Management of the Business Sale Process

Sun M&A manages the business sale process from inception to completion. The following are the primary phases of the sale process.

For more details, scroll over pertinent phase for further explanation.

 

Confidentiality

Protecting confidentiality is of utmost importance when selling a business. Having this information prematurely become public can lead to the loss of customers and/or employees concerned about the stability of your business.

Sun M&A proactively protects your confidentiality throughout the sale process. Sun will not disclose your identity or other confidential information. A Confidentially agreement is signed by all potential acquirers prior to sharing any company information.

Confidentiality

Protecting confidentiality is of utmost importance when selling a business. Having this information prematurely become public can lead to the loss of customers and/or employees concerned about the stability of your business.

Sun M&A proactively protects your confidentiality throughout the sale process. Sun will not disclose your identity or other confidential information. A Confidentially agreement is signed by all potential acquirers prior to sharing any company information.

Formulating Strategies

A wide array of options are available when structuring a business sale. Sun M&A works with you to understand your selling requirements and transaction goals.

This includes:

  • Exit options that will satisfy your strategic goals/financial needs
  • Valuation expectations
  • Transaction roadblocks
  • Timing of sale
  • Likely tax consequences
  • Owner’s desire for future involvement with the company
Although an outright sale of the company is the most common structure, there are other transaction structure options including: retaining an equity stake in the business; selling to employees; identifying a working or investing partner; and other hybrids. Sun helps our clients understand the options and determine the most appropriate direction to pursue.

Business Valuation

Our philosophy is that fair market value is the minimum value that should be targeted in a sale. By identifying multiple strategic buyers that can realize synergistic and other intangible gains, we often achieve a transaction that exceeds this value. Sun M&A analyzes a firm’s strengths, tangible and intangible assets, financial performance, and expansion opportunities and utilizes proprietary databases to analyze purchase price comparisons of similar companies.

Our market exposure provides us with a clear understanding of transaction values and deal structures in the marketplace. This enables us to provide our clients with an understanding of the likely value expectation, in advance of beginning the selling process.

Financial Presentation

Proper interpretation and presentation of financial information is a crucial step in the selling process. Financial statements are typically prepared for tax purposes, not for business sale purposes, and do not accurately reflect the true profitability and potential earnings capability of a business. Acquirers must be able to “read between the lines” of the financial statements and tax returns to appreciate the cash flow being generated for the owner(s). Failure to properly present true “re-cast earnings” reduces the perceived value of a company.

During this process, we frequently identify value enhancing opportunities and initiatives. When implemented at the outset of the sales process, these strategies will enhance marketability and increase the value received from a transaction.

Packaging/ Presentation of Company

A professionally packaged and presented business increases a buyer’s confidence and comfort level, thereby increasing the likelihood of a successful sale. A business owner spends years establishing name recognition, market niche, vendor relationships, operation & production systems, management, personnel, distribution channels, customer loyalty and numerous other intangibles. This is a story that needs to be properly told.

Sun M&A takes pride in our ability to present an in-depth review of a company’s competitive advantages and expansion opportunities to validate and defend the future earnings potential of the business, thus maximizing its attractiveness and perceived value.

Identifying and Qualifying Prospective Acquirers

Sun M&A utilizes our extensive network of strategic, private equity, and individual buyers that are looking to grow through acquisition. We utilize proprietary and other licensed databases, in addition to numerous online resources, to create a highly targeted list of potential acquirers.

Sun M&A pre-qualifies potential buyers to gauge their interest level and ascertain their financial capability to close a transaction. This ensures that the prospects we bring to meet with you have been thoroughly vetted. This pre-qualification process is a crucial step to prevent wasted effort and protect confidentiality.

Negotiation/ Due Diligence/ Closing

Sellers are more likely to achieve a substantially better financial package when negotiating through a qualified intermediary. During this phase we will typically be negotiating with multiple parties thereby increasing your options and leverage, while avoiding dependence on any particular prospective acquirer. Our involvement allows you to continue to focus on your business and remain at arm’s length during the negotiation process, while still maintaining complete control.

After a specific buyer has been selected to move forward with, we will continue to work with your legal and professional teams throughout the final stages of the sale process including the creation of LOI’s (letters of intent), due diligence counseling, contract negotiation and closing.