Sell-side advisory

Most Fire Protection and Life Safety business owners have spent years building their successful businesses, in most cases it is now their most valuable asset; yet when the time comes to sell their business many owners take a passive approach, as a result they leave substantial money on the table. 

Instead of planning their exit in advance and instituting a formal, competitive sales process, they wait until a life event takes place or they decide they are ready for retirement and then take the best offer from an acquirer that they know or one that has just shown up. They then deal with only that acquirer for the entire process, believing that no one else could possibly pay more for their company.

Selling a business is vastly different than selling any other asset. Every business has a unique value to each and every acquirer. To maximize the value of your business, you need to understand what each acquirer is looking for. 

In a consolidating industry like Fire Protection and Life Safety, there is one certainty that gets played out in most transactions – the amateur versus the professional – the experienced corporate buyer sitting on one side of the negotiating table, and the first-time seller on the other.

The vast majority of Fire Protection and Life Safety business owners sell a business once in their lifetime, while the corporate development officers at acquirers have been buying businesses for decades, sometimes dozens of businesses per year. By implementing a carefully planned process, the seller can significantly shift the odds in their favor and achieve substantially better results, when compared to a passive, privately negotiated sale. 

Many business owners believe that investment bankers, M&A Advisors, and business brokers simply find a willing buyer. In fact, that is only a small part of what an experienced and skilled advisor will do. Finding a willing buyer is the easy part; positioning your company in the best possible way and running a competitive process so that acquirers have to simultaneously bid for the right to acquire your company is what takes skill and experience 

1. NDA

A Non-Disclosure Agreement (NDA) is put in place between MW Givlin and the seller. The NDA protects the seller’s confidential information

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2. Letter of Engagement

When you decide to move forward, you will need to sign a Letter of Engagement (LoE) to retain our services. The LoE clearly lays out all the duties we will undertake on your behalf, as well as our compensation structure.. 

3. Preliminary Analysis

Once we have been formally engaged, we begin a preliminary analysis of your financials and services to better understand your company. We learn about its strengths and weaknesses, composition of your labor force and customer base, your geographic footprint, service offerings, etc. 

4. The Deep Dive

Once the preliminary analysis is complete, we move on to our deep dive. During the deep dive we examine the details that buyers want to know, such as core business operations and policies. We also review the documentation that buyers will want to see. 

5. Confidential Information Memorandum (CIM)

After we have a full understanding of your business details and your objectives, we begin building the CIM. A CIM is the key marketing document and executive summary of your business. The CIM is provided to potential buyers once they have executed a confidentiality and nondisclosure agreement. The CIM showcases your business to potential buyers.

6. Going to Market

After the CIM has been completed and you have signed off on it; we begin the process of choosing potential buyers. Working with you we identify buyers that you may be interested in, buyers that you may not want to sell to, and other buyers that you may not be aware of. Once we have completed this list, we begin reaching out to potential buyers to gauge their interest, get confidentiality and nondisclosure agreements in place, and finally deliver the CIM and a process letter to them. 

The process letter sets a timeline for receiving questions, and a deadline for receiving Letters of Intent (LOI) and includes specific items that should be included in the LOI. Typically, this includes purchase price, timing to closing, key assumptions and due diligence issues, sources of financing, statement of intent, any conditions to close, and finally any additional approvals that may be necessary.

7. LOI Review

After receiving all the LOI’s, we review them with you to determine if any of the LOI’s meet your expectations. We will provide our views on the relative benefits and disadvantages of the competing LOI’s, and if any of them stand out from the rest. We will then make edits to the LOI’s before returning them to the potential buyers in an effort to improve the deal in terms of price, terms and/or legal stipulations. The goal is to get the best overall deal for you.

8. Signed Letter of Intent

Once an LOI is agreed to and signed, the buyer’s Due Diligence will begin.

9. Due Diligence

Due Diligence is the process where the buyer can confirm the information that is represented in the CIM. This information includes the company makeup, finances, operations, integrity of management, and any other details that the buyer needs to confirm to move forward with the transaction. This is a grueling process and entails the sharing of tax records, corporate governance documents, policies and procedures, bank and payroll records, and more. Most of this work is done electronically, and we gather most of the necessary documents during the deep dive phase. We place all this information in a secure data room and represent you during this process. This helps streamline the process and makes it as easy as possible for you.

10. Purchase Agreement and Disclosure Schedules

Once due diligence is complete, the buyer will draft an Asset Purchase Agreement (APA), or Stock Purchase Agreement (SPA).  We will work with your attorney and tax accountant to review, comment on, and edit the APA/SPA on your behalf. All buyers have distinctive agreements with vastly different clauses regarding indemnities, representations, warranties, and covenants. These clauses can also impact your tax planning. 

As part of the agreement the seller will be required to prepare Disclosure Schedules. These are drawn from information that was disclosed during due diligence, including: assets purchased, assets excluded from purchases, liabilities, employee list and compensation details, customer list, insurance policies, claims and lawsuits, etc. We work with your attorney and accountant to put together and finalize these Schedules.

11. Closing

Finally, the closing day arrives. All parties agree on a time to meet, either in person or electronically. All the signed documents are delivered and held in escrow while the seller wires the agreed funds to your bank. After confirmation, from you, of the funds arriving in your bank account, we release the signed documents from escrow. The entire closing meeting usually takes 10-15 minutes.

12. Post-Closing

We can assist in supporting your post transaction wealth management needs, with introductions to leading wealth management and private banking professionals who deal exclusively with high net-worth and ultra-high net-worth individuals. We also continue to support you with any issues that may arise with the buyer post-close.