SELL-SIDE ADVISORY

 

If you are like many business owners, you may find the prospect of selling your business to be a daunting challenge. For most, it is a once-in-a-lifetime experience that entails a largely unfamiliar process. It also involves an asset comprising a large percentage of your net worth, in addition to lots of personal blood, sweat and tears.

Through our Sell-Side Advisory service, we provide entrepreneurs and family business owners with an expert hand to assist them in preparing their business for sale; packaging and marketing it as a product that will attract qualified buyers; negotiating the price, terms, and conditions of its sale; and closing the deal.

Through our vast experience in M&A transactions, Pace has learned that successful Sell-Side engagements are generally premised upon:

  •  Diligent preparation of the business and its owners for the sale process;
  •  Creating a competitive bidding enviornment among multiple prospective purchasers;
  •  Disciplined execution of the sale process;
  •  Reliance upon a team of trusted advisors that includes experienced M&A professionals.

In summary, Pace's proven, customizable sale process increases the probability of acheiving premium economic value for a Seller's business, as well as the certainty of closing the deal.

You can learn more about how Pace incorporates these key success factors into its Sell-Side Advisory Service by clicking on each of the four tabs below.


 

 

 

The key is not the will to win. Everybody has that. It is the will to prepare to win that is important.

 -- Bobby Knight

Diligent Preparation

Diligent Preparation

Pace will ensure that the business and its owners are thoroughly prepared for the sale process.

Prior to formal engagement, Pace:

  • Provides Seller with a comprehensive review of the sale process, its timeline, and the specifics of our methodologies.
  • Works with Seller to clearly define and prioritize their objectives (business valuation, transaction timing, and legacy concerns) and to thoroughly explore available alternatives for achieving them.
  • Assists Seller in making reasonable adjustments to its financial statements to normalize financial results for the impacts of extraordinary events, related party transactions, and other single period anomalies.
  • Provides Seller with an estimated range of value for their business based on preliminary analysis and information identified above.
  • Confirms Seller intent to move forward with sale via an exclusive engagement agreement with Pace.

After formal engagement, Pace:

  • Conducts thorough industry, market, and financial analysis to obtain a complete understanding of Seller's business.
  • Conducts detailed due diligence review of the Seller's business to identify key issues that might adversely impact marketing of the business or negotiations with purchasers, assess the availability and quality of documentation required to satisfy purchaser due diligence requirements, and to assist Seller with organizing all such documentation for presentation to purchasers via virtual data rooms.
  • Prepares, with Seller's assistance, a marketing document that Pace will distribute to qualified, Seller-approved prospective buyers. The document, known as a Confidential Information Memorandum, provides a complete description of the Seller's business, its unique attributes and prospects, markets and market segments served, business/competitive strategy, operations, personnel, historical financial statements, and other information relevant to prospective purchasers.
  • Develops a preliminary marketing strategy and list of prospective purchasers.
  • Collaborates with and coordinates the efforts of Seller's other trusted advisors (lawyers, accountants, wealth managers, tax advisors) involved in the sale process.

 

 

 

Every day you're not selling an asset that's in your portfolio, you're choosing to buy it.

 -- Sam Zell

Business Owner's Assets

Competitive Environment

Pace typically uses one of two basic methods for marketing and negotiating the sale of a business, with the choice of method determined primarily by the Seller's objectives, the nature and structure of the industry in which the Seller's business participates, and the prevailing supply/demand dynamics of the M&A marketplace.

Controlled Auction

A Controlled Auction is a carefully mananaged business sale process designed to produce competitive bidding among potential buyers. It is best suited for businesses that are likely to attract numerous potential buyers (e.g., a local/regional business that presents an excellent opportunity for multiple out-of-market companies in the same business to expand geographically) and for periods in the business cycle when M&A markets dynamics generally favor sellers.

The advantages of a Controlled Auction include:

  • Reaches the broadest number of prospective buyers;
  • Maximizes the probability of achieving a premium price;
  • Enhances Seller negotiating leverage over transaction terms and conditions; and,
  • Provides Seller with more control over transaction documents and timetable.

The disadvantages of a Controlled Auction include:

  • Some buyers will not participate;
  • Risk of customers/vendors becoming aware that business is for sale
  • Risk of taint from failed sale
Negotiated Sale

A Negotiated Sale (also known as Targeted Sale) is a business sale process that includes a very limited number of potential buyers, one or more of which is highly likely to close the transaction. It is ideal for situations in which a Seller's business presents a very few potential buyers with a compelling strategic opportunity that potential buyers evaluating the transaction on a strictly financial basis could not realize. Consequently, the strategic buyers can afford to pay more than financial buyers, which reduces the need for a broad marketing process. In these circumstances, Pace works with Seller to develop an optimized marketing/negotiating strategy tailored to these strategic buyers.

The advantages of a Negotiated Sale (derived primarily from the small number of prospective buyers involved) include:

  • Facilitates the building of a relationship between Seller and Buyer;
  • Low risk of customers/vendors becoming aware that business is for sale;
  • Compressed transaction schedule and time to close;
  • Less disruptive to Seller's business;

The disadvantages of a Negotiated Sale (arising from the small number of prospective buyers) include:

  • Lack of comparative, competing offers;
  • Reduced Seller negotiating leverage;

Pace works closely with Seller to determine which of these sale processes fits best with the Seller's exit objectives (economic value, transaction timing, and qualitative/legacy concerns) and customizes the marketing and negotiating strategy accordingly.

 

 

 

Execution is a specific set of behaviors and techniques that companies need to master in order to have competitive advantage. It’s a discipline of its own.

 -- Larry Bossidy

Disciplined Execution

Disciplined Execution

Pace develops a customized marketing strategy and transaction execution plan for every sale predicated upon the Seller's specific circumstances and objectives. Key elements of the sale process generally include:

  • Pace develops a list of prospective purchasers based on Seller recommendations, our relationships with lower middle market-focused private equity and M&A firms, and thorough research based on market/industry analyses, databases, and information exchanges to which we subscribe. For Controlled Auctions, the scope of this list is as wide as possible; nor Negotiated Sales, the scope is limited to likely strategic acquirors.
  • Seller approves all prospective buyers.
  • Pace distributes information about Seller's business and its investment merits to those on the approved buyer prospect list.
  • Pace coordinates and assists Seller in hosting prospective buyer visits to the Seller's business
  • Pace requests Letters of Interest/Intent specifying price and key terms/conditions of a proposed transaction from interested buyers, as well as any information necessary to validate their financial capacity to complete the transaction.
  • Pace assists Seller in evaluating these preliminary offers and selected one of more bidders for further consideration.
  • Seller provides final bidders with access to virtual data rooms and hosts additional visits by final bidders as necessary for them to complete their due diligence.
  • Pace assists Seller in negotiating price and key transaction terms with final bidder.
  • Pace assists Seller's attorneys in drafting and negotiating the Purchase Agreement and related legal documents with Buyer, with a strong focus on driving the transaction to closing while ensuring the documents reflect the Seller's interests.

 

 

 

 

The only source of knowledge is experience.

 -- Albert Einstein

 

 

Denis Brown

Denis Brown

 

Denis, a Certified Exit Planning Specialist, brings a unique blend of experience to the marketplace. He has been involved in more than 100 transactions as a buyer, seller, investor, lender, or M&A advisor throughout his career.

Jim McClintock

Jim McClintock

 

As a seasoned and accomplished business leader, Jim brings a balanced blend of corporate (Citibank, SunTrust, BellSouth) and entrepreneurial experience to his role as an M&A and strategic advisor to Pace's clients.