Is it currently a good time to sell my company?
A strong economy, high valuation multiples, low historical interest rates, and buyers flush with cash have created an excellent market for business owners looking to sell in 2022. Prior to engaging with a new client, Prosilio Capital Group performs a preliminary assessment to determine an estimated range of value and the possibility of completing a transaction that meets the goals and objectives of the shareholders. PCG’s senior bankers research and analyze market conditions, relevant industry dynamics, and precedent transactions, and then share this information with the prospect so they can make an informed decision as to whether to move forward with a transaction or to wait for more optimal timing.
Why do I need an investment banker to sell my business?
Owners are adept at building and operating their businesses, but not experts at selling one. Selling a business is often times a complicated, unfamiliar, and daunting task. That is why working with a qualified and experienced investment banker can yield significant benefits. An investment banker manages the transaction process, helps maximize the financial rewards of selling a business, and works to achieve the most optimal terms and conditions that can protect the seller post-closing.
When should I retain an investment banker?
The decision to sell a business is both personal and opportunistic. Planning is critical as there are important steps any business owner can and should take to maximize their company’s value, ensure the smoothest transaction, and protect themselves post-closing, while at the same time minimizing distractions. Before reaching the point of fielding offers from potential buyers, business owners should get help from an experienced investment banker who can suggest important improvements that better position the business for sale and help maximize value received while minimizing post-transaction risk. Any business owner considering a potential sale should engage good advisers to help evaluate the opportunity as thoroughly as possible.
Investment banks offer business owners a number of key benefits including:
· Experience: An investment banker’s knowledge of the market and transaction experience can help a business owner obtain the best price and deal terms.
· Resources: The additional resources provided by an investment bank can shoulder some of the heavy lifting of the sale process, allowing the company’s management team to focus on their day-to-day responsibilities and minimize distractions.
· Objectivity: An investment banker can provide an outside, independent point of view and objective recommendations that can assist the business owner in making an informed decision.
Investment banks assist with many aspects of the sale process including:
· Determine the likely valuation range for the business.
· Evaluate strategic alternatives - does it make the most sense to pursue a 100% sale, partial sale, raise growth capital, or implement key modifications prior to pursuing a transaction.
· Identify, contact, and qualify potential buyers.
· Take the lead in preparing and marketing the business for sale (i.e., create marketing materials that properly frame the business and coordinate management presentations and on-site visits) in a manner that highlights the company’s strengths and minimize its deficiencies.
· Create a competitive transaction process - when potential buyers know an investment banker is involved in a transaction, they recognize and understand upfront the process will be competitive and they can’t take advantage of the company.
· Design and lead the sale process, including interacting with and managing buyers, and keeping all parties on track to meet important milestones.
· Root out parties who are fishing for data and are not truly interested in making an acquisition.
· Give all qualified parties access to the same data in an overlapping time frame, establish clear timelines for certain activities such as management presentations, indication of interest deadlines, letter of intent deadlines, optimize the competitive bidding process, and assist in negotiating the transaction.
· Be tough when necessary - sometimes a deal can have issues and investment bankers are better equipped to fight those battles based on their role in the deal so that the client can maintain a good relationship with the buyer post transaction completion.
· Concurrently negotiate terms and conditions with multiple buyers and structure the transaction to meet the shareholders’ goals and objectives.
· Work with legal counsel to evaluate bids and negotiate the final transaction documents.
· Assist as appropriate in the due diligence process and the successful closing of the transaction.
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