The Business Sale Process

Entering in to the business sales process without a plan or careful consideration, can be wrought with risk. The Premier Transaction™ accomplishes the fundamental steps of a business sale in addition to sequencing all steps in a structured manner by continually building interest and commitment while maintaining the highest level of confidentiality. We focus is on results rather than just activity. The Premier Transaction™ is specifically designed to achieve extraordinary results while managing risk. The proven methodology of the Premier Transaction™ consistently yields a 75%+ effectiveness ratio of businesses represented to businesses sold. This is three times the industry average. Further, when you engage with us, you are in charge. Throughout each step in the process, we guide you in choosing what actions result in the best outcomes for you.

The Premier Transaction™ is intended to allow you to focus on your business with minimal distractions while following a proven and structured plan to extract the wealth from your business. The Premier Transaction™ process results in obtaining higher values, screening out unqualified buyers while following structured and intentional steps that continually move the transaction towards closing.

The following articulates the major components of the Premier Transaction™ process.

Market Valuation

The market valuation analysis is designed to provide you information you need to make an informed decision about whether to sell, grow or hold your business. Business valuation requires in-depth knowledge of various valuation methodologies coupled with practical deal experience and market knowledge. At Premier, our associates have a thorough understanding of different valuation methods, how they may affect the value drivers and which method or methods are best suited to a particular engagement. Our market valuation analysis utilizes both standard valuation methodologies along with the realities of the current M&A marketplace. During this comprehensive market valuation process, a deep understanding of your business, client base, employees, industry focus, competitors and value drivers is developed. Key to uncovering hidden value and maximizing the value of your business is assessing the strengths and weaknesses of the key value drivers of your business. Typical value drivers include:

• Cash flow, profitability and strength of balance sheet
• Customer types & relationships
• Industry growth trends for key products and services
• Quality and reputation of the business
• Strength of distribution and sales channels
• Intellectual property, such as patents, trademarks and brand name
• Quality of management team or key employees
• Strength of internal systems & processes
• Possible synergies expected from a merger/acquisition by an industry or synergistic buyer
• Barriers to entry or ease of re-creating the business

Finally, consideration is given to the availability and cost of financing for potential buyers. Based upon all of these key factors, we are able to present you a range value your business will likely receive. From this thoughtful and careful analysis, you will learn the real and perceived aspects of your company that enhance your company’s value from the buyer’s perspective.

If after this analysis you should choose not to sell, you will have an in depth understanding of the key value drivers and weaknesses in your business from an objective perspective which is a significant benefit in moving your business forward.

Packaging & Presentation

In the Packaging & Presentation stage of the Premier Transaction™ process, our objective is to present succinct and accurate information about your company accompanied with a compelling value proposition. To create a compelling story, we compile data on critical topics such as:

• Company History
• Industry Overview and Analysis
• Products & Services offered
• Market segment / Customer base
• Competition
• Operations & Systems
• Employees / Personnel
• Facilities & Leasing
• Financial Overview
• Potential for Growth

Data gathered from various industry sources helps to describe your industry, competition and your company’s relative position in the market. Throughout, careful consideration is given to highlighting the unique attributes and value drivers along with bridging areas that may be viewed as potential risks. Once the data is gathered, it is compiled and packaged into an offering prospectus used to tell your story to buyers. We also prepare a number of pieces to be delivered at various stages of buyer interest. These range from a one page offering summary to the complete and detailed prospectus.

Confidentiality is maintained in all marketing materials generated by not specifically identifying the exact business name, location or other unique and identifiable aspects of your business.

The credibility of the materials relies upon faithfully recounting the historical facts (both good and bad) while emphasizing the future potential available for an investor / buyer.

Marketing Your Company

There are two types of buyers: 1) economic buyers – who are primarily interested in generating financial returns through the purchase of a business and, 2) Premium buyers – who recognize the strategic value and the potential to accelerate the value of a business. To sell your business for maximum value, reaching “premium” buyers is a critical step. A premium buyer will place the highest value on your company. Premium buyers actively seek to acquire businesses to: 1) enhance their existing operations, 2) enhance existing suite of products and services to capture additional wallet share from current clients, 3) acquire market share or enter into new geographic markets, and 4) to diversify or manage risk.

Premium buyers are often other companies or individual investors who are a good match for your business and, at the same time, find your business to be a good match for them. They often times are from outside your industry. To attract these buyers, we research the targeted premium buyer’s industry in order to effectively communicate the value of your business to them. Once we compile a list of likely Premium buyers, we develop proactive marketing strategies to reach them. Our pro-active approach to identifying and reaching premium buyers includes internet marketing, direct mail, and various data bases of qualified investors and buyers. Once we identify and select targeted premium buyers, we create and execute a marketing plan that employs various agreed upon marketing techniques. It is natural to assume that presenting an offering price for your business in the offering material is important. Yet in many cases, it is in your best interests to go to market without an asking price.

