SELL-SIDE ADVISORY

Private companies in the middle market face many challenges when confronting a decision to sell or divest. Owners often have concerns about timing of the market and frequently develop uncertainty over preconceived valuations of their business.  Transaction teams may lack the relationships or networks to effectively establish a competitive bidding strategy with multiple buyers. Additionally, the sell-side marketing process takes time and resources that may not be readily available. The list goes on.

With Winston Street, you have access to a full service M&A firm that can help you address the most complex issues related to your transaction. We use a deliberate sell-side program that will set up your business to achieve maximum results.

Preparation and Presentation to the Market

Identify viable deal structures and buyer types, consolidate corporate records and prepare and execute the marketing strategy that best achieves management’s strategic objectives.

Assessing Offers and Facilitating Due Diligence

Receive and analyze offers for alignment with strategic objectives. Prepare management and data room for buyer’s diligence and begin coordinating and drafting purchase and sale terms.

Negotiation of Terms and Closing the Deal

Finalize and execute the terms of the Purchase and Sale Agreement and any other agreements that may be required to close. Prepare business for transition and integration.

Details of our Sell-Side Services

If you’re like us, you want to see the details. Below are a few specifics related to our sell-side process.

Readiness Assessment and Preparation

We work with management to ensure the business is prepared on every level prior to “going to market.” At this early stage we begin to formulate the transaction’s anticipated valuation range and preferred deal structures. Another critical component at this stage is to identify any potential obstacles that will need to be prepared for in advance of marketing efforts.

Marketing materials are generally created in order to provide potential buyers with the necessary information required to make an informed decision about whether to acquire the selling company. Marketing materials generally include a blind or redacted “teaser” book, aimed at confidentially assessing a potential buyer’s interest, as well as a full scope marketing book complete with an investment thesis, operational information and a full set of historical financial statements and projections.

We work with our clients to develop an approved list of potential buyers to approach. Generally, we find that private companies in the middle market benefit the most from a private or limited auction with multiple potential buyers; however, it is not uncommon to approach a single buyer when extreme confidentiality is required or even a public auction when the owners only concern is maximizing the purchase price.

A buyer will usually convey its interest in a letter of interest or a letter of intent. It is prudent at this stage to take a step back and analyze the details of each proposal for the quantitative and qualitative value implied within the offer. While typically non-binding (though some clauses within a letter of intent may have binding attributes), these offers indicate the major parameters by which a buyer envisions a successful transaction occurring. It is critical to present a detailed comparison of the available offers and the impact each has on our client’s valuation, tax implications, proposed transition and many other aspects that relate to the transaction’s objectives.

Due diligence is a stressful process for many business managers. Unfortunately, it is a necessary part of a transaction. While some documents can be prepared for in advance of a buyer’s diligence request, we often find that buyers have different reasons why they are looking to acquire a business and attempting to predict a buyer’s data request prior to diligence may result in unnecessary work and multiple document refreshes. With Winston Street’s approach to diligence, we manage the entire process in a professional yet conducive process while ensuring that a buyer’s request for data is adequately screened for reasonableness, relevance and in some instances, void of sensitive information.

Throughout the diligence process, the legal teams for both the buyer and seller will begin to compose and circulate drafts of the proposed purchase and sale agreement and other related agreements (employment or noncompete agreements or promissory notes). Many of the clauses within the agreements contain financial and/or tax implications to which Winston Street can help navigate. Often, these documents serve as the formal way in which the parties negotiate with one another. While many of the requirements necessary to achieve a successful close will have been identified prior to the drafting of the agreements, there will undoubtedly be clauses that will be disputed between the parties. Winston Street closely monitors these disputes (with a keen focus on our client’s objectives) and, if possible, coordinates the effort to find resolutions.

Keeping the transaction on schedule is the primary focus at this stage of the process. While the deal may seem to be all but closed, it is not uncommon for last minute changes in the purchase price or revised terms and conditions. Suffice to say, patience and continued focus are required right up to and often beyond closing, depending on employment commitments and/or post-closing adjustments that may be specified in the purchase and sale agreement.