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Documents Needed to Prepare to Exit Your Business (What is an M&A Advisor Worth to You - Part Two)

By Generational Equity

Documents for Exiting a Business

A few weeks ago we published a piece entitled, “What is an M&A Advisor Worth to You?”. In that post we essentially examined the standard fees charged by reputable, experienced M&A firms with the conclusion that you get what you pay for. If you don’t make an investment in a professional firm to guide you, it is quite likely that you will get far less than an optimal deal (or close one at all).

In part two today, we give you a really good example of just the type of fantastic service a firm like Generational can provide you. Our friends with SS&C Intralinks (a leading financial technology provider for the global banking, dealmaking and capital markets communities), published an M&A “checklist”.

I found the checklist to be extremely comprehensive and helpful but also incredibly daunting to anyone attempting to sell a company without representation. You can find and download the list here:

They summarize their checklist this way:

Preparing for a merger or acquisition can be a complex, time-consuming process requiring a massive number of documents and data to collect for deal prep and due diligence. Missing key documents, or even supporting ones, can slow down the process and frustrate everyone involved.

I invite you to review it, but warn you that it is huge. So here are a few segments that I found the most challenging if you are a business owner attempting this on your own (I only picked five because I got so tired reading all of them).

Corporate Matters

-  Organizational chart and management structure.

-  Charter documents, operating agreements, by-laws, business licenses, certificates of authority and stock certificates.

- Information and documentation on joint ventures, acquisition and/or disposals of subsidiaries, affiliates or major assets of the company (last 5 years), key contacts by function, management team biographies.

Financial Information (FYI, there are 33 subcategories under this one alone)

 - Consolidated financials (last 5 years and YTD), accounting reconciliation of all accounts for the most recent balance sheet available.

- Description of any off-balance sheet commitments, price and volume data by division and product annually, accounting policies and procedures.

-  5-year projection model including assumptions and granular backup, detailed capex schedule including breakout between maintenance, growth and new products and acquisition (5 years historical and projected).

-   Detailed working capital schedule, summary of the composition of inventory for last 5 years, list of inventory including the result of the last stock physical count reconciled with the accounting balance at the date of physical count.


 - Material supply and sourcing contracts, material customer contracts, list of any guarantees, indemnifications, or similar agreements, loan agreements, credit lines.

- IRBs, derivatives, letters of credit, security agreements, guarantees, equipment leases and other financing documents, all contracts or agreements providing for third party consent to this proposed transaction.

Labor Relations (31 subcategories under this one)

 - Employment agreements, applications for employment, hire letters, and descriptions of oral/informal promises or commitments regarding terms of employment.

- Employees by location, department, salaried vs. hourly, union vs. non-union, and current compensation and employment status, summary of any strike/work stoppages/grievances, list of all executives that provide services to the company.

- List of outsourced companies providing services to the company, containing name, initial date of provision of services, amount, description of the services provided, and contract terms (last 5 years and YTD).

- List of the benefits, both formal and informal, given to employees, directors and officers (most recent), bonuses paid out for the past 3 years, claims, actions and proceedings (other than normal benefit claims).


 -  All applicable tax returns filed for the last five years (federal, state, local, property and foreign).

-  Details on any deferred tax assets and liabilities, federal or state tax audits and supplementary materials.

- Nature and location of assets of the corporation and their respective fair market values and tax bases, transfer pricing, strategy, analysis, and advice received.

OK, so you get the picture. Lots of info and it needs to be meticulously accurate. And keep in mind that what I have above is a sample of five out of the 12 categories on the list.

The good news for Generational clients is that the first step in our proven process is a thorough and comprehensive evaluation of the business, where many of these topics are flushed out. The questionnaire that we send to our clients and the subsequent multiple conversations about the questions really helps the business owner get prepared for the most grueling aspect of the exit journey: Due Diligence.

