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John Colley - The Six Minute Strategist http://jbdcolley.com
The Six Minute
Strategist
The Six
Minute
Strategist
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2.
John Colley - The Six Minute Strategist http://jbdcolley.com
The Six Minute
Strategist
Selling A Company
A Mini Guide
6MS
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3.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
Company
Sale
Planning Preparation
PartnersProposal
Process Proceeds
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4.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
Planning
Agree core transaction team - adviser,
external and internal shareholders - key to
managing impact on management and
employees
Establish the objectives of the sale process
Consider the range of options - merger, spin
off, sale to strategic partner, sale to financial
partner, recapitalisation, acquisition, IPO,
status quo
Evaluate the approach to the sale process;
targeted rifle shot, limited auction, broad
auction
Agree the objectives of all shareholders and
ensure that there is a consensus; management
commitment of time to the process is
essential; future of management post sale
Agree on accounting and legal advisers -
appoint when appropriate
Planning
Core
Team Objectives
Options
Other
advisers
Consensus Approach
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5.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
Preparation
Establish company positioning and selling
thesis
Prepare and verify documentation - teaser,
information memorandum, financial
projections, sale process letter, list of data
room contents
Prepare management presentation for
potential buyers - an opportunity for
management to showcase themselves as much
as the company
Prepare data room for the due diligence
process; legal, accounting, environmental,
pension, contracts and loan agreements
(change of control), regulatory issues
Consider PR and internal communication
issues
Agree timetable for the process - evaluate
impact of public holidays and management
vacation plans
Preparation
Positioning Documentation
Management
PresentationTimetable
Communication Data Room
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6.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
Partners
Establish the market positioning of the
company
Identify and classify its USPs and strategic
positioning
Match the company to the broad market and
compatible segments of the market
Identify adjacent categories where the
company can offer product, service,
geographic or sector extension to a potential
partner
Screen databases to create long list of
potential partners
Narrow Long List to Tier A and Tier B short
list of potential partners - on a global basis
Partners
Positioning
Company
USPs
Segment
Matching
Tiered
Short list
Long
List
Segment
Extension
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7.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
Proceeds
Evaluate and establish the likely valuation of
the company - understand the history, current
trading and forecasts along with risk factors
Agree in advance the acceptable outcomes of
the proceeds - all shareholders to commit to
this
Discuss and agree the nature of acceptable
proceeds - cash, shares, loan notes etc.
Different shareholders may have different
priorities
Consider comparable transactions and
valuations
Measure against historic investment and
valuation
Evaluate the ability and inclination to pay
against the potential acquisition partners -
consider historic transactions, funding, access
to capital markets, current balance sheet
strength
Proceeds
Valuation
Acceptable
Outcomes
NAture of
Proceeds
Ability
to PAy
Valuation
History
Comparable
Transactions
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8.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
ProcessContact buyers - identify and contact key
executives in buyers, distribute teaser, sign NDA,
issue Information Memoranda, answer questions
for further information
Request indications of interest and value - issue a
standard set of terms asking potential partners to
scope their proposals within this framework
Establish short list of potential partners -
negotiate terms with short list - then move
negotiations with limited number (1,2 or 3) into due
diligence phase, key conditions, evidence of finance
(ability to pay)
Prepare and issue first draft of sale and purchase
agreement - vendors lawyers to prepare - provide
access to data room (possibly on a limited basis -
data room 1) to potential buyers, management
presentations and site visits if appropriate
Exclusivity and time table to completion; complete
due diligence (data room 2) and finalise negotiations
with purchaser.
Complete sale and manage communication with
external and internal stakeholders - shareholders,
management and employees
Process
Contact
Indicative
Response
Short
ListClose
Stage 2
DD
Stage 1
DD
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9.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
Proposal
Adviser’s Engagement Terms should cover:
Monthly Retainer
Min Success fee
Success Ratchet
Reasonable costs and expenses
Regular progress reports
Fee structure aimed at aligning interests of
Adviser with shareholders
Proposal
Retainer
Success
Fee
Ratchet
Alignment
of Interest
Progress
Reports
Costs &
Expenses
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10.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
Proposal
Retainer
Success
Fee
Ratchet
Alignment
of
Interest
Progress
Reports
Costs &
Expenses
Unique
Proposition
Technology
Focus Proactive
Transaction
Management
Understanding
International
experience
Market
Expertise
Planning
Core
Team Objectives
Options
Other
advisers
Consensus Approach
Preparation
Positioning Documentation
Management
PresentationTimetable
Communication Data Room
Partners
Positioning
Company
USPs
Segment
Matching
Tiered
Short list
Long
List
Segment
Extension
Proceeds
Valuation Acceptable
Outcomes
NAture of
Proceeds
Ability
to PAy
Valuation
History
Comparable
Transactions
Process
Contact
Indicative
Response
Short
ListClose
Stage 2
DD
Stage 1
DD
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11.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
About jbdcolley
John Colley has spent over twenty years in
investment banking, for the last twelve he has
focused on, researched and transacted in the
technology sector
His approach is proactive and hands-on, offering
senior project leadership combined with first class
execution
He has established his own methodologies and
processes for making transaction management
efficient and transparent
He has developed extensive market knowledge,
databases and contacts which are organised in a
complex but accessible format
John has extensive experience of working with
management teams both in the UK and with a wide
range of international businesses
He understands the priorities and objectives of
both management and financial investors as well
as the importance of confidentiality
Unique
Proposition
Technology
Focus Proactive
Transaction
Management
Understanding
International
experience
Market
Expertise
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12.
6MS
John Colley - The Six Minute Strategist http://jbdcolley.com
About jbdcolley
John Colley
Partner
IAF Capital Limited
www.iafcapital.com
Blog: http://jbdcolley.com
Twitter: @jbdcolley
Unique
Proposition
Technology
Focus Proactive
Transaction
Management
Understanding
International
experience
Market
Expertise
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