All too often the M&A process is handled differently depending on who works it – catch as catch can! For the most important transaction of your life you deserve better. You need a global search process for that partner that will give you maximum price, optimum structure, minimal taxes, fair employment/non-compete, minimal liability, and an integration plan that takes care of employees. The right outcome. To do it right, you need a professional detailed process that leaves no stone unturned, and creates and auction environment for maximum success. Based on selling more tech companies than anyone in history over the lasts three decades, Corum has developed the “8 Stages For An Optimal Outcome” to help you.
Put yourself in the shoes of the buyer. What will they want? Do you have a business plan? Initial valuation expectations? Are your financials in order? Are your projections believable? Are you ready for the data room? Be ready to answer buyer questions.
Who do you go to – what are the classes of buyers? Who are the decision influencers? Where do you stand relative to competitors? What is their process? These are the questions you need to address before making first buyer contact.
What’s your message to each partner? Who do you contact? What NDA’s are needed? What is their process you have to adhere too? Who are the gatekeepers you need to get around? Get off on the right foot by knowing the answer to these questions.
How serious is this buyer? Are you sure they can do the deal? Is the fit one you want? What are their preferred deal structures? Are they interested in us? This is where they do the first level of due diligence to be able to make an offer.
What is the valuation? What makes the first offer? Who drafts the documents, controls the LOI? How do we control the due diligence? How do we stage an auction? This is perhaps the most critical stage, the one where you get the deal in place.
Do you have a data room established? What are the various levels of due diligence? How far can they go in their questions? Who do you use for the definitive agreement? Outside Opinions? This is where deals die – good preparation is the key.
What are “Final Reps and Warranties”? How about escrows, holdbacks? How do you handle payment? Distribution? What regulatory hurdles are there? What are the gotchas that come up at the last minute? Be sure to minimize post-closing events.
What kind of planning is needed? How do you determine synergies? Best practices? What can we do to retain employees? Who handles the transition? How do we set up monitoring and/reporting? You don’t want to be one of the 53% of deals that fail.
There’s an old adage that “you don’t know what you don’t know”. Selling your own company is not the place to be learning what you don’t know. Good preparation, following these eight steps will help you secure the transaction you deserve.