Any topic we have not uncovered in our documentation during the evaluation phase will be brought up by the 200-300 question due diligence checklist. But with our team by your side, the odds of surviving the DD process are improved astronomically. Don’t take my word for it, hear from a few of our clients:

One other item to consider: The selling of a business is a 9-18 month marathon. During that time frame, you not only have to prepare your documentation, even more importantly, you have to continue to run your business and ensure it is on track to reach its financial goals, while growing and remaining profitable. Even the slightest wobble, say your revenue falls by 10% or profit margins dip, can have a huge impact on your valuation. So far better to invest in a team to represent you and to help you walk this journey while you focus on the business side.

Generational has a proven track record of doing this for business owners for years and years. We would love to have a conversation with you about how we can do the same for your company. We offer complimentary Growth and Exit Planning Conferences throughout North America where you can start to learn about what we provide. Please use the following links to learn more:

Carl Doerksen is the Director of Corporate Development at Generational Equity.

© 2022 Generational Equity, LLC All Rights Reserved

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We were represented by Michael Goss with Generational. The due diligence was grueling and exhausting, but Michael propped us up and kept us motivated throughout the process. Debi and I continued to ask each other how we could possibly make it through this process without the assistance of Michael. Michael's professionalism and knowledge is absolutely amazing, and we are so blessed to have had him by our side as we made our future dreams come true.
Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
I wanted to take this opportunity to thank you for all that you have done for us. Not only did you take care of all the aspects of the sale but took extra care to make sure we knew what it looked like every step of the way. I will definitely recommend your company to anyone that is in a position to or looking to exit their business.
Shane and Johanna Kline, Owners of Vision Upfitters
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers
We had the pleasure of working with Mr. Ahmad Behjati Managing Director, M&A, for Generational Equity during our acquisition of Papa's Dodge in late 2021. Generational Equity and Mr. Behjati represented and marketed Papa’s Dodge. As our primary contact, Mr. Behjati was professional in every facet of this acquisition process, conveying valuable advice most times and assisting us in every step of the process.
Rick Greene of Dobbs Equity Partners LLC
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!
Eric Erlandson, Owner, Action Fastenings, Inc.
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software
The most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.
Salvo Stoch, Founder and CEO of Sleeping Partners
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
I decided to attend the conference and hopefully receive some guidance on how to structure an exit plan of my business. Upon arriving at the conference, I was so impressed with the presentation given by Generational Equity that I set a future appointment that week to discuss the possibility of selling my business with their Senior Managing Director David Robinson.
JoAnn Ellis, Owner of Fondren 5 Star Kennels
Thanks to you, the entire GE team and especially Michael Goss for driving a great valuation, coaching me and driving the process across the finish line. Please let me know if there is anything I can do to support GE going forward.
Tom Currier, Former President & CEO, Rackmount Solutions
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.
Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.
Larry Moore, Owner, A Company Portable Restrooms
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!
JoAnn Ellis, Owner of Fondren 5 Star Kennels
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.
Bryan D. Horn, Owner, Over Under Clothing
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.
Pete L.
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
The professionals at Generational Equity then helped develop a roadmap for enhancing the value of the firm and an evaluation report. This was completed by June 14, 2021. We then developed the Confidential Information Memorandum and put Taylor Studios, Inc. on the market by July.
Generational Equity’s professional staff helped me every step of the way. Their network and professionals are the only reason I sold my company this quickly. For me this is a once in a lifetime sale and I was unfamiliar with the process. I was able to lean on them with questions and concerns.
Betty L. Brennan, President, Taylor Studios
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
After attending a conference with GE, I decided that the value they bring would be worth the expense and as soon as I started working with them, I realized that was the right decision. When we started to get LOIs, Fred Zweifel took the lead on the communication and supported negotiations throughout the process, which got tricky as we moved forward. I learned that it can be common for companies to make a great offer then work to erode that price with their discoveries, but Fred and the GE team kept that from happening.
Caroline Connelly, CEO, OptoTest