One of the key components of your business-sale strategy is the valuation-- what your company is worth. A number of valuation methodologies are used today, and each is in compliance with the standards set forth by a variety of government organizations.  Our valuations include a proprietary method of calculating the discount rate used in the income value method.  However a strategic buyer may be willing to pay a premium beyond a standard valuation to acquire a unique competitive advantage your company may provide.  Only an experienced professional can help you consider all the factors and possible methodologies to arrive at a maximum valuation.


Phase II: The Decision To Market

Confidential Offering Memorandum (COM)

Once all the data described in steps 1 and 2 are gathered and a Phase II Engagement Agreement is signed, we prepare a cogent document that positively presents your company history and persuasively demonstrates your company’s earning potential. This document, the Confidential Offering Memorandum (COM), must present the facts about your company in a way that is meaningful to buyers, most of whom review sophisticated corporate documents on a regular basis. The COM does this without disclosing price or terms.

Qualification: Identification of Synergistic Candidates

The ability to reach qualified buyers quickly is vital, since market and industry factors can change overnight, and thus influence the terms and final sale price of your company.  Extensive global research capabilities allow Ascend to maintain a database of pre-qualified buyers who are interested in a company like yours. The results of our preliminary research can be found on page seven. We examine many potential buyers to find those candidates who demonstrate a synergy with your company through their business mission, employees, corporate culture and competitive strategies.  Ascend prepares a Confidential Blind Profile for the final candidates. This document gives them a highly focused snapshot of your business.

Confidential Approach to Qualified Prospects

Confidentiality is the critical operative word in honing down a list of buyer candidates. The dissemination of your business-sale information must be handled confidentially.  Ascend assiduously oversees this step to ensure that employees do not become aware of your plans. Targeted companies, which may include competitors, are required to undergo an intensive screening process. Potential buyers must sign a Confidentiality Agreement before they can receive a COM. Once the COM’s are disseminated, the process of further qualifying prospects to arrive at the most desirable candidates requires masterful marketing techniques as your corporate profile is carefully revealed further.

Negotiations

The ideal negotiating scenario for you will begin with multiple, fully qualified buyers. This permits an auction type of atmosphere that tends to maximize the sale price. Still, negotiating with buyers, who are most likely expert dealmakers themselves, requires seasoned professionals, specialists who understand how to focus on value as opposed to price. Also, your buyer may represent a foreign concern, since many foreign operations endeavor to gain entry into U.S. markets through the purchase of U.S. companies.  Your negotiating representative should be able to maneuver through the special issues a foreign purchase involves, while securing immediate access to professional associates in the buyer’s own country.

Deal Structuring - Letter of Intent

Once a serious buyer is identified, the price, terms and other details of a final deal are hammered out. A Letter of Intent (LOI) is the formal document used to set forth the major transaction terms, confirmed in writing in order to prevent misunderstandings. The LOI must put to rest any outstanding issues concerning key employees, financing, legal matters, taxes, etc.  It should also be constructed to protect you from buyer delay’s that can cause you to miss the window of opportunity for your sale.

Due Diligence

During this step of the M&A process, your buyer asks his professional business team to thoroughly evaluate your company. Tax experts, attorneys, accountants and bankers will all scrutinize your company and provide an evaluation to the buyer from their own perspective. Due diligence is an intense process that can surprise many unprepared sellers. Armed with a well-prepared COM, along with full proper and defensible documentation, experienced Ascend intermediaries will see you through due diligence successfully. The questions asked by the buyer’s business team would have been anticipated, ensuring that the deal remains intact and that momentum is maintained.

Ascend strongly recommends that your own professional advisors—attorneys, bankers and accountants—become involved during the early stages of the M&A process. Their understanding of your goals and the circumstances surrounding your M&A transaction will help speed the development of a final Definitive Agreement.  Distilling all prior discussions and documentation down into a single agreement requires thoroughness and attention to details. Once the agreement is written, it is imperative that both buyer and seller carefully review it and understand their mutual obligations.

Definitive Agreement

When you have determined that the goals for the sale have been met and the buyer is satisfied with the deal structure, the Definitive Purchase Agreement is signed.  This facilitates the transfer of company stock and/or assets to the buyer. Throughout the first nine steps of the business-sale process, Ascend effectively guides you to ensure a smooth transition of ownership. Issues concerning the integration of your company, corporate style and employees with the buyer’s style and employees have been fully analyzed and resolved, anticipating the ownership transition.

Closing and Transition to New Ownership