Why? The value of your company may vary substantially from one buyer to another. Each buyer may have differing circumstances which make an acquisition attractive. Depending largely on each circumstance, one buyer may see value for a given value driver and therefore pay a premium, where another buyer does not. We will work with you to determine the best and most effective approach for your business.

Qualifying Buyers To Maximize The Offer

Whenever possible, we strive to create a ‘market’ with multiple buyers bidding for your business. This created market is beneficial to you in that it increases the possibility of obtaining the maximum value for your company. Having only one buyer does not fully leverage the current strong demand in the market for good businesses. The goal behind creating a market for your business is to generate multiple, high-quality, high-value offers and allow the buyers to bid up the price and ease terms. Yet, having many merely “interested” buyers does not create a “market”. Premier Sales achieves extraordinary results for its clients by placing a strong emphasis on filtering out unqualified buyers. We will not bring buyers and sellers together just to see what happens nor do we rely upon hope. The Premier Transaction™ process is designed to maximize effectiveness by creating a market for your business and generating high quality motivated buyers.

Before we present a buyer prospect to you, we thoroughly vet the prospect to determine their motivations, operational fit, business background, experience, and their financial resources. We also try to thin out buyers who may have expectations that are irreconcilable with yours (for example, You want more cash, they want more terms, or you may want to leave the company immediately after closing, while the buyer may want your services for an extended time). Therefore, when it comes to working with potential buyers, we won’t waste your time meeting with buyers that we do not believe are sufficiently motivated and capable of completing the purchase of your business.

Maintaining confidentiality is critical during this phase of the Premier Transaction™. As noted in the Packaging & Presentation step above, we do not disclose information to potential buyers that specifically identifies your company. Only after we are confident a buyer is truly interested and has agreed, in writing, to maintain confidentiality will we reveal specific details of your business. Once we have identified the most promising buyers, we work with each one to answer questions, highlight the advantages of your offering and do everything possible to nurture their interest in your company.

Negotiation

Negotiation is a critical skill set required in successful transactions. While a given intermediary may have technical knowledge, it is the ability to effectively manage the interpersonal aspects of the involved parties that distinguishes a good intermediary from a great one. At Premier, we operate from a context of respect and integrity for all parties involved. And, we deal with the facts / issues before us in a straight forward manner while respecting the emotions that may accompany such issues. From this context we are able to effectively navigate the often turbulent emotions which surface during the crucial negotiation of a transaction and keep all parties focused upon their stated objectives.

It is during the negotiation stage where deal structure often surfaces. Deal structures can often make or break a transaction. The structure of a sale can have many benefits and consequences to you the seller whether they relate to taxes, risk, or other personal issues. Mistakes in deal structure can significantly erode hard fought value you have been able to negotiate with the buyer. It is therefore critical that you have an intermediary who understands various deal structures and can guide you through the risks/benefits of each as well as suggesting creative solutions to overcome potential deal inhibitors.

Our negotiation experience received from thousands of engagements includes anticipating and investigating seemingly benign questions and requests which when researched further could be actually be a red flag for a potential deal killer. Often, requests between the buyer and seller may seem outrageous. It is our responsibility to vet these requests to determine the actual intention and to present them in a manner which can be understood inside the context and objectives of each party in the deal.

Closing The Deal

By now there is a basic agreement on the key terms of the offering, however, there is still much to be done before the deal closes. Although much information has been exchanged at this point, the buyer ( and third party financing sources) are still trying to determine whether your business stands up to close scrutiny. Many deals can fail at this stage as a result of unexpected issues and misunderstandings, such as representations and warranties.

Premier’s in depth experience minimizes the risk of such last-minute difficulties through being able to identify and anticipate potential issues in advance and propose effective strategies to address them before they snowball into deal killers.

Throughout the Premier Transaction™, milestones and actionable steps are sequenced into the process to continually build commitment and maintain the highest level of confidentiality. Our experience allows us to anticipate potential problems and quickly respond with creative solutions that keep the deal on track. Throughout, we ensure communication stays open between all parties and commitments are being fulfilled by all until the closing where the exchange of value takes place. From start to finish, we remain committed to realizing our clients’ goals by thoroughly and methodically utilizing the Premier Transaction™ process, clients directly benefit from our decades of experience, professionalism and integrity.