Selling Your Business: Getting the Deal Done
By Trip Holmes
In our last post, we outlined the process of getting started with a business broker when selling your business, integrating some of our approach to sell-side M&A advisory work here at Sabre Capital.
Continuing in the spirit of helping folks prepare for what may be the biggest transaction of their lives, let’s take up where we left off. After we have published a full confidential information memorandum, a that’s basically an initial “listing” of the business (as with real estate listings for homes and commercial properties), we develop a target buyer database from a variety of research sources and network contacts.
Outreach and Education
So, our next step is to develop a marketing and education campaign that will reach qualified prospective buyers, that you, the seller, will vet for viability. As interested buyers reveal their interest in acquiring your company, we will execute non-disclosure agreements with them. Putting this agreement in place enables us to share the confidential information memorandum to further whet their interest.
The Letter of Intent
Once a prospective buyer indicates serious interest, we will assist in developing the letter of intent and customary term sheets. Sometimes, letters of intent can be overly complex, but one of my favorite business partners has always said to keep them simple, discussing price and timelines only, since there’s plenty of time after due diligence for meting out all of the terms and conditions of the transactions.
After offering the letter of intent, the buyer conducts due diligence on the seller’s company, looking at financial records, contracts, assets, debts, management, employees, real estate, equipment, and any other legal, financial, or operational aspect of the company. At Sabre, we rely on client information, as well as the expertise of accounting, tax, financial, and legal advisors to provide professional assistance and information during every phase of the process, especially during due diligence as we prepare to close the transaction. Due diligence should result in a clean, definitive transaction agreement that reiterates or modifies, based on the diligence findings, the previously agreed terms and conditions.
With a definitive transaction agreement is in place, Sabre will continue working hard and maintain the transaction’s momentum, keeping all parties on schedule to close. At the closing, our company will receive a customary sales commission, in line with industry standards for investment banking and business brokerage services.
I can honestly say that this process never gets old. In fact, I love what I do so much, that I’ve been doing it for 35 years, while always looking for ways to improve and earn each client’s satisfaction. If you’re thinking about selling your business and retiring to whatever your unique version of the “good life” is, contact us at Sabre Capital.