How to sell a company
Deciding to sell your life’s work is one of the most significant decisions you will make during your lifetime. You may feel uncertain about the sales process itself and how to communicate a potential sale to others. Thorough preparations and a good M&A strategy will eliminate much of these uncertainties and lay the foundation for an orderly structured sales process. This is also crucial to obtain a premium valuation for the company. And find the perfect match.
Once you have decided to initiate a sales process, we will start with understanding your ambitions and expectations for a new owner and the company’s valuation. The next step is to assess the company’s current situation and future potentials. In this phase, it is essential to get all the facts on the table and document them. All aspects will be considered, ranging from customer contracts to the tax consequences of a sale, to if the company is in the process of developing a new technology that may create future potential value. Additionally, it is essential to address any potential pitfalls that may arise and negatively affect the valuation early in the process.
One of the advantages of starting the process early is that you and your advisors will have ample time to sort and mitigate any negative findings discovered during the preparation phase. Without enough time for preparation, the negative findings could appear during the buyer’s Due Diligence, which in the worst case could lead to reduced valuation or the buyer withdrawing from the process.
* Map ambitions and expectations for new owner and price
* What is the company’s current situation and potential?
* Prepare important documents related to customers, contracts and costs, etc.
* Get all the facts on the table – positive and negative
* Sort out everything that can be sorted prior to a process
* Identify criteria for what kind of buyer you want – and identify these
Thorough market analysis and forecast
One must carefully evaluate and analyze the market and potential buyers. The best buyer is rarely the first to knock on the door, thus fully considering the buyer universe is usually time well-spent.
By performing a thorough market analysis and an understanding of the sector dynamics, a sale can better be “timed” so that the company is marketed at the right time. For instance, should the market conditions change, it could be wise to postpone the deal for a few months. There could be a changing political landscape, or an ideal potential buyer who is too busy with other processes making the timing less favorable. Postponement can also be related to internal matters in the company. As an example, the company could develop new products and technology or sign new contracts involving significant revenue growth which changes the future prospects. Thus, timing the process is crucial to optimize the company’s valuation.
Therefore, thorough market analysis and active search for potential buyers are always an essential part of a sales process. Our experience is that the best buyers are not always the most obvious ones. For example, companies that currently are not viewed as competitors or obvious candidates but are looking to enter the relevant market and see that the seller’s services could complement them well.
* Make thorough market analysis and forecasts
* There are often more potential buyers than you think
* More buyers drive competition in the process and ensure a higher price
Even the balance in the negotiations
Many company sales are part of consolidation processes where smaller companies become part of a larger company structure. Hence, many sellers experience that they meet a very professional counterpart with several advisers on their team. Saga Corporate Finance has more than 20 years of experience with such sales processes. No two processes are alike, but we know which issues often arise and are matters we have already considered in the initial phases. Together with you, we will be well prepared and have solid answers to the questions and challenges that may occur during the process.
Saga Corporate Finance is a specialized adviser focused on advising profitable and successful companies. For you as a customer, this means that you get an experienced team consisting of highly dedicated M&A advisers with cutting-edge expertise in buying and selling companies. We follow you closely throughout the process and ensure that you are positioned in the best way possible when negotiating with a professional buyer.
We manage all aspects of the process in close collaboration with you, from initial mapping and dialogues to final negotiations with potential buyers. With us on your team, you will have a professional partner who controls the process and gives you the weight, experience, and authority needed to negotiate with the buyers successfully and maximize the valuation of the company.