Selling a Company
Starting Situations for Selling
The motif for selling the company or for selling shares or for searching for additional shareholders can be very different: securing the succession of the company, financing of company growth, spin off, etc. …
The typical situation: Alternatively to the succession regulation inside the family selling the company is a suitable solution to secure business continuance. Possible buyers are strategic investors, family offices or financial investors, possibly combined with a management buy out or management buy in.
Different emotions often influence the selling process: fearing of undermining the social status, cutting off the working places, etc. and on the other hand hoping (good selling price, more time for leisure, on-going business and work…).
- The company grows into a size requiring new equity structures.
- The company growth requires investments or any other kind of financing exceeding the capability of the company and the house bank.
- A group of companies plans to get rid of one of its entities (spin off) because the business of this entity is not in the core business field anymore or because the shareholders simply will make money…
Operational Principles of Selling a Company
Divided into five main steps our operational method secures the very discrete approach to possible buyer circles as well as a professional management of all steps till the closing of the transaction.
- Preparation: A strategic discussion with the client is the starting point of the process. The client’s aims and decision criteria determine the feasibility analysis and the definition of the general set-up.
- Analysis: The collection of facts and data, our understanding of the business concept and the SWOT analysis lead to an anonymous short profile and a sales memorandum. Together with the client we define the search profile which determines the search for suitable target contacts.
- Approach: After approval of the documentation and the target list we begin with the approach and with the anonymous presentation of the company for sale. A confidentiality obligation of the interested party is obligatory for the following disclosure of the identity of the company for sale and for the handing over of the sales memorandum. In a first meeting client and interested party check the willingness to negotiate.
- Negotiation: In a letter of intent both parties fix the result of the negotiations, e.g. the agreement upon the commercial conditions of the transaction structure. The results of the following due diligence carried out by the investor are discussed in further negotiations and determine the wording of the contract.
- Closing: The notarisation as well as the payment of the purchase price and the handing over of the company completes the transaction.