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Working with M&A Advisors
Professional M&A advisors can be a big help in selling a company. However, they do need a willing seller who will work with them in the following areas:
- Provide access to key employees. Sellers can be so concerned about confidentiality that they fail to even tell their top management about a potential sale. This may prevent the advisor from gathering some necessary information.
- Communicate. It is vital that the seller return calls and emails from the advisor on a timely basis. The advisor is the conduit between the buyer and seller.
- Provide complete information. The preparation of the offering document needs to be completed as quickly as possible so the selling process can begin. When a seller does not have the necessary information readily available, the process slows down. This is also true of quarterly or end-of-year updates. Some areas that sellers commonly fail to have at the ready are: financial projections, competitive information, growth strategies, equipment lists, analysis of sales, competitive advantages, etc.
- Let the M&A advisor do his or her job. One aspect of the advisor's job is to identify all of the potential buyers. One thing the seller can do to help is to inform the advisor of all of the possible candidates that the principals in the company can think of.
- Include the M&A advisor in all meetings and discussions pertaining to the selling process. It is critical that the seller include all of his or her business transaction team -- including attorneys, accountants and the M&A advisor -- in all meetings concerning the selling process.
- Remember that finding a buyer is just one step, not the end of the process. Sellers are inclined to stop including the advisor in meetings after a suitable buyer is found. The advisor has probably spent considerable time with the buyer and built a good relationship. This relationship may smooth over any problems that might develop later in the process (due diligence, financing, definitive purchase agreement), so keep your M&A advisor involved.
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If you are thinking of selling your company someday, here is a sample outline of an Offering Memorandum. This will typically be a 30-50 page document, depending on the size and complexity of the company.
- Executive summary
- Investment considerations & market opportunity
- Financial overview
- Company history
- Business overview
- Market overview
- Financial statements & recasting analysis
- Supporting documents
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M&A Integration: Making the Acquisition Successful
Webinar presented by Austin Dale Group
Over half of all mergers and acquisitions fail to live up to expectations. In this presentation we'll explore some important integration principles for increasing the odds of success. Attendees will learn some tips for jump starting integration even before the deal closes, emphasizing the areas of strategy, systems, operations, and culture.
If M&A is, or will be, part of your growth strategy, there's considerable pressure to get it right and reap value from your investment. Join us to start learning how to better prepare for and execute the integration before and after a company acquisition or merger.
Date: September 12, 2013 (Thursday)
Time: 11 AM Central / 12 PM Eastern
Click below to register, seating is limited:
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 Summer is an interesting time for private company M&A deals. As many owners and deal makers go on vacation, deal activity usually slows down until the kids go back to school. That gives us a chance to compare the first half of this year to last year, and project what might happen in the second half of the year. If one overlays graphs of M&A deals in 2012 and 2013, the patterns are quite similar. The biggest difference is that deals cooled off sooner this year - before summer arrived. Last year, deal volume increased in early August, which is earlier than usual. Will the same happen this year or will new deals wait until after Labor Day? Some firms, such as Ernst & Young, believe that deal flow will remain in decline compared to 2007 and may not come back to the same level for several more years, despite the presence of many healthy companies and low interest rates. On the other hand, AxialMarket, a leading web community for M&A professionals, reported that many intermediaries are projecting a return to a more normal environment in the second half of 2013. Come September and October, we'll start to see who is right. Austin Dale Group is an M&A advisory firm that specializes in technology companies. We welcome your inquiries and appreciate your referrals. 
John Austin & Bob Dale
512-327-0427
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| Have You Fallen into the Mile-Wide Trap?e |
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If your company's revenue has stalled after a period of rapid growth, you may have fallen into The Mile Wide Trap. Consider the case of Kim (not her real name) who runs a public relations firm. Click here to read the entire blog...
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Tell the Buyer What You Would Like in the Letter of Intent
Following is a list of items that should be included in a letter of intent (offer to purchase). You will want to communicate to the buyer that each of these items needs to be included and clearly defined.
The price and terms
The form of purchase
- Stock or asset sale?
- What is the assumption of what the assets and liabilities are?
- Exactly what is being purchased and what is not?
The structure of the sale
- Cash?
- Notes payable?
- Stock?
- Non-compete and/or consulting agreements?
- Contingencies?
Management contracts
- For whom?
- What duration?
- What incentives?
Closing costs and responsibilities of buyer and seller
- Include items such as due diligence, title searches, and intellectual property protection
Brokerage fees
Timing for completion
- What is the drop-dead date for due diligence?
- What is the drop-dead date for financing?
- What is the time frame before the exchange of money?
- What is the time frame for the final closing?
Statement that this is a non-binding agreement subject to satisfactory due diligence by both parties
Stipulation of confidentiality from the buyer
- This includes a promise from the buyer that he or she will not disclose information about the business or the seller to outsiders.
- This also includes a promise that the buyer will not disclose that negotiations are underway.
- It needs to be clear that a breach could cause the seller to sue the buyer.
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