UlTImATE SUccESS GUIdE- Price is not nearly as important as structure and this is where an
Enhanced Process will assist you to objectively and analytically
choose the best structure to get you the most money in the end. - A normal transaction process will discover one or maybe two
acquirers; an Enhanced Process contemplates ALL potential
qualified acquirers, creating a bidding process that will give
you leverage with the buyers. - In a normal transaction the acquirer is typically in control of the
process, timing, etc.; in an Enhanced Process, you the seller are
in control.
In order to help you understand the Enhanced Sale Process we will de-
scribe an actual client transaction, keeping confidential the “real” num-
bers while providing you with numbers that mirror the transaction and
describe the value of the Enhanced Process.
A successful transaction has four basic phases, with each phase having
specific strategies that will yield the greatest value. The four phases are
Preparation, Marketing, Negotiation, and Due Diligence and Legal. We
will describe each phase and outline specific strategies in order to en-
hance value and deal structure.
PhAse one - PRePARAtIonThe Preparation phase is integral to a successful transaction as the infor-
mation that is developed will be what the buyers will utilize to determine
an initial price for the business. The first step of the Preparation phase
is the development of a Confidential Business Profile (CBP). The CBP
provides a clear picture of the financial and operations performance of the
business, highlights the staff and management of the business, and pro-
vides an overview of the current specific industry conditions. The most
important aspect of the CBP is to clearly highlight the target company’s
growth opportunities, how the leadership and staff will execute on those
opportunities, and the operations and financial outcome of executing on
the growth plan. Acquirers are buying the growth and the better you can
describe and objectively show that the business and management team
can execute on a growth strategy, the more a buyer will pay.
Another important element of the CBP is the calculation of the compa-
ny’s EBITDA (earnings before interest, taxes, depreciation and amorti-