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Grooming your business for sale
Q: What is the role of a financial adviser in selling your business and what skills should a company look for when choosing a financial adviser?
The main role of a financial adviser is to act as the “project manager” and lead the team through the sale process, providing the right advice and decisions whilst acting as trusted advisors.
Once engaged to sell a business, the corporate finance advisors will design an appropriate sales strategy tailored to the shareholder’s requirements. This strategy will cover all options from a trade sale through management buyouts/buy-ins to flotation on a recognised stock exchange and tailor a suitable option.
The corporate finance advisors will then use their expertise to calculate a range of valuations of the business, to assist with price expectation and then take responsibility for the preparation of the sales Information Memorandum (“IM”).
Further tasks performed by the advisors are:
- To agree a list of target companies
- To market the IM on a completely confidential basis
- To select a shortlist of two-three prospective purchasers
- To enter detailed negotiations on the shareholders’ behalf and achieve the best end result
- To work alongside the appointed lawyers to assist in the preparation of the Heads of Agreement and the Sale and Purchase Agreement with the potential purchaser
- To assist the potential purchaser their legal, financial and other advisors during the due diligence stage
- To ensure the transaction completes smoothly and according to plan
When selecting corporate finance advisors a potential vendor should look for a reliable, trust worthy and proactive firm with a good reputation and a proven track record when dealing with transactions. It is important that the advisors have an appropriate and dedicated team with in-depth experience and expertise to ensure the vendor’s needs are met and all areas of the transaction are appropriately covered including audit, tax, pension or other financial issues.
The vendor could research both the internet and press cuttings to check the competency of the proposed advisors.
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