M & A Advisory

Business Sale Advisory

Ameridan has completed sales of privately-held companies ranging from $3 million to over $110 million in transaction value. This success has been achieved utilizing a fastidiously confidential, targeted approach, customized to meet individual client’s objectives.

Most investment banks and business brokers use a remarkably generic process for all assignments. The process usually involves the drafting of a generic offering memorandum which is distributed to a large number of potential acquirers. At its core, the process is an auction to the highest bidder. The model works for the bankers/brokers because it is the easiest and fastest way to get a deal done. And just as importantly for them, if it doesn’t quite work out, they can quickly pivot to the next potential deal.

However, this is oftentimes not the best approach for the business owner. First, potential acquirers quickly realize that the business is being aggressively “shopped.” In some circumstances, this impression in the marketplace can seriously undermine the ability to negotiate a truly value-maximizing transaction. Second, the nature of the process almost guarantees that confidentiality will be breached, undermining both short term and longer term value. Third, these processes are run at a point in time with little effort, time, or consideration given to truly communicating the company’s unique value to each potential acquirer.

A Quiet, Focused Approach

Oftentimes, a quieter, more focused approach can achieve better results. Ameridan professionals have the transaction experience and deep market knowledge to effect a successful, value-maximizing sale without “shopping the company.” The keys to this approach are:

Understanding the value drivers in the industry and identifying a select group of potential acquirers that represent the best fit for the client company;

Professionally communicating with these selected potential acquirers in a way that allows them to truly appreciate the attractiveness and value of the company;

Carefully orchestrating the process in a way that maximizes negotiating leverage.

Ameridan’s business sale advisory services span initiation through transaction structuring and closing:

1Preparing the Business
The process starts with an in-depth review of the client company’s strategy, competitive position, financial condition, and other factors that distinguish it in the marketplace. Based on this review, Ameridan provides guidance on current valuation and strategies to increase value.
2Identification of Screening of Potential Acquirers
Ameridan identifies the strategic buyers and private equity groups that have a demonstrable interest in acquiring the company. In many cases, potential acquirers include both domestic and international entities. Ameridan assesses each potential buyer’s acquisition history and strategy, as well as financial position and ability to pay a significant premium. The key is to enter into discussions with a limited number of serious, well-financed parties.
3Preparation of Confidential Information
Under client direction, Ameridan prepares, presents, and manages all confidential information provided to potential acquirers. Ameridan prepares a series of customized packages of information for each potential acquirer, taking into consideration the stage of the discussions as well as the potential acquirer’s competitive position relative to the client company.
4Presentations to Key Potential Acquirers
We communicate with each potential acquirer’s key decision-makers, presenting the company’s unique capabilities, competitive advantages and financial performance.
5Evaluation of Purchase Proposals
Ameridan assesses each purchase proposal relative to the client’s strategic and financial objectives. Each proposal is also assessed in light of past transactions in the industry, and previous transactions consummated by each potential acquirer.
6Closing
Ameridan assists the client’s legal counsel as needed to ensure; (1) all documents accurately reflect the deal that was negotiated; and (2) the closing is executed properly and expeditiously.
1Can I assess the viability of selling my company without putting the company up for sale?
Yes, definitely.   Ameridan helps clients assess the viability of a potential sale in two ways. First, time is spent understanding the company’s position in the marketplace, its strengths & weaknesses, its financial performance, and other key issues. In most cases,  based on our knowledge of major acquirer’s parameters, we can give clients a good idea of whether the company would be an attractive acquisition candidate and if so, an estimate of the proceeds likely to be received in a sale.
2If I decide to engage Ameridan in the sale of my business, how would the process work? How long does it take?
Ameridan works closely with you and your other professional advisors.  We run a customized process that maintains confidentiality, is appropriate for your situation, and results in a transaction that meets your objectives. Ameridan  manages the overall process, subject to your  approval at various steps along the way.  Although each client engagement is unique, a business sale typically requires 6-9 months.
3Why not simply use my attorney and/or accountant?

If you decide to pursue a sale of your company, you definitely will need the services of both your accountant and your attorney. However, even the best attorneys and accountants lack the industry specific M&A knowledge and networks that Ameridan brings to the table.

Just a few examples: Does your attorney /accountant know the active strategic acquirers and private equity groups  in your industry? Do they know which would be the best fit? Do they know how recent M&A transactions in your industry were structured and valued? Do they know the key industry-specific drivers of value appropriate for your business? Do they have the ability to communicate  your company’s unique value in a way that is meaningful to potential acquirers?

Of course not. It’s not their business. These types of questions are best addressed by having a professional on your team who focuses on these issues.

4Who, within my company, needs to be informed of the process?
It depends. If you are very active in the business and you plan on remaining for a year or more after the sale, only you and your accountant need to be involved in the early stages.  If you are not actively managing your company, the key manager(s) will need to be brought into the process early on. In most cases,  Ameridan recommends that knowledge of a potential transaction be very limited until a definitive agreement is signed. After that, the more communication the better.
5What are the most important issues in completing a successful transaction?

The key is to manage the process in a way that  (1) has integrity and maintains confidentiality; (2)  accesses key decision-makers  at potential acquirers and leverages their participation in an intelligent way; and (3) maintains focus on the true objectives of the client.

In addition, seemingly  small issues like the ones below can have a tremendous effect on the likelihood of a successful transaction:

  • The ways in which company information is managed and presented.
  • Which potential acquirers are approached and how they are approached.
  • The timing and sequencing of bringing potential acquirers into the process.
  • The quality of owner/management presentations to potential acquirers.
  • The orchestration of site visits.
  • Preparations made for due-diligence and how the due-diligence process is managed.