Steps To Selling
The process of selling a company will typically take between six and twelve months. All of the following steps may be required to complete the sale.
Month 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.
Month 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. For example, recommendations could be as simple as taking out the paintbrush or may involve buying a needed piece of equipment.
Month 3 - Writing the Confidential Memorandum
We are an expert in preparing a confidential memorandum that provides an accurate and complete picture of the entire operation including a description of the business, analysis of past and future financial statements, and various informative exhibits. The memorandum highlights the company's strengths while putting weaknesses in proper perspective.
Months 4-6 - Selecting the Buyers
Our database consists of more than 200,000 worldwide potential buyers. The first step in buyer selection is deciding which acquirers should be contacted and provided only with sufficient information to allow a preliminary determination of interest. Potential acquirers are pre-qualified so that the owner's time is not wasted. Initially, the name of the seller is not revealed. Interested acquirers are then 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 at the same time from a variety of buyers. This allows the seller to make the best decision and receive the highest value for the company.
Month 7 - Letter of Intent, Purchase Agreement, 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, but often many items negotiated in the letter of intent find their way into the purchase agreement. The attorneys then draft the purchase agreement. We work 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 analysis by both the buyer and the seller.
Month 8 - Closing the Transaction
The closing process will often take longer than expected. BDSA frequently provides suggestions to the attorneys on solutions to problems that may arise to ensure that the transaction closes.