UlTImATE SUccESS GUIdEis the phase where you must take charge of the process by providing the
same information and opportunities to all acquirers. This establishes a
competitive process (or professional auction) which will always result in
a higher price. Transmit a Fact Sheet and referenced NDA to all qualified
acquirers with a return receipt to ensure all are opened and viewed. We
actually make a personal call to at least 20 of the “key buyers” to ensure
that they are invited to the process. This is another area of the process
where an industry expert should have those
relationships and trust of the acquirers.
Typically within two to three days, NDA’s
are executed and sent back to our offices
either scanned or via fax. A spreadsheet
is developed keeping track of those com-
panies that have formally entered into the
process. We typically will give acquirers
one week to respond to the Fact Sheet and
then we make contact with all companies
that are now under confidentiality to dis-
cuss the process in greater detail. During
that contact, we will outline the timing of the potential transaction, typi-
cally giving acquirers two weeks to review the CBP and make an offer
in the form of an Indication of Interest or a Term Sheet. A Term Sheet
outlines the basic price, terms, and major events to a transaction.
For our sample company, thirteen NDA’s were returned within one
week, and within three weeks, seven Term Sheets were sent to us, four
from strategic acquirers and three from financial acquirers.
PhAse thRee - negotIAtIon PhAsePhase three is where the Enhanced Process begins to truly separate from
the traditional investment banking auction process. A full analysis of all
offers is performed, paying close attention to the “real” value of each
offer. This analysis requires a spreadsheet tool that will clearly display
and compare each component of the transaction, i.e. cash, notes, equity,
salaries, etc. In addition, we rank the “execution risk.” Execution risk
is the level of confidence we have that an acquirer will actually close
the deal. This somewhat subjective criteria is based on the history of the
particular acquirer, capital sources, the description of the due diligence
process and the depth of the team performing the acquisition. This anal-
This is the phase where
you must take charge of
the process by providing
the same information
and opportunities to all
acquirers. This establishes
a competitive process
(or professional auction)
which will always result
in a higher price