How do you start identifying buyers?

·         If you want to maximise your value you need to have numerous potential buyers for an auction process, so talk to a corporate finance (CF) advisor.

·         You can contact two or three potential acquirers you know, invite them to look at the business, and take it from there – the risk is you don’t maximise your value, but is cheaper than getting a CF advisor and following that process.

What’s the role of a CF advisor?

·         To prepare the company for sale – write an information memorandum, ensure forecasts for future performance stand up to scrutiny, prepare presentations for potential acquirers, source potential acquirers and make sure management time on the process is kept to a minimum.

How do you ensure your advisor will be good at finding buyers?

·         Advisor should have a good understanding of the sector you are in.

·         Your team must get on with the advisor, as they become a member of the team for at least six months.

How do you get the auction process going?

·         Get potential buyers to a stage where they are comfortable with the business, and they feel happy to put in an offer and then set a timetable.

·         Don’t put together an artificial, rigid timetable too early and put buyers off.

How do you go about asking competitors?

·         You can approach competitors and not mention your company name, but it will have to come out at some point.

·         Details of your company will need to be shown to the competitor for them to be comfortable to make an offer; there are measures you can take to ensure they are serious.

What’s the difference in process between an auction and a preferred buyer?

·         You first get your range of offers, filter them down to the serious bidders and then collect your bids.  You then have choices:

○      Ask for better offers and have further rounds of bidding

○      Choose one bidder, then negotiate exclusively with that buyer.