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Six Minute Strategist - Mini Guide to Selling a Company mini guide

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This is The Six Minute Strategist Mini Guide to Selling a Company. Visit my website and blog to learn more about Corporate Strategy, Social Media and Business Development - http://jbdcolley.com …

This is The Six Minute Strategist Mini Guide to Selling a Company. Visit my website and blog to learn more about Corporate Strategy, Social Media and Business Development - http://jbdcolley.com
Blog Published December 2010 can found on my website jbdcolley - The Six Minute Strategist
Published under creative commons licence - if you use it please attribute and link back to my site. Thank

Published in Business , Economy & Finance
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  • 1. John Colley - The Six Minute Strategist http://jbdcolley.com The Six Minute Strategist The Six Minute Strategist 1
  • 2. John Colley - The Six Minute Strategist http://jbdcolley.com The Six Minute Strategist Selling A Company A Mini Guide 6MS 2
  • 3. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com Company Sale Planning Preparation PartnersProposal Process Proceeds 3
  • 4. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com Planning Agree core transaction team - adviser, external and internal shareholders - key to managing impact on management and employees Establish the objectives of the sale process Consider the range of options - merger, spin off, sale to strategic partner, sale to financial partner, recapitalisation, acquisition, IPO, status quo Evaluate the approach to the sale process; targeted rifle shot, limited auction, broad auction Agree the objectives of all shareholders and ensure that there is a consensus; management commitment of time to the process is essential; future of management post sale Agree on accounting and legal advisers - appoint when appropriate Planning Core Team Objectives Options Other advisers Consensus Approach 4
  • 5. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com Preparation Establish company positioning and selling thesis Prepare and verify documentation - teaser, information memorandum, financial projections, sale process letter, list of data room contents Prepare management presentation for potential buyers - an opportunity for management to showcase themselves as much as the company Prepare data room for the due diligence process; legal, accounting, environmental, pension, contracts and loan agreements (change of control), regulatory issues Consider PR and internal communication issues Agree timetable for the process - evaluate impact of public holidays and management vacation plans Preparation Positioning Documentation Management PresentationTimetable Communication Data Room 5
  • 6. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com Partners Establish the market positioning of the company Identify and classify its USPs and strategic positioning Match the company to the broad market and compatible segments of the market Identify adjacent categories where the company can offer product, service, geographic or sector extension to a potential partner Screen databases to create long list of potential partners Narrow Long List to Tier A and Tier B short list of potential partners - on a global basis Partners Positioning Company USPs Segment Matching Tiered Short list Long List Segment Extension 6
  • 7. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com Proceeds Evaluate and establish the likely valuation of the company - understand the history, current trading and forecasts along with risk factors Agree in advance the acceptable outcomes of the proceeds - all shareholders to commit to this Discuss and agree the nature of acceptable proceeds - cash, shares, loan notes etc. Different shareholders may have different priorities Consider comparable transactions and valuations Measure against historic investment and valuation Evaluate the ability and inclination to pay against the potential acquisition partners - consider historic transactions, funding, access to capital markets, current balance sheet strength Proceeds Valuation Acceptable Outcomes NAture of Proceeds Ability to PAy Valuation History Comparable Transactions 7
  • 8. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com ProcessContact buyers - identify and contact key executives in buyers, distribute teaser, sign NDA, issue Information Memoranda, answer questions for further information Request indications of interest and value - issue a standard set of terms asking potential partners to scope their proposals within this framework Establish short list of potential partners - negotiate terms with short list - then move negotiations with limited number (1,2 or 3) into due diligence phase, key conditions, evidence of finance (ability to pay) Prepare and issue first draft of sale and purchase agreement - vendors lawyers to prepare - provide access to data room (possibly on a limited basis - data room 1) to potential buyers, management presentations and site visits if appropriate Exclusivity and time table to completion; complete due diligence (data room 2) and finalise negotiations with purchaser. Complete sale and manage communication with external and internal stakeholders - shareholders, management and employees Process Contact Indicative Response Short ListClose Stage 2 DD Stage 1 DD 8
  • 9. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com Proposal Adviser’s Engagement Terms should cover: Monthly Retainer Min Success fee Success Ratchet Reasonable costs and expenses Regular progress reports Fee structure aimed at aligning interests of Adviser with shareholders Proposal Retainer Success Fee Ratchet Alignment of Interest Progress Reports Costs & Expenses 9
  • 10. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com Proposal Retainer Success Fee Ratchet Alignment of Interest Progress Reports Costs & Expenses Unique Proposition Technology Focus Proactive Transaction Management Understanding International experience Market Expertise Planning Core Team Objectives Options Other advisers Consensus Approach Preparation Positioning Documentation Management PresentationTimetable Communication Data Room Partners Positioning Company USPs Segment Matching Tiered Short list Long List Segment Extension Proceeds Valuation Acceptable Outcomes NAture of Proceeds Ability to PAy Valuation History Comparable Transactions Process Contact Indicative Response Short ListClose Stage 2 DD Stage 1 DD 10
  • 11. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com About jbdcolley John Colley has spent over twenty years in investment banking, for the last twelve he has focused on, researched and transacted in the technology sector His approach is proactive and hands-on, offering senior project leadership combined with first class execution He has established his own methodologies and processes for making transaction management efficient and transparent He has developed extensive market knowledge, databases and contacts which are organised in a complex but accessible format John has extensive experience of working with management teams both in the UK and with a wide range of international businesses He understands the priorities and objectives of both management and financial investors as well as the importance of confidentiality Unique Proposition Technology Focus Proactive Transaction Management Understanding International experience Market Expertise 11
  • 12. 6MS John Colley - The Six Minute Strategist http://jbdcolley.com About jbdcolley John Colley Partner IAF Capital Limited www.iafcapital.com Blog: http://jbdcolley.com Twitter: @jbdcolley Unique Proposition Technology Focus Proactive Transaction Management Understanding International experience Market Expertise 12