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10 Tips For The Sell-Side M&A Process


When looking to sell a business, most companies have the same goal in mind: get maximum value for their business. Here are 10 tips for sell-side M&A to help achieve that goal:


1. Get Organized. The first step in selling a business is making sure all its financial and legal information is well organized internally for the due diligence process. *Be sure to share sensitive data through only secure channels.

2. Recast Financial Information. Most companies prepare financial information to minimize their tax burden. Recasting presents a more accurate picture of the company’s value beyond its current management.

3. Establish a Growth Plan. Create documentation that shows how the company will add continued value to a purchaser.

4. Complete a “Readiness Review.” Also called sell-side M&A due diligence, look through all paperwork an acquirer will review, make sure things are in order, and seek outside help if needed.

5. Tackle “Deal Killers.” Address any issues that came to light during a readiness review and decide how they will be handled while negotiating.

6. Choose a Sell-side M&A Strategy. Determine a sales strategy—decide what would be ideal, what would be acceptable and what factors are negotiable.

7. Decide Who Will Stay. The company should consider who will stay on board after its sale and who won’t—especially among executive management. Make a case for how the business will be successful with or without these individuals.

8. Consider an In-Network Purchaser. Often the person most interested in a company will already be aware of the company. Begin the search for a buyer within the company’s executive network.

9. Entertain Competing Bids. The best way to get the most for the company is to have several serious potential purchasers compete to acquire the company.

10. Be Responsive During Due Diligence. Once in the “no shop” zone, its critical to be responsive during due diligence. Share documents securely, quickly and easily through the use of a virtual data room, and respond in a timely and transparent manner to issues raised by the prospective buyer in order to help see the deal all the way to completion.

What additional sell-side M&A tips do you have? Share your favorites in the comments.

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