Understanding the process and steps that go into a mergers and acquisition transaction can help you demystify the deal making process. From the initial stages of planning and strategy to the final stages of integration and synergy, every step in the merger and acquisition process plays a crucial role. KREA has a proven 11-step process that we guide our clients through.

These initial meetings are to get to know each other, your objectives and assess the readiness for a successful exit. We will educate you on our proven process to sell a business and on our engagement model. 

We also would get a better grasp of your business, your journey, organization structure, market, operations, financial statements, tax returns, marketing programs, and growth potential.

We follow multiple methods to assess the business value. We analyze your historical financial statements for the last 3 years, value drivers, unique advantages, your market position and other qualitative factors to assess the value range of your business. We also research similar companies and comparable transactions that happened in the recent past. 

We will present our assessment and analysis for your review and feedback. We will walk you through our methodologies and rationale behind our assessment. It is our role to maintain realistic expectations for our clients, while keeping an emphasis on selling your company at the maximum price. If there is a substantial gap between your expectation and the value range presented, we will discuss with you ways to increase the value,  time and effort needed to accomplish that. 

Once you have sufficient time to internalize the value range and finalize the asking price, we will start building the Information Memorandum. We will collaborate with you to develop this informative document to showcase the company in the best light possible. We will be honest in the portrayal of the company so that we win the credibility of the buyers early on.

We will work with you to identify potential weaknesses and risks of the company and plan to address them if possible. We will educate you on the deal structures and connect you with tax experts so that you are aware of the options and tax implications.

We will brainstorm with you early on to determine the ideal buyer profile. We will conduct market research to identify potential buyers and channels to reach them. Then we’ll develop an effective marketing strategy that will involve crafting ad messages, developing an Information Memorandum, building target lead lists, running outbound campaigns and leveraging social media effectively.

A seasoned M&A advisor can quickly determine who is a serious buyer and who is a tire kicker. Furthermore, a serious buyer needs to be a qualified buyer too. We conduct interviews, do research and screen the buyers for you. A seasoned advisor will evaluate the buyer based on strategic fit, prior buying history, acquisition experience, whether the buyer is asking relevant questions, his/her disposition, etc. We carry out this process quite discreetly and professionally. We use CRM tools to track buyer activities and archive them for our future reference.

If a buyer has qualified and demonstrated their interest in the business, we will coordinate an initial buyer–seller meeting. At this point the buyer is expected to have learned adequately about the business through IM and interviews with M&A advisor. These meetings are designed to familiarize the parties, share pertinent information, and to determine if they should proceed to the next step in the process. If both parties recognize a potential deal between them, we will have a second meeting, which is most likely an in–person meeting to view the facility and get a sense of the business’s operations. If you want this to be discreet, we will ask the buyer to visit after office hours.

A Letter of Intent (LOI) is a crucial part of a successful business sale, and at this point, we encourage the buyer to present the LOI. LOI is a non-binding offer but it outlines an agreement in principle for the buyer to purchase the seller’s business, stating the proposed price and terms.

We assess the financial soundness of the buyer if the buyer is an individual buyer. We connect the buyer with SBAs in our network. SBA feedback can be an important vetting process for such buyers.

Before we embark on a serious negotiation, we will work with your CPA to understand the tax impact and present you options for the deal.

Once the LOI is negotiated and mutually agreed to by both the parties, we kick start the due diligence process. Due diligence is buyer’s investigation into your business.The objective is to give the buyer the confidence that they are getting the business worth their money.This will involve domain experts like CPAs, attorneys, technical experts, etc., from both the sides.

We are experts in managing this due diligence process. We will maintain a data room so that documents are exchanged in a secure and disciplined manner. We have run many such cycles and we manage this like a tight ship, so that this is concluded on a timely basis. 

As the due diligence progresses, we will coordinate with attorneys of both sides to draft the definitive Purchase Agreement. The Purchase Agreement and additional agreements, like the Employment Agreement, will be negotiated by both the parties with the help of their respective attorneys. All required documentations and records will be presented to the attorneys in preparation for the close.

After a satisfactory receipt of all documents and records, funds will be transferred and signed documents will be exchanged to indicate that the transaction has been consummated.

After the big day starts the transition. You will start training buyers or nominees of the buyer on various aspects of the business. Employees, customers and vendors need to be communicated about this transition and you may want to assure them of a seamless transition. Embrace the changes and start enjoying the next chapter in life.

Business valuation presentation—Your advisor will present the valuation. This will be an interactive session where your questions will be addressed and we will give you the next steps for a successful exit.