Our Process - The Buy Process
1. Understand the context
Prior to actually signing a contract to represent a Buyer, we first meet with the potential Client (one or more times), communicate via voice and email and perform our own research, all to consider the Client's business, goals and expectations for a purchase. It is vital that we understand the "context" or the interrelated conditions that are motivating the buyer and that as a result we can understand what the buyer is trying to achieve and how it fits within their overall business strategy.
2. Clear and Agreed Upon Goals
Once we have a thorough understanding of the Buyer's context, we work with the client to define objectives for the purchase. These are defined in terms of potential targets, valuation, timeframe and fit with the client's business and strategy is clearly defined within their organisation.
3. Engage the Project
Having completed the first two steps of understanding the context and the agreed upon goals of the purchase, we then proceed to formally entering into a written agreement with the Buyer.
4. Identity Acquisition Targets
Once the project is engaged, we immediately develop a thorough list of potential acquisition targets. We build this list from our own database and research as well as from information supplied by the Client. This list can include standalone companies or divisions/business units of larger corporations.
5. Narrow to a "Short List"
Once the list of potential targets is developed, we then begin the process of narrowing this down to the "Short-List" of viable candidates. We do this by contacting each potential target in some way to ascertain the "potential to buy" of the company, or division. During this process we further screen the target using the agreed upon goals set within the Buyer at the beginning of the engagement.
The Short-list will include only those who have been qualified through the screening process and who have indicated a true interest in being acquired. We do reveal the identity of the Buyer during this process, under Confidentiality Agreement, as this is key to confirming true interest on the part of the target being acquired.
6. Negotiate best Economic Return
Working with the Short-list of potential buyer, we negotiate on the Buyer's behalf the best economic return for their investment. The best economic return is not only a function of price, but also of payment terms (cash, stock, seller financed debt, earnout or combinations of these payment methods) and also of other terms of the purchase including warranties, liabilities assumed (or not assumed) timeframe of completion, ability to integrate into Buyer's operation and business and many other considerations. Many of these criteria can be extremely important to the true economic return the Buyer will realise and thus will ultimately be the determinant of a successful transaction. The best price does not always mean the best economic return for the investor (Buyer). The overriding objective of the process is to complete a transaction that fulfills the goals of the Buyer with the best economic return for their investment.
7. Integration Planning (an optional service)
In addition to negotiating the transaction with and on behalf of the Buyer, we can also assist the Buyer with their Integration Planning process. Successful integration of an acquisition is perhaps second in importance to the buying process only to choosing the correct acquisition target. Successful integration is the key to a successful acquisition. A perfectly executed acquisition process will still not result in a successful acquisition unless there is a correspondingly successful integration of the target into the operations of the Buyer.
Due to our experience as both successful operating managers and as successful M&A advisors, we understand the vital importance of integration planning and execution. One of the valuable services we can offer to the Buyer (and indirectly to the Seller as well) is advise in the Integration Planning process. Ultimately, it's the responsibility of the Buyer to develop a proper integration plan to execute it. However, we work with our clients to ensure that proper integration planning is addressed BEFORE the transaction is completed and we offer the benefit of our experience and advice. This optional service can be provided at an additional cost to the Buyer.8. Complete Contract
Once the price and terms are completed, typically using a detailed Term Sheet or Heads of Agreement, and the probability of close is confirmed, the completion of the detailed purchase contract and the closing (transfer of funds and title) transaction is the final step in the process. This can be a time consuming and extremely detailed step and one in which we have extensive experience. This step in the process is in many ways the most important and delicate as it is truly the final step and often the hardest to navigate with attorneys, accountants, advisers and many other participants involved. We are very experienced in managing this process and in dealing allying any concerns that arise during this critical time.
9. Post Transaction Review
Upon completion of the Sale Process we conduct a Post Transaction Review with our client to solicit their feedback on how we performed the project including what went well and what could have gone better.