The process of selling your company
Selling a company is a complex process that takes an average of 6 to 12 months and is likely unfamiliar territory for most. It's reassuring to rely on professional advisors who guide you toward the deal of a lifetime.
Introduction
In this phase, we are the partner who explores opportunities and challenges with the entrepreneur. Where do you want to be after the full or partial sale, and what do you want to take away from it? We provide an overview of all subsequent steps, including how the sale of the company will take place, a comprehensive valuation, and making your business exit-ready to achieve a higher valuation.
What are your future desires and ambitions, both for you and for the company? When do you plan to sell, and what is the current state of the business? These questions will be addressed during the initial exploratory meeting. Your personal rapport with the deal team is important as well because selling your business can be an emotional process. Our dedicated advisors also provide independent support in this regard.
The company's value plays a crucial role in the sale process for both buyer and seller. We use a unique online calculator that combines the multiple method with other relevant factors like the nature of the business, industry, financial data, and valuation goals. Within one minute, you will receive a reliable and up-to-date estimate based on over 1,000 deals and 40,000 calculations annually. Naturally, we also explore ways to further optimise the value of the business.
Your reasons for selling the business largely determine the exit strategy. Do you want to take a growth step or rather step back partially or completely? Once we have a clear understanding of your personal motivations and ambitions, we present various options. We find that entrepreneurs often have an idea of their preferred sale strategy, but there's likely to be a scenario among the options that they hadn't considered but may align best with their personal situation.
Now that we know your preferences, the state of the business, and the preferred strategy, it's time to think about potential buyers. We connect buyers and sellers in the acquisition market daily, so we have a comprehensive understanding of what's happening. Our advisors ensure that your business is presented well to the market, allowing you to explore multiple options before entering negotiations.
Your business deserves an impressive presentation, so we meticulously create the information memorandum. Essentially, it's a sales brochure containing all the details about the company and the industry. This includes corporate structure, business activities, employee base, the role of the CEO, financial overview, future expectations and risk analyses. The information memorandum is always shared confidentially with the goal of informing and exciting potential buyers and investors.
You may already have a list of potential buyers for your business. We supplement this list with candidates we've selected using our data-driven approach. Once we have a comprehensive list of potential buyers, we perform a critical selection based on the ideal search profile and expected offers. After this screening, it's time to make decisions and select the parties to approach. Thanks to our extensive national and international network, we introduce you to an average of six to ten different candidates.
When a company shows serious interest after an initial phone call and reviewing an anonymous sales profile, the CEO signs a non-disclosure agreement (NDA). This is a legal document that obliges both parties to handle all information carefully and discreetly. Equally important is the requirement that all information is deleted if the process doesn't lead to a transaction. After signing, the potential buyer is informed about the company's identity, and we provide the information memorandum.
Potential buyers who are genuinely interested naturally want to know everything about the business. For your part, as the selling entrepreneur, it's crucial to get to know the future owner well. Often, we arrange neutral grounds for so-called management meetings, and ultimately, we invite potential buyers to submit indicative offers.
Our experience suggests that you'll likely receive multiple offers. However, the highest offer isn’t automatically the most attractive one. Specific conditions and mutual trust are equally important. We help you keep an overview during this phase, where many decisions come your way, and you approach the best deal of your life. Once we've evaluated all aspects, we select one party to exclusively continue the sale process.
The principles agreed upon during the management meetings are documented in a Letter of Intent (LOI). This document covers the purchase price, the way the due diligence will be conducted, the management agreement, exclusivity for further negotiations, financing conditions, and suspensive clauses. This legal document serves as the basis for further negotiations. While we can't provide a 100% guarantee, in most cases, signing an LOI leads to a successful transaction.
The purchasing party also wants to be certain of a successful acquisition. Therefore, a financial and legal review, known as due diligence, is conducted where a lawyer or accountant checks all terms and information for accuracy and completeness. This can be a challenging period where you aim to maintain the trust built earlier while moving toward a closing, but you may also need to answer many questions. The advisors at Marktlink ensure that this investigation proceeds as smoothly as possible and that any consequences leading to unexpected price adjustments are addressed in the LOI in advance.
It's almost official; the sale of the business is virtually complete. This is the phase where patience is key: the lawyers prepare all documents, and a date is set for the official closing. While the celebrations need to wait till after the closing, this is also the time to consider what else needs to be arranged and who needs to be informed.
With the review and signing of all contracts, the sale process is legally completed. Together with the potential buyer, you have made agreements regarding the official transfer and communication surrounding the announcement. You transfer the shares in exchange for the purchase price, marking the end of an intensive period.
You have likely been working in secret for months leading up to this moment. It's now time to inform your employees, customers and other stakeholders. You may also have made agreements with the buyer about sending out a press release. At Marktlink, we collaborate with an official agency that prepares and distributes these press releases to relevant media. This service is free of charge for you as our client.
The champagne corks have popped, and you have officially handed over your company. You may still be involved for some time to wrap up your responsibilities and transfer them to the new management. But above all, it's time to enjoy a new reality.
Are you planning to sell your business and do you want to know more about the sales process? Then feel free to contact us, our specialists are here for you.