A few weeks ago Axial, an organization dedicated to helping investors meet business owners needing capital, produced a “Buy-Side M&A Planning Worksheet.” As always, since the vast majority of our readers are business owners, I thought I would once again provide you with inside intel on what buyers are looking for when they analyze businesses. It is an interesting insight into how folks on the buy-side of the M&A world operate.
If you are too busy to download the entire document, I have provided a few key segments. Essentially Axial asks a series of questions that walk a buyer through vital areas to consider as they approach an investment opportunity. Some of the crucial ones for you to be aware of as a seller include:
OK, so several takeaways come to me as I review this list.
First, as you can see, as a seller you need to be ready to document why your company is an appropriate target for a specific buyer. You have to make your case quickly and succinctly in your Confidential Business Profile that you will be sending to targets.
But before you do so, you need to create a buyer list that includes targets that will be interested in the features of your business that match a checklist like the one above. Simply put, you have to do your research and create a compelling sell-side checklist (look closely at the first four questions asked above) regarding what areas of your company would be attractive and then target specific buyers using that checklist or, better yet, hire an M&A advisory firm to do so for you.
Secondly, your sell-side checklist should also contain answers to the last three questions relating to key personnel you will draw upon to help you successfully navigate the close of your transaction. Now for many of you that do not hire an M&A advisor, most of the individuals listed in the final three questions will most likely be you and your accountant. If that is true of your situation, you need to be very, very careful and look at the last question listed above closely: How are you going to maintain the ongoing operation of the business while spending anywhere up to 1,000 hours over 9-14 months focusing on a successful sale of the company?
The reality is unless you have a very, very strong management team that you can literally delegate the operations of the company to for up to a year, you will have a hard time closing your transaction without an M&A firm working with you.
Fortunately, the Generational Group is here to offer advice and guidance based on our collective decades of deal making experience. We understand just how challenging closing a deal can be because we have closed well over 500. In fact, we have closed more deals for lower middle-market companies (valued below $100 million) over the past 8 years than any other M&A advisory firm.
Odds are good, if your company meets our revenue and profit criterion, we can also help you. To learn more about us, please use the following links. And if you do have to find a buyer without professional help, be sure to create a solid sell-side checklist.
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2016 Generational Equity, LLC. All Rights Reserved.
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
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
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
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
Thanks again Phil and feel free to have a future client call me if they would like a referral. You are a true professional!Andy Graham, Vice President, Modern Heating & Plumbing
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Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
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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
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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
Bruce and I wanted to take this opportunity to thank Generational Equity for assigning Musa Jagne to our transaction. In Bruce’s words, “Musa did one hell of a job for us!”Karen S. Williams, CFO, BW Manufacturing
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
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
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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.
We are extremely pleased with the way Generational Equity handled the sale of our company. Your associates, Tom and Chris, did an outstanding job of getting us (me) through the process.Michael J Polarek, President, Paragon Packaging
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
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