The Mergers & Acquisition Process

The Mergers & Acquisition Process

Going to Market

What information do I need to provide to get started on marketing my company?

See Video:  10 Ways to Prepare Company for Sale.

We will need the following:

  1. A Completed Valuation questionnaire
  2. Copy of the Company’s last filed Tax Return
  3. Profit & Loss Statements and Balance Sheets for the previous 3 years
  4. A conversation regarding the Personal Expenses and Non-recurring costs related to the most recent set of financials
  5. Detailed overview, description, and history of the Company:  Including ownership structure and an organizational chart of the company personnel
  6. Your Company Logo

What type of buyers will look at my business?

Strategic: A Strategic buyer is a corporation or a large organization providing similar services as a target asset. Strategic Buyers tend to move slowly towards a Letter of Interest (LOI), but are much quicker to accomplish due diligence and enter into a purchase agreement than other buyer types.  Strategic Companies care more about increasing market share than profitability.  They will look to consolidate the general, marketing, and administrative aspects of your business in order to reduce overhead or fixed costs.

Financial: Financial firms focus on return of investment. They utilize an arbitrage model of buying, building, and generating a higher return on investment through a sale.  Financial firms tend to be Private Equity firms (aka Financial Sponsors), however there are also search funds and family offices.  A financial buyer will quickly put an offer together, but tend to be very slow when it comes to diligence and definitive agreements.  These buyers are great for businesses generating over 2MM of EBITDA.  Financial firms often work with sellers who would like to be part of the future growth of the company, while still getting some cash for what they have built.

Independent: This is a term we created to define a large batch of buyers that don’t fit into the other categories.  Independents are modestly-sized and act more like strategic buyers.  They purchase entities as the primary business or vertically integrate the business into another healthcare platform.  In some cases, these buyers are looking to transition from operations senior management into equity ownership.  These are usually only buyers for smaller companies.

When can I expect to receive offers? 

Offers typically materialize 4-5 weeks after starting the marketing process.