AURIS Finance is an independent corporate finance advisory firm
7 key steps for the sale of a company
AURIS Finance is fully committed
- A tailored approach
- A dedicated team led by an industry expert
- A precise definition of the transaction’s parameters based on your wishes
- A structured and dynamic process to approach relevant buyers
- A controlled auction process with the potential buyers to optimize sale conditions
Definition of the sale project
Understand the motivation of the seller
Retirement is by far the main reason why a CEO wants to sell his company: it represents more than half of the sales of small and mid-cap companies. The seller may also want to change activity or develop new projects. Other more personal reasons can be involved: residence move, financial difficulties, and health or tax issues.
Listen to the seller’s expectations
The sale and its procedures will not have the same calendar depending on the motivation of the seller: two years can be required for a successful company transfer. The appropriate moment depends on internal factors (the profitability of the company, the growth opportunities) and external factors (current state of the economy, competitive environment).
There are also the conditions of the sale (full or partial sale, immediate or progressive) and the final price that should be taken into account. It can also be a matter of family transfer of the company.
At Auris Finance, we support CEOs during the whole sale process and we help them handle the possible issues of such an operation.
Objectives of the definition of the sale project
- Identify the motivations and the expectations of the seller
- Choose the appropriate moment to sell
- Prepare the CEO to the position change due to the sale
Understand the motivations of the seller
- Retirement
- New project construction
- Change in personal life
Listen to the seller’s expectations
- Sale agenda
- Transaction considerations
- Expectations of the selling price
Strategic analysis of the company
Collect key information to understand the company, its organisation and its market
Many documents must be gathered by the CEO, to help the global comprehension of the company: activity, means of production, distribution process and position on the market. We analyse the internal strategy of the company such as the location, supply location, the organisation chart, and also the external environment: competitors, regulations, etc. The buyer cares about the products and services line, the current strategy of the company, and the type of customers.
Establish a diagnosis of the company
The collection of information enables us to make a first diagnosis of the company which highlights the quality of the case and the aspects we will promote to potential buyers. The latter are trying to limit the risks by investing in companies that are able to make profits, with added-value products and a stable customer base. Some weaknesses of the company can be adjusted at this stage if necessary.
Objectives of the strategical analysis of the company
- Understand the operation, the environment and the short & mid-term development of the company.
- Place the company on its market
Collect critical information to understand the company, its organisation and its market
- History, business model, services offer, market, etc.
- Human, technical and financial means
- Type of business partners (customers, suppliers, etc.)
- Strategy set up by the company
- Legal and statutory information
Establishment of a company’s diagnosis
- Estimate the value of the company
- Determine the tax effect of the sale
- Highlight the company’s key elements
Financial valuation and establishment of the sale case
Analysis of the last detailed financial statements and projections on the current period
A thorough analysis of the financial statements will enable the good comprehension of the company. During work meetings, we exchange with the executive and the head of the financial department to determine a normative business year. It enables the buyer to project himself as the head of the company. It corresponds to the company’s results obtained in normal conditions of exploitation of the activity, removing exceptional items: non-recurring expenses, executives’ remuneration, leasing, etc.
Financial valuation according to methods recognized by the sector
The “normative” exercise allows us to refine our analysis and move towards an objective financial evaluation. For that we use methods proven by the profession and recognized by the buyers of the sector. This last point results in particular from the good knowledge of the industry by AURIS Finance experts and the latest transactions carried out by the firm.
Presentation of the valuation report
At the end of this process, we are able to present to the CEO our valuation report. During this presentation, we detail the methods used, the selected assumptions, and the price range. Value we are able to defend with potential buyers.
Objectives of the financial valuation of the company
- Analysis of the last detailed financial statements and projections on the current year
- Financial valuation according to methods recognized by the profession
- Establishment of a valuation report
- Analysis of the tax effects of the operation
Analysis of the last detailed financial statements and projections on the current year
- Understanding of the economic model of the company, reconstitution of a normative exercise
Financial valuation according to methods recognized by the profession
- Preparation of the financial valuation from normative exercise
Presentation of the valuation report
- Delivery of the valuation folder with our comments
Optimisations of the sale modalities
Outline the sale
The type of company transfer must be outlined as it has tax and legal consequences for which specific competencies may be required. There are 3 main types of sales: the business capital sale, some or all shares sale, and the asset sale. If most of the operations concern shares sale, modalities are determined case-by-case, after a deeper study.
