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Information For Sellers
Looking
for a Buyer for your business? Our Broker members are licensed in
Real Estate, as required by the state of GA. We encourage active
participation in business sales co-brokerage for superior service to
business buyers and sellers. We will assist you with issues such as
valuing and pricing, marketing and advertising, handling prospective
buyers, negotiating and closing a deal. Confidentiality is a prime
concern in selling an on-going business. We operate under strict
procedures to protect the Seller's proprietary information and
ensure utmost confidentiality.
Consider
the valued added by a professional business broker. Brokers are the
EXPERTS in the confidential business marketing and transfer process,
just as YOU are the expert in your industry. Why not let the experts
help you:
- Determine the market value, possible strategic value and
appropriate listing price.
- Advise you as to terms and deal structures to help you keep
more profit on the sale.
- Execute the marketing and advertising plan designed for your
particular business.
- Avoid the disruptive impact of your plans becoming common
knowledge.
- Find, Screen and Qualify prospective buyers.
- Work with professional advisors on your team.
- Assist the buyer in obtaining financing.
- Negotiate profitable sale terms and deal structure.
- Assist
with all the complex details of a business closing?
Step
1: An Assessment Meeting
This initial meeting between the Seller and the prospective
Intermediary will introduce the Seller the methodology and
experience of the intermediary.
It includes a frank discussion of a potential transaction,
the Sellers expectations, motivations and goals, both personal and
professional.
Step
2: The Valuation
If
Seller and Advisor agree to proceed, the parties will decide on a
method to establish the business value.
The NPG Brokers Intermediary will collect the necessary
business and financial information in order to develop a range of
values based on their ‘Market Approach’.
For those businesses whose valuation will exceed $750,000 the
intermediary will strongly urge the Seller to perform a ‘Third
Party’ formal appraisal. You cannot sell your company for a
premium price unless you first know its true, financial value.
Step
3: Decision Point; Sell or Hold
At
this point, the Seller should have all the necessary information to
decide to move forward with Selling OR work toward improving the
business value and exit at a later time. If the decision is HOLD the
Seller should consult with the Intermediary on business improvement
planning services. If
the decision is SELL, then the Seller and Intermediary will
negotiate an Engagement Agreement, defining all fees and the terms
of payment. The Seller
must keep their focus and running the business and be mentally
prepared for a long process.
Step
4: Develop a Business Marketing Report (BMR)
The
work completed in the Valuation stage will become the basis for the
preparation of the Business Marketing Report - the official selling
document for your company. Prepared
by the Intermediary, this comprehensive document presents factors
that will add value and marketability to your company:
–
Recast financial and
Pro forma statements
–
Industry outlook and
market conditions
–
Products,
technology, patents
–
Organizational
structure
–
Reputation, history,
hidden assets
–
Potential new
business areas
Step
5: Develop a Business Marketing Summary (BMS)
The
Business Marketing Summary is a 1 to 2 page profile of the company
which includes a very short summary highlighting their market
position and other strengths; it also provides some basic financial
information (3 year sales, SDCF, EBITDA ). The profile is
‘blind’ and never discloses the identity or location of the
Company. The BMS is
used as a marketing tool to create a preliminary indication of
interest from prospective buyers.
Step 6: Develop a
Marketing Plan
This
is a critical, extremely important step where the Seller and the
Intermediary create the marketing plan to sell the company.
You will, along with the intermediary, develop a profile of
the ‘ideal Buyer’ by using professional backgrounds for
individual buyers or industry SIC code, size and geographic location
of potential corporate buyers.
Your Intermediary will use this profile to research
proprietary Buyer databases and implement tailored advertising and
direct mail to develop interest from qualified prospects.
The plan will expose the business to all types of Buyers;
individuals, private equity groups (PEGs) and strategic industry
prospects.
Step
7: Implementation of the Marketing Plan
Implementation
of the Marketing Plan will begin to generate interest from potential
Buyers. Your
Intermediary will discuss the opportunity with prospects; qualifying
them financially and strategically.
He will manage non-disclosure agreements from interested
parties and may even
request approval from the Seller prior to releasing the BMR and
business name. Seller
and Intermediary will communicate on a regular basis to update the
status of the marketing plan and the interest level of Buyer
prospects.
Step
8: Confidential
Marketing to All Respondents
Results
of the marketing plan will bring multiple, qualified buyers to the
table. Only by negotiating with several buyers under carefully
managed guidelines can you be assured of getting maximum value for
your Company. Following
the initial qualification of each prospect, approval by the Seller
and receipt of an executed NDA, the Intermediary will offer each
prospect a copy of the BMR and outline the manner in which the sales
process will be managed or the ‘rules of engagement’.
Step
9: Buyer / Seller Meetings
The
Intermediary will coordinate and facilitate meetings with
pre-qualified buyer prospects.
These meetings are
typically off-site or after hours at first, before moving to onsite,
and will begin to develop the Buyer / Seller relationship.
‘Term Sheets’ may or may not be required prior to meetings in
order to further qualify buyers and develop expectations for Seller.
Step
10: Negotiating Price,
Terms and Deal Structures
Following
the meetings between Buyers and Sellers, the Intermediary will
receive initial term sheets, verbal offers or proposed LOIs and
review them with the Seller. Various
deal structures will increase or decrease the net value of each
offer to the Seller. The
intermediary will attempt to develop a ‘Controlled Auction
Environment’ among interested parties. He will act as the buffer
in order to eliminate or reduce the Sellers emotions from the
process.
Step 11:
The Letter Of Intent (LOI)
Buyer,
Seller and Intermediary will negotiate a Letter of Intent, the
"Agreement to Agree" with the buyer of your choice. It
will spell out the basic elements of the transaction; price, terms,
contingencies and conditions. Further
marketing stops at this point while the buyer begins to perform due
diligence on the company. The
Intermediary will assist the Buyer as needed in this step to help
assure that it is done thoroughly and thoughtfully.
Typical
contingencies may include;
-
Review
and approval of all financial records to the satisfaction
of the Buyer
Negotiation of an acceptable lease
-
Negotiation
of an employment and/or non-compete agreement
-
Ability
to secure outside financing
Step
12: Financing the Deal
Depending
on the experience of the Buyer, your Intermediary may be able to
assist in obtaining the outside financing required to complete the
transaction. Most
professional intermediaries maintain close ties with both debt and
equity sources of financing including SBA lenders. Seller financing
may have been offered and agreed to in the LOI, if so the structure
and details of that portion of the financing will be finalized.
Step
13: Due Diligence
This
step involves a detailed investigation by the Buyer into your
business. Your Intermediary will act as the ‘quarterback’,
coordinating the advisors of both Buyer and Seller to insure that
this process is completed in a timely fashion and that communication
remains open to avoid any misunderstandings that could derail or
stall the deal.
Step
14: The Final Purchase
Agreement
During
this phase, all the documentation for the transaction comes together
and the Intermediary will use his experience to review the
agreements and assist in resolving any last minute differences.
These include;
–
Bill of Sale with UCC
filings
–
Non compete
agreements
–
Employment agreements
–
Corporate resolutions
–
Seller Notes
–
Loan Documents
–
Lease Agreements
–
Reps
and Warrants
Step
15: The Closing
While
this is the last step in the Selling process, this represents the
start of the transition phase for the Seller to exit the business.
It is coordinated and facilitated by the intermediary.
It should be the fulfillment of the business and personal
goals originally discussed with the Intermediary.
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