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Sell Side M&A

A Look at the Sell Side M&A Process

SEA provides investment banking services to entrepreneurial companies with EBITDA ranging from $1 million to $10 million, with an industry focus on Life Sciences, Business Services and Manufacturing & Distribution sectors. Our tailored process is the same investment banking process that bulge bracket Investment Banks use for large national and international companies.

SEA’s Three-Step Sales Process

Step 1 has two parts. In Part One, we develop the one page Blind Offering Memorandum (or “BOM”), and the Confidential Information Memorandum (or “CIM”, also known as “The Book”). In Part Two, we assemble a list of 100+ potential buyers, mostly strategic buyers but some financial buyers, as well. A portion of these are not likely buyers, but we like to cast a wide net in order to obtain referrals to additional buyers we hadn’t considered.

Once we have the assets from Step 1 in place (BOM, CIM, and Buyer List) we reach out to the CEOs of the companies on the target Buyer List with the BOM. Often, we need to reach out several times, and if the CEO isn’t responsive, we’ll try contacting the CFO or a Business Development person.

This is Step 2 and it culminates in one-on-one management presentations to a handful of serious suitors who have each signed an NDA, read your CIM, and shown they have the financial wherewithal to consummate a deal. (Importantly, you can always reject any prospective buyer at any point in the process.) About two weeks after the presentations, we expect IOI’s. Two weeks later, after you’ve gotten the answers to your questions, you pick the winner and we negotiate the LOI.

Step 3 is all about due diligence, drafting the purchase agreement, and getting the deal across the finish line.

Sell Side Facts

  • It’s a process. It takes time. If someone tells you it’s an easy process, or a fast one, they’re not being honest with you.
  • Time kills deals. As stated above, it’s a long process. Slowing it down for any reason is to be avoided at the cost of deal fatigue, and unexpected exogenous factors that can ruin or postpone a deal indefinitely. This race is both a marathon and a sprint at the same time!
  • Culture is a big deal, for both parties. If the cultures of the buyer and seller don’t align, the post-integration merger is doomed.
  • The only way this gets done is as a team. One of our company’s core values is, “Remember, M&A is a team sport.” That means working closely with you, the entrepreneur, and also your other trusted advisors (accountants, lawyers, wealth managers and so on). This is a highly collaborative process and we email or speak with our clients nearly every day during it.
  • It’s very emotional, especially if it’s your first time. If you don’t believe it, read some of the interviews we’ve done with other entrepreneurs who have exited.
  • There are numerous challenges throughout the process. We anticipate challenges in advance and will help you navigate through them to a successful close.
Strategic Exit Advisors