Sell-side advisory for owners of established businesses
Most owners sell a company once. We manage a confidential, structured process so that you can continue running the business while we prepare it for market, qualify buyers and negotiate terms on your behalf.
Six stages from first conversation to closing
The particulars vary with every company, but a well-run sale follows a consistent sequence. Each stage produces specific work product that carries the process forward.
- One advisor accountable for your engagement from start to finish
- Your approval of every buyer before your identity is disclosed
- 1
Valuation
We recast three years of financial statements, normalize EBITDA for owner compensation, discretionary and nonrecurring expenses, and evaluate the risks a buyer will price. You receive a supportable value range and the factors most likely to improve it.
Value rangeNormalized EBITDAStart here - 2
Preparation
We assemble the documents a buyer will request, prepare the confidential information memorandum and a blind teaser, and organize the data room. Issues that would surface in a buyer’s quality of earnings review are identified and, where possible, addressed in advance.
Information memorandumBlind teaserData roomBefore marketing begins - 3
Confidential marketing
We define the buyer universe, including strategic acquirers, private equity groups and qualified individuals, and approach it under a project name. The company’s name, location and personnel are not disclosed in marketing materials.
Buyer universeProject name marketingOngoing - 4
Buyer qualification
Each buyer signs an NDA and provides information on its background, acquisition criteria and capacity to finance a transaction before receiving identifying information. You meet only with buyers who are in a position to close.
Signed NDAsBuyer profilesManagement meetingsOngoing - 5
Offers, LOI and diligence
We compare offers on value, structure and certainty of close, including cash at closing, seller notes, earnouts and the working capital peg, and negotiate the letter of intent and exclusivity period. Diligence is then managed through a secure data room so that buyer requests are answered promptly and completely.
Offer comparisonSigned LOIManaged diligenceAfter an offer is accepted - 6
Closing and transition
We work with your attorney, your CPA and the buyer’s lender to finalize the purchase agreement and fund the transaction, and we help structure transition services that protect employees and customer relationships.
Purchase agreementClosingTransition planClosing day
Engagement begins with a confidential conversation
Engagement terms are discussed privately after an initial conversation, once we understand the business, your objectives and your timing. Scope and terms are documented in writing before any work begins.
- Confidential from the first callInformation you share remains with our team unless you authorize its release.
- No obligationAn initial valuation conversation carries no commitment to engage us.
A controlled process protects the business while it is for sale
Employees, customers and suppliers rely on continuity. Premature news of a sale can unsettle each of those relationships at the point when buyers are evaluating the company’s performance most closely, which is why confidentiality governs every stage of our process.
What premature disclosure can cost
How we maintain confidentiality
- Blind marketing. Materials refer to a project name and disguise the location and other identifying details.
- NDA first. Every buyer signs our mutual NDA before the company is identified.
- Qualified buyers. Buyers document their experience and financial capacity before receiving confidential information.
- Staged disclosure. Customer lists, tax returns and proprietary information are released late in the process, and only as required.
- No contact with your organization. Before closing, buyers communicate with you and with us, not with employees, customers or suppliers.
- Planning for key employees. We help determine when to inform key people and how to retain them through the transition.
Questions owners commonly raise
What is my business worth?
A business is worth what a qualified buyer will pay for it, and that figure is driven principally by normalized earnings and the risk a buyer attaches to them. We recast your financial statements, compare the business with relevant market evidence and provide a supportable range, together with the factors most likely to move it.
Why engage an M&A advisor rather than sell independently?
A sale process places substantial demands on an owner’s time at the same moment the business needs to perform. An advisor prepares the company for market, defines and approaches the buyer universe, qualifies buyers and manages negotiation and diligence, which allows you to remain focused on operations. A competitive, well-documented process also gives you a clearer basis for comparing offers on value, structure and certainty of close.
How are engagement terms set?
Engagement terms are discussed privately after an initial confidential conversation, once we understand the business and your objectives. Scope and terms are documented in writing before any work begins.
Will my employees or customers find out?
Not through us. The business is marketed under a project name, every buyer signs an NDA and is qualified before learning its identity, and buyers are not permitted to contact employees, customers or suppliers. When the time comes to inform key employees, we help you plan the timing and the message.
What is the difference between Main Street and lower middle market?
There is no formal definition. We generally regard businesses valued under $2 million as Main Street and those above $2 million as lower middle market. Main Street transactions more often involve individual buyers and asset purchases, frequently with SBA financing. Lower middle market companies attract private equity groups, strategic acquirers and buyers from outside the region, and transaction structures are typically more involved, often including seller notes, earnouts or rollover equity.
What is a confidential information memorandum?
The confidential information memorandum is the principal marketing document for the business. It presents the company’s history, operations, customers, workforce and recast financial performance, and it is provided only to buyers who have signed an NDA and been qualified.
What is a quality of earnings review?
A quality of earnings review is an independent analysis, usually engaged by the buyer or its lender in larger transactions, that tests whether reported earnings are accurate and sustainable. Sellers who have prepared clean, reconciled financial statements and documented their adjustments are in a much stronger position when that review takes place.
What is a working capital peg?
Most purchase agreements assume the business will be delivered with a normal level of working capital. The peg is that agreed target, and the purchase price is adjusted at closing if actual working capital falls above or below it. Because it bears directly on the proceeds you receive, it should be negotiated carefully at the letter of intent stage.
How long does a sale usually take?
Timing depends on the size and complexity of the business, the condition of its financial records and the buyer’s financing. Thorough preparation is the most reliable way to shorten the process. After an initial conversation we can give you a realistic view of timing for your situation.
Request a confidential valuation
Learn what your business could command and which factors would most affect its value. The conversation is confidential and carries no obligation.