Sellers

Evaluation
A thorough evaluation of your company is the first step in the M&A process. Knowing what your business is worth will help you determine when to sell it and how best to prepare it for sale. By understanding the value of your business and the characteristics that contribute to and detract from value, you will be in a position to make informed decisions to optimize the proceeds from an eventual sale.

The evaluation identifies the potential fair market economic value of your company. The process is both quantitative and qualitative in nature. It includes a full assessment of your company’s strengths and weaknesses, detailed financial analysis – including recasting and pro-forma projections supported by market research, and the application of various valuation methods. Ignoring simple valuation formulas, multiples and “rules-of-thumb”, we apply such valuation techniques as discounted cash flow and leveraged buyout analyses, comparable company analysis and comparable transactions analysis, as appropriate. In addition, Gideon’s valuation methodology incorporates our knowledge of and experience in selling middle-market businesses.

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Deciding to Sell
The evaluation identifies the potential fair market economic value of your company. The process is both quantitative and qualitative in nature. It includes a full assessment of your company’s strengths and weaknesses, detailed financial analysis – including recasting and pro-forma projections supported by market research, and the application of various valuation methods. Ignoring simple valuation formulas, multiples and “rules-of-thumb”, we apply such valuation techniques as discounted cash flow and leveraged buyout analyses, comparable company analysis and comparable transactions analysis, as appropriate. In addition, Gideon’s valuation methodology incorporates our knowledge of and experience in selling middle-market businesses.

 

Developing an Exit Plan/Defining Personal Needs
Once you decide to sell your business, it is best to outline your priorities and objectives before we begin the time-consuming, complex and emotionally taxing marketing process. Working with your M&A professional, you need to explore the deal issues that you are likely to encounter in the market discuss the various pricing structures that you may be offered. By defining your personal needs and the risks you will and will not accept up-front, you will be better prepared for the selling process.

 

Buyer/Marketing Strategy
The universe of potential buyers is diverse and reaches far beyond the anticipated acquirers such as known competitors and employees. The buyer universe typically includes public companies, large private corporations, offshore companies and private equity groups. Initially, we approach the buyer strategy much as we would a new product launch, identifying categories of buyers that would be attracted to your business for access to one or more of your company’s products or services, patents or licenses, production facilities and capabilities, market share, customer base, geographic territory, skilled employees/intellectual property or suppliers.

 

Once we identify the types of buyers, we then look for prospects that fit our size, location, and line-of-business criteria. This is where we rely on our research skills and the Gideon Proprietary Buyer Database. Containing information on many thousands of active buyers -- individuals, corporations and equity groups -- this buyer database helps us to identify strategic buyers that may have the most to gain from the acquisition of your business. Buyers whose motives closely align with your objectives, who have the capacity and interest to complete the transaction and who may be strategically driven to pay a premium value.

 

Documentation
Professional marketing materials combined with a tightly controlled marketing campaign produces the best results. The documents required for an effective marketing campaign include a Confidential Business Profile and a Confidential Business ReviewConfidential

 

Business Profile
Initially, we present prospective buyers with a Confidential Business Profile on your company. This document is a brief, blind profile used for capturing buyer interest while maintaining the confidentiality needed to protect your business. It is written to appeal to strategic or appropriate buyers and to motivate them to sign a Confidentiality Agreement, which allows them to learn more about the acquisition opportunity while maintaining the privacy of those disclosures.

 

Confidential Business Review
The Confidential Business Review is an extensive and comprehensive review of your company. This document contains all the details of the business – financial, operational and marketing. It is supported by independent, third party industry research and extensive financial analyses of your business.

 

Screening Preliminary Offers
To protect our client, we work to ensure that the objectives of potential buyers are aligned with those of the seller, and that the buyers have the motivation and ability to complete the transaction.

 

Negotiating/Deal Structuring
The Gideon marketing process strives to simultaneously interest multiple buyers in your company, a strategy designed to create a competitive environment in an attempt to generate the best offers.

Typically, during this step, we analyze, evaluate and compare each offer, reconciling the price and structure with your personal goals and objectives. We then negotiate -- simultaneously -- with the preferred buyers. By emphasizing the value and synergies of the transaction, from the perspective of each buyer, we work to optimize the transaction price and terms.

 

Final Letter of Intent
Provided by the “winning bidder”, this document spells out the agreed-to purchase price and terms (cash, notes, buyer stock, future payments, etc.) of the transaction.

 

Due Diligence
During this process, the prospective buyer more than likely will thoroughly examine all aspects of the business. The buyer will bring in teams of professionals including bankers, attorneys, accountants, business operations managers, tax experts and others. The due diligence process must be meticulously managed to: (1) ensure that the buyer fully appreciates the value of the company; and (2) resolve the issues that inevitably arise in each transaction. This is the most sensitive part of the transaction and requires proper documentation and expert guidance to maintain momentum while preventing erosion in the proposed price and terms -- or the transaction itself.

 

Definitive Purchase Agreement
Once satisfied that they have fully investigated your company, the prospective buyer presents a Definitive Purchase Agreement. This document outlines the final price and structure of the transaction as well as the financing sources, representations and warranties, indemnifications, expected role of the owner after the sale, any necessary EPA audits and regulatory approvals and other conditions of the sale.

 

Closing the Transaction
After painstaking effort, attention to detail, and directing and controlling the transaction at crucial junctures, both parties sign the contracts, and the buyer transfers the funds. The transaction is closed. You have finally achieved the liquidity you have earned from building – and selling – a successful business.

 

Invest Proceeds
The final step in the process entails financial and estate planning and investing the proceeds from the sale of your business to ensure attractive returns in future years for retirement or possibly based on timing, funding next endeavors for more serial-founders/entrepreneurs. 

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