Selling a business
Bridge Mergers & Acquisitions provide a complete service when helping you sell your company.
We adopt the following process:
Client Objectives and Valuation
It often takes years of work and effort to build a business; when that business is
sold, the success of those years can be enhanced or squandered.
We understand how important the sale of a business is to the owner. We carry out the
assignment with that understanding fully in mind and avoid the “quick and easy” sales
that only truly benefit the advisers.
From the outset of an assignment, it is important that we have a clear picture of the
current market value of the client’s company. The valuation of companies is not an exact
science but we always aim to agree a target price with the client before we start to
market their company.
The biggest factor influencing the valuation of a company is, of course, the identification
of the “right buyer”. Depending on their own specific circumstances, different buyers
perceive very different benefits of a purchase. It is, however, usually possible to decide
upon a realistic price target at the beginning, which avoids disappointment and wasting time
and effort. Naturally, the target price is not disclosed to potential buyers.
Identifying and Approaching Buyers
Potential buyers, which in most cases are trade buyers, are identified by comprehensive
research into the relevant market areas. By scrutinising publicly available information
about companies, we build an extensive and qualified list of targets. As a third party,
we can approach in total confidentiality many companies with which our clients would
otherwise find it difficult to open negotiations.
Without disclosing the identity of our client, the target buyers are approached and their
responses rigorously screened in order to identify the serious purchasers. In this way, we
draw up a shortlist, which is discussed with the client.
The short listed targets will then be required to sign a Confidentiality Agreement before
being provided with any details which would identify the company being sold. Visits and
discussions can then be arranged. Bridge Mergers & Acquisitions' role throughout is to filter the responses so
that the client is only concerned with serious buyers on a strictly confidential basis.
This minimises visits and disruption to the business.
Our handling safeguards the client’s time and preserves their relationship with employees,
customers and suppliers. It also prevents alerting competitors to the intended sale.
Company Profile
One of the most important factors in the successful sale of a company is the proper
presentation of that company to potential buyers. This is normally achieved in the form
of a Company Profile, which is a concise, accurate and sufficient overview of the business
in a readily recognised format.
We give all client-approved buyers sufficient information about the company so that they
can properly assess whether a visit and further investigations are worthwhile. We also ensure
that they have the same information at the same level of detail. As far as possible all
potential buyers are approached at the same time. These two factors help to ensure that
the buyers are kept at the same stage in the process so that, when offers are made, they
can be compared,
Potential buyers are only sent details of the company if they pass four tests:
- They have been approved by the client;
- They have sufficient financial resources;
- They have signed a Confidentiality Agreement; and
- They have given an adequate reason for their interest.
Negotiations and Heads of Agreement
Negotiating the sale of any business is a process, not a single event. The results for
both parties can always be improved through negotiations which seek to identify and accommodate
each party’s requirements.
Successful transactions are achieved through a series of formal and informal meetings and an
exchange of information and ideas. During this process, we work closely with both parties. Such
negotiations avoid the unproductive, confrontational situations that are common if vendor and
purchaser negotiate directly and are, thereby, naturally forced into the position of adversaries.
The objective of the negotiations is to achieve a Heads of Agreement. Although not legally
binding, this document will contain the essential terms of the deal and give a definite timetable
for completion.
Completion
When a potential purchaser decides that he wishes to buy a company, the vendor’s solicitor
will then work with the buyer’s advisers to draw up the Sale and Purchase Agreement. This is when
the costs to the vendor can mount significantly. These costs can be minimised, however, by Bridge Merger
& Acquisitions involvement before solicitors are instructed. We draw up a carefully drafted Heads of
Agreement and ensure clear understanding of all the terms before costly legal fees are incurred.
Our involvement at this stage is designed to ensure that the desired results of the negotiations are
preserved and that costs are contained. Bridge Mergers & Acquisitions is particularly mindful of the need to
keep the transaction moving forward at an acceptable rate to avoid delays, which so often lead to aborted
negotiations.
And finally
For Bridge Mergers & Acquisitions, the successful outcome of a sale means that our client has achieved
their objectives, not only for themselves, but also for their business and employees; that they have
minimised their tax liability; and that they are still on good terms with the buyer.
Fees
Our fees are competitive and follow best practice for the industry. They are success
related - a percentage of the price paid for a company - with a small fee for initial
set-up and research.
The client is able to cancel an assignment at any time without penalty and is only liable
for a success fee if a transaction introduced by Bridge is completed.