THE SPERRY, MITCHELL & COMPANY SALE PROCESS
A Tailored Approach
SMC will address many important issues with our clients, including:
- Valuation expectations; potential buyers
- Deal structure; post-closing role of management
- Scope of the marketing effort
- Competitor, customer, and employee sensitivities
- Confidentiality of company information
- Timing (objectives, constraints)
- Depth of management / client participation
Though we tailor our approach for each client’s unique circumstances, we have identified 5 Phases of the Typical Sale Process
SMC Sale Process – Phase 1
Phase 1: Weeks 1-4
Become intimately familiar with our client’s business and its prospects:
- Collect all relevant company data
- Visit facilities
- Understand competitive landscape
- Discuss growth opportunities
- Prepare a detailed Descriptive Memorandum
- Develop a list of potential buyers
- Begin to prepare due diligence data
SMC Sale Process – Phase 2
Phase 2: Weeks 5-9
Approach potential buyers
- Briefly discuss the opportunity with potential buyers on a confidential basis
- Execute confidentiality agreements with interested parties
- Provide the Descriptive Memorandum and other necessary data to interested parties
- Coordinate and facilitate all follow-up questions and requests for additional information
- Generate Indications of Interest, which outline preliminary valuation ranges and structures
- Cull through Indications of Interest to determine which suitors to pursue – separate the serious parties from the “tire-kickers”
SMC Sale Process – Phase 3
Phase 3: Weeks 10-13
Arrange management meetings and facility tours
- Prepare for management meetings
- Coordinate and conduct management meetings
- Manage and arrange facility tours
SMC Sale Process – Phase 4
Phase 4: Weeks 14-16
Solicit and negotiate Letters of Intent (LOI)
Determine which interested parties to pursue based on:
- Valuation / Structure / Timing
- Strategic / Cultural fit
- Chemistry
- Outcome of management meeting
- Integration plans
Decide on a small set of final bidders. Provide justification for a premium valuation. Solicit final offers.
Decide on a buyer and sign an LOI
SMC Sale Process – Phase 5
Phase 5: Week 17 – Onward
Coordinate due diligence and legal documentation
- Facilitate the collection, organization, and presentation of due diligence materials
- Post all due diligence material in an electronic data-room
- Carefully monitor and record the flow of due diligence materials
- Coordinate on-site visits by the buyer’s due diligence teams
- Actively work with each party’s legal and accounting advisors in drafting and negotiating the purchase agreement
- Execute a definitive purchase agreement and close
Since 1986
