Divestiture Assistance and the Process
We have the experience and expertise to facilitate an efficient and orderly divestiture, helping you to maximize value by thoughtfully organizing the divestiture process. This is especially important because many steps in the process present opportunities and risks that have a direct bearing on overall success including the final price and terms:
1. Developing the Exit Strategy
• Identify all objectives
• Identify the timeline
• Research the marketplace
• Define the operation’s positive attributes
• Prepare operations to maintain those positive areas
2. Determining Enterprise Value
• Recognize key value drivers
• Collect and analyze data
• Conduct valuation and determine desired structure
3. Defining Marketing Plan
• Prepare Information Memorandum
• Define and prepare marketing strategy
• Identify all potential buyers in the market
4. Bringing it to Market
• Develop and qualify all viable prospects
• Execute confidentiality agreements
• Share Information Memorandum
• Provide additional details if requested
• Meet/conference with strongest potential buyers
5. Letter of Intent
• Analyze written offers for best overall price and terms
• Propose counters offer if necessary
• Authorize best Letter of Intent
• Buyer conducts due diligence
6. Definitive Purchase Agreement
• Utilize qualified transactional attorney and tax advisor
• Plan transition using management agreement, non-compete, etc…
• Close and fund the transaction
7. Life After the Sale
• Continue working under your pre-negotiated employment agreement
• Follow a different entrepreneurial dream
• Travel the world
• Do whatever you want to!
Timeline of a Business Sale
How long does the process take?
Although the identification of interested and qualified buyers is almost immediate, the entire divestiture process can take approximately six to eight months and can be increased or shortened significantly by the responsiveness and motivation level of the seller.
The process can be broken down into three distinct phases:
Initial Assessment & Valuation, Aggressive Marketing Implementation, and Buyer Diligence through Closing.
Initial Assessment & Valuation involves the analysis of the business, professional “packaging” of the company, and developing a pricing and marketing strategy.
• Analysis of Business & Recast Financials 1-2 weeks
• Determinine Valuation & Pricing 1-2 weeks
• Identify Buyers & Develop Marketing Strategy 1-2 weeks
• Create Company Profile & Marketing Materials 1-2 weeks
Aggressive Marketing Implementation involves securing confidentiality, and then working with, qualified buyers to obtain Letters of Intent (offers), negotiating price, terms, and overall deal structure.
• Obtain Full Confidentiality Agreements from Buyers 1-2 weeks
• Present Business to Qualified Buyers 4-6 weeks
• Solicit offers and Negotiate LOI 4-6 weeks
The Buyer Diligence through Closing phase starts after an LOI is accepted and involves the buyer conducting Due diligence (a review of all claims made by the seller) as well as final negotiations of the Definitive Purchase Agreement and the closing of the deal.
• Due Diligence 4-8 weeks
• Negotiate Definitive Purchase Agreement & Closing 2-4 weeks
These time frames are approximate but based on over 11 years of experience.