Outline the potential buyers’ profile
A target screening is elaborated by the seller and Auris Finance to establish a list of potential buyers.
We can provide alternative solutions that can also be analysed through financial engineering solutions such as LBO, MBO, OBO, etc.
Elaborate the strategy
Auris Finance contacts the executives of companies targeted by the seller. Auris Finance’s expert, as a former executive, implements a peer to peer relationship with potential buyers.
Objectives of the sale outline
- Understanding the legal and fiscal outline of the operation
- Preparation of a list of potential buyers
- Optimisation of the chances of success in the sale
Outline the sale
- Business capital sale
- Shares sale (social shares or stocks)
- Sale of a part of the assets/activity
Outline the potential buyers’ profiles
- Determination of a list of selected potential buyers
- Validation of the list with the seller
Implement a strategy method
- First contact with Auris expert
Contact with buyers
Contact targeted potential buyers
Once we have identified targets, we contact buyers by sending them an anonymous teaser of the company with key information. Targets are selected from: our “buyers’ book”, our database of investors, our business network and other research.
Send the Information memoranda after receiving the signed NDA
Buyers that were contacted and that express an interest are given more information on the company through the Memorandum prepared by Auris Finance. They must sign a Non-Disclosure Agreement to have access to this document. Auris Finance is in charge of the sending the documents, answering the buyers’ questions, and organising the meetings of presentation with the seller.
These meetings hold by Auris Finance’s team, give a better understanding on the expectations of both parts tackling the price and the schedule of the operation.
Objectives of buyers approach
- To identify serious buyers among buyers contacted
- To confirm the possible operation with potential buyers
Contact targeted potential buyers
- To send a first synthetic document on the company to sell
To send the presentation document after receiving the Non-Disclosure Agreement
- Non-Disclosure Agreement on the information provided by Auris Finance
- Sending of the Information memoranda
- Physical meetings between the seller and the potential buyers held by Auris Finance
Negotiations of the sale’s conditions
Look after the best bid and negotiate side by side with the seller
We set up an agenda for the buyers who want to make a preliminary bid (Letter Of Intent) in the perspective of a competition. Our expert, side by side with a senior analyst, check that the received offers cover the principal factors of the future operation and inspect carefully the criteria of the sale.
We operate directly with buyers and their advisors to negotiate the criteria of the offer we defend: price, assets and liabilities guarantee cap, supporting conditions, etc.
Selection of the best offer with the seller
The expert makes a comparison document of the received offers to help the seller in his decision. The experience of our expert helps to integrate components different from the price, in particular the considerations of continuity of the company.
Objectives of the negotiation of the sale’s conditions
- To define the elements of the Letter of Intent
- To choose the more suitable offer for the company and its shareholders
Look after the best bid and negotiate side by side with the seller
- Definition of an agenda with a deadline for the offers
- Collection of the LOI of buyers
- Negotiation of the LOI defending the interest of the seller
Selection of the best offer with the seller
- Help with the decision to meet the seller’s needs
- Set-up of a comparative document of offers
Audit and signature of deed of assignments
Organisation of audits and implementation of the data room
After the signing of the LOI, the buyer realises audits to make sure that information that were communicated were true. We are responsible for the organisation of the due diligence and the implementation of a secured data room, to keep the operation confidential.
We operate in support of executive and its advisors to answer auditors’ questions.
Negotiation of sensitive clauses of deed assignments
Auris Finance support the seller in the comprehension of legal documents and the elaboration of appendix related to the sale’s contract and to the assets and liabilities guarantee cap.
We negotiate in collaboration with our customers’ advisors, lawyers, and expert accountant, the main clauses of deed of assignments until the end of the transaction.
Objectives of the support during audits and negotiation of deeds
- Control the good execution of the sale’s process until the finalisation of the operation
- Support seller’s interests
Preparation to audits
- Organisation of the audits among various participants
- Implementation and management of an electronic and secured data room
Negotiation of deed of assignments
- Negotiation of the sale’s agreement
- Negotiation of the assets and liabilities guarantee cap
- Negotiation of related documents: employment contract, service agreement, shareholders agreement
Customer reviews
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Sole advisor of the seller
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