Eight steps to selling your business
There is a lot to consider when selling your business. Where do you find buyers? How do you prepare for the sale? How do you determine the value of your company? And what should you think about when transferring a business? In eight steps you can read how best to approach the sale of your company:
- Determining business value and selling price: First of all, we determine the value of your company based on a careful business analysis. This analysis forms the basis for the asking price that we determine together. With the help of well-substantiated arguments from the value drivers, we will arrive at a maximum price and yield during the negotiations.
- Drawing up a clear sales profile: A successful company takeover starts with good preparation of the sales process. We determine which parties are eligible for the takeover of your company and we map out to whom you want to sell your company.
- Drafting a sales memorandum: Before selling your company, we prepare a sales memorandum with all the ins and outs of the company. This gives interested buyers insight into your company and the reason for sale. Recipients of the sales memorandum are required to sign a confidentiality agreement.
- Searching for a buyer: We provide a clear action plan containing the search and acquisition channels that we use. We approach potential buyers or their advisors with an anonymized company profile (teaser) to gauge their interest. Parties that show interest based on the teaser are screened on background, reason of interest and available resources. To be sure that we only provide information to serious candidates. We will of course keep you informed of developments. As soon as a party wants to take the next step after receiving the sales memorandum, we schedule an introduction. If both parties feel good about this, the negotiation phase starts.
- Negotiations: We provide a good negotiation strategy. In consultation with you, we determine the objectives and possible alternatives. We negotiate with the candidate about the structure of the acquisition and the purchase price. Once we have reached an outline agreement with the prospective buyer, we record the agreements in a letter of intent (LOI). During the negotiations you will discuss, among other things: i) What you are selling (shares or the assets & liabilities); ii) Whether you sell some or all of the shares; iii) The sale price and terms; iv) The duty of confidentiality; v) Timetable and meeting schedule; vi) The legal business structure after the acquisition; vii) Your role, if any, after the takeover; viii) Whether you leave assets in the business.
- Due Diligence: Next, it's time for a buyer's due diligence on financial, tax, legal, commercial and general aspects. The bank often sets this as a condition for acquisition financing. The outcome of the due diligence investigation may affect the sale price. If it turns out that matters are not legally recorded properly or unexpected costs arise, the buyer will want a lower price or may even cancel the purchase.
- Completion of sale (closing): You agree on the sale price and the buyer has the financing in place. Then you sign the purchase agreement at the notary. Here you transfer the company or shares and receive the purchase price via the notary.
- Post-closing: Good communication inside and outside the organization is important when selling your company, for the involvement and the future of the company. We can draw up a communication plan for this in consultation with the buyer. Do you choose to remain partly involved with the company after the sale? Then make good agreements with the buyer about the division of roles.
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