Introduction
Following on from our last article, ‘What does a Corporate Finance Adviser do when buying a business’, here we address the role of the Corporate Finance adviser on the opposite side of the deal – when selling a business.
Selling a company is a complex and often overwhelming task that needs careful planning and expert management. Whether you’re selling to maximise returns, retire, or pursue new ventures, the process involves navigating intricate financial, legal, and operational challenges. A Corporate Finance adviser plays a critical role in this process, providing expertise and strategic guidance to ensure that the sale goes smoothly and achieves the best possible outcome.
Corporate Finance advisers specialise in managing the entire sale process, from evaluating the business’s value to finalising negotiations and closing the deal. Their expertise not only helps maximise the sale price but also reduces risks, allowing owners to focus on their ongoing operations.
Conducting an Initial Assessment and Valuation
One of the first steps in selling a company is understanding its true market value. A Corporate Finance adviser starts by conducting a financial assessment, reviewing the company’s financial performance and cash flow. They also assess the broader market, looking at competitors, industry trends, and future growth prospects.
This analysis allows the adviser to establish a realistic valuation range for the business. Valuation is more than just numbers; it’s about understanding what the market may be willing to pay for the company, considering factors like its assets, market position, and potential for future growth. A well-supported valuation aligns expectations and positions the business to attract serious buyers.
- Preparing the Business for Sale
Once the valuation is established, a Corporate Finance adviser helps to get the company in the best shape for a sale. Advisers will review key financial, legal, and operational documents to identify potential issues.
In some cases, the adviser may recommend strategic adjustments to make the company more appealing. This might involve restructuring certain departments, boosting profitability, or addressing outstanding liabilities or perceived risks. By optimising the company before presenting it to buyers, the adviser can help enhance its attractiveness and, ultimately, its value.
- Marketing the Company to Potential Buyers
Marketing the company effectively is crucial to finding the right buyer. Corporate Finance Advisers develop targeted marketing strategies that highlight the company’s strengths, growth potential, and competitive advantages. They create professional marketing materials, including a detailed Information Memorandum, that outlines the key aspects of the business.
One of the most important aspects of this phase is maintaining confidentiality. Advisers are experienced in managing the sale discretly, so sensitive business information is only shared with serious, qualified buyers. The adviser’s goal is to attract the right buyers—whether they are strategic acquirers, private equity firms, or other investors—while safeguarding the company’s day-to-day operations.
- Managing the Sale Process
Throughout the sale process, a Corporate Finance adviser acts as the intermediary between the seller and potential buyers. They screen potential buyers to check they are financially capable and genuinely interested in acquiring the business. Once interested buyers are found, the adviser facilitates meetings, manages discussions so the negotiations are professional and fair.
When offers are made, the adviser plays a crucial role in assessing the deal structures. They help the business owner evaluate each offer not only in terms of price but also considering other factors such as payment terms, contingencies, and any ongoing involvement in the business. Their goal is to ensure that the deal maximises value while aligning with the owner’s objectives.
- Overseeing the Due Diligence Process
Due diligence is one of the most rigorous phases of the sale process, during which potential buyers closely examine every aspect of the business. This can include reviewing financial records, customer contracts, employee information, and legal documents. The Corporate Finance Adviser, together with the appointed lawyer, manages this process, coordinating the flow of information between the seller and the buyer helping the process to move forward smoothly.
Advisers work to anticipate and resolve any issues that arise during due diligence, keeping momentum going and preventing delays. Their experience in managing due diligence means the process is thorough but efficient, reducing the risk of potential roadblocks.
- Finalising the Sale
As the sale reaches its final stages, a Corporate Finance adviser works alongside legal advisers to review commercial and financial aspects of the legal agreements that formalise the transaction.
Advisers also supports legal advisers with closing activities. If there are post-sale transition plans—such as the former owner staying on in an advisory role—the adviser can help negotiate and manage these terms for a smooth handover.
- Why Engage a Corporate Finance Adviser?
You may wonder if hiring a Corporate Finance adviser is really necessary when selling your company. While some owners might consider managing the sale themselves, there are several compelling reasons to engage an experienced adviser:
- Complexity of the Process: Selling a business involves many intricate steps, from valuation to legal agreements. Advisers have the expertise to navigate these complexities.
- Maximising Value: Advisers know how to position your business to increase buyer interest and secure the best sale price.
- Time and Focus: Selling a company is a time-consuming process. With an adviser handling the details, you can focus on running the business with less distraction.
- Access to a Wider Pool of Buyers: Corporate Finance Advisers have extensive networks and can reach out to potential buyers you may not have access to otherwise.
- Negotiation Expertise: Advisers are experienced negotiators who can help you get the best realistic deal possible, not just price but also terms and conditions as they have the experience to know what can be achieved.
- Mitigating Risk: Advisers help identify potential risks early in the process and work to resolve them before they become bigger issues, protecting your interests.
- Conclusion
Selling a company is a complex journey that needs expertise, careful planning, and strategic decision-making. Engaging a Corporate Finance Adviser can be one of the most valuable decisions you make during this process. Their experience in managing the sale, understanding market dynamics, and negotiating favourable deals can help you achieve a better outcome while minimising risks.
With a Corporate Finance Adviser handling the sale process, you can stay more focused on maintaining business performance, confident that the transaction is in the hands of a professional who is dedicated to securing the best results for you and your company.
At Langtons Chartered Accountants and Business Advisers, we have a dedicated Corporate Finance team that specialises in guiding business owners through the sale process. With experience in advising over a substantial number of owner-managed business on successful exits, we understand that the sale of your business is far more than a transaction. It is often the culmination of a lifetime of work and close personal relationships. In terms of transactions, a business sale is probably the most emotive for a business owner. Having a trusted and experienced advisor working alongside you and representing your best interests at every stage of the process can be transformational to the outcome.
If you’re considering selling your business, please reach out to our Corporate Finance team for a no obligation exploratory chat and some initial advice.
Contact Information:
- Website: langtons.uk.com
- Telephone: +44 151 236 3399
- Address: Langtons Chartered Accountants & Business Advisers, The Plaza, 100 Old Hall Street, Liverpool, L3 9QJ
- Key Contacts:
- Andy McCall, Corporate Finance Partner – Email: andymccall@langtons.uk.com
- Simon Mills, Corporate Finance Partner – Email: simonmills@langtons.uk.com
- Alice Gregan, Corporate Finance Director – Email: alicegregan@langtons.uk.com
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