A sale process starts with the owners’ decisions: what they want to achieve, what they are prepared to transfer and what the business can demonstrate under scrutiny.
Agree what a successful transaction would mean.
A full exit, a partial sale and a partnership for growth are different decisions. Discuss timing, continuing management involvement and the owners’ financial and non-financial priorities before preparing an approach to the market.
Put unresolved issues in writing. Owners do not need every answer at the outset, but they need to know where their objectives differ and which decisions require agreement.
Make the business understandable.
Prepare consistent historical accounts and current trading information. Explain the business model, customer concentration, working-capital pattern, material contracts and dependence on particular people. Distinguish recurring operating performance from exceptional items.
A clear record of the business helps counterparties ask more precise questions. It also allows management to identify missing information before a diligence timetable creates pressure.
Separate the valuation discussion from the proceeds.
An indicative view of value should state its assumptions, methods and limitations. Owners should also understand that a headline enterprise value does not, by itself, describe what shareholders would receive.
The treatment of debt, cash, working capital, contingent payments and transaction costs needs to be considered in the proposed structure. Ask advisers to explain the bridge between the headline figure and the potential proceeds, rather than relying on a single multiple.
Control the sequence of disclosure.
Agree who may contact potential counterparties, what can be shared and when specialist advice is required. Prepare a staged information process, a responsibility map and a realistic timetable. Confidentiality arrangements and document access should be reviewed with qualified counsel.
The preparation phase should end with a decision: proceed, address particular gaps first or postpone. A documented reason for waiting can be as useful as a timetable for launching.
A clearer basis for discussion.
- Owner objectives and transaction perimeter
- Consistent financial and commercial information
- An indicative valuation with stated assumptions
- A staged disclosure and responsibility plan
Sources & scope
BCI Global editorial perspective. The preparation frameworks express BCI’s editorial approach. General business commentary; transaction-specific financial, legal and tax questions require appropriate professional advice.