The process of selling a company is long and exhausting. However, prepared in advance, it can bring great benefits to its owners.
It has at least 5 distinct stages or phases:
Phase 1, o Sale DecisionThe sale of the company is the decision to sell the company and includes the definition of strategy, preparation, and obtaining information through a valuation and professional advice. Realistic sales goals must also be set, both in terms of values and associated conditions and milestones to which a staged sale could be subject.
Phase 2of PreparationAt this stage, a potential list of candidates is drawn up, meaning potential buyers. These can come from the owners' network of contacts, be suppliers, or even clients, as well as come from the extensive network of contacts of specialized firms, such as Valoriza.
Phase 3 from Negotiation.At this stage, contact with potential buyers is ideally made for the first time, although they sometimes arrive before preparation is complete. Financial, accounting, and strategic information is presented to potential buyers in a tactical and planned manner, with the aim of achieving greater negotiating power.
The Phase 4 from Due Diligence, where the review and audit of the company, its accounting and internal information of all kinds is carried out. This stage consists of the verification, by the buyer, that the information received has been reliable.
Phase 5 and final, which is where the the negotiation end in light of the due diligence and the deal is closed in an agreement between the two parties, usually in what is known as an MOU, or memorandum of understandingwhich specifies the terms of the sale, payment terms and other critical aspects of the agreement.
Purchase and sale processes can take between 9 and 24 months., with an average probability of sale within two years ranging from 20% to 60%. The percentage of interested parties who ultimately make an offer ranges from 10% to 20%. A large percentage of offers are made at prices lower than the owners’ asking prices. This is common, but it doesn’t mean you have to accept a lower price! Professional advice can make all the difference.
For this reason, it is essential to have a previous process of valorization The company's value of the company, in order to be able to negotiate with knowledge and clarity with respect to its real value. In addition, professional advice in the sale process will help to avoid problems and risks that may arise when facing a negotiation. In this way it will be possible to maximize the value of a company, negotiate a fair price and reach a beneficial agreement for both parties.
