of the CIP and other requested information, each prospective buyer should have sufficient information to determine if your business is a good acquisition candidate. Now, in order to determine which prospective buyers wish to pursue the opportunity, we ask them to submit a Letter of Interest outlining a purchase price range and other material terms of a potential transaction.
In most circumstances, we receive letters from multiple prospects, which we assist our clients in analyzing and comparing. We use our industry experience and familiarity with the prospective buyers to determine each buyer’s true level of interest and ability to close the transaction on the terms proposed. We, in concert with our client, then select a limited number of qualified buyers to proceed to the next stage of the process.
Now comes the time for our client and their management team to sit down at the table with prospective buyers still in the running. The goal of these presentations is to allow both parties to get acquainted and to discuss additional details about the business. It is an important final step for both the potential buyer and the seller to determine if the transaction will be the right fit for both parties in terms of finances and alignment of interests.
This stage of the process involves presentations, facility tours and management meetings – all arranged in a manner least intrusive to your day-to-day business operations. Our knowledge of your business and its key value drivers will help us to prepare you for these presentations, tours and meetings so that you can present your company most effectively. We will be at your side throughout the entire management presentation process.
Following completion of Management Presentations, we ask each prospective buyer to submit a non-binding Letter of Intent specifying a purchase price for the business and material terms of the transaction pending the results of their due diligence investigation.
Although price is a critical factor in any offer, other factors such financing, payout terms and post-closing conditions and integration plans must also be considered and compared between prospective offers.
A buyer’s reputation and track record in prior transactions is important. For example, it may be easier to get a deal done with an experienced strategic or financial acquirer, but perhaps its rapport with your management team might not be as strong. On the other hand, a family office with a hands-off management approach might be a better fit in certain situations.
We will assist you in selecting the buyer that is right for you, all in an effort to find the best transaction partner allowing you to achieve your goals.
Due Diligence & Purchase Agreement
Once a deal in principal has been reached, the buyer will need to complete its due diligence investigation of the business. This work usually involves a buyer’s outside accounting and legal teams who will review documents, such as detailed financial statements, building and equipment leases, corporate records, customer and supplier information, etc. We help you manage this process by setting up a secure, virtual data room where such documents can be accessed electronically. Using a virtual data room can increase the efficiency of the due diligence process.
Buyer diligence usually lasts for a period of 60-90 days, during which time our client’s and the buyer’s transaction legal counsel work to craft a binding Purchase Agreement outlining the specific terms of the deal. We will work with your legal and accounting representatives to help you understand the various provisions of the Purchase Agreement. With our thorough knowledge of your business and our many years of transaction experience, we can anticipate issues that a buyer may raise during the negotiation process. We will collaborate with you to develop solutions before they arise, giving you the advantage during negotiations and protecting the material terms of your agreement.
We continue to work with our clients through the final closing date and make sure that any post-closing adjustments or issues are fully resolved to their satisfaction.