Money Games: Sell Your Company Now

4 Prepare a Management Presentation

A 10-page (at most) slide presentation covering the high points of the IM, an update on recent trading and a product demonstration.

5 Prepare a Target Buyer List

The best way to sell a company is to be bought, so if you have strong PR and buyers are approaching you, the whole process becomes much easier. If not, you will need to go out to target them.

All buyers are different, but once you have determined their specific sector focus and deal size, it is very much a numbers game from your point of view. Don't worry about targeting buyers too tightly at first, as you will never know who is likely to buy you unless you already have a good relationship with a target buyer (which unsurprisingly is the ideal way to approach them).

Initially approach everyone whose criteria you appear to meet, and nobody whose criteria you don't. It's usually helpful if potential buyers have a strategic or investment need which looks like you, as the more familiar they are with your sector the easier it is for them to take an informed view on your business.

The best way to find out what they are looking for is to ask them. Don't be afraid to approach people within target buyers to try to find out their strategy and approach for acquisitions, as you will refine your targeting and save yourself a lot of wasted time. Take the time to review your buyer prospects in detail, so you can customise your pitch to each of them individually.

6 Contact Buyers

While many buyers have a 'send in your business plans here' section of their website, this usually results in a review by a junior analyst who is bombarded by literally hundreds of business plans (with the obvious result). You're better off identifying a senior person at the buyer who is most relevant for your sort of business, and sending them your teaser directly. Senior people will generally ask a junior analyst to review you anyway, but you've got a better chance if it's coming from someone's boss than directly from an outsider.

With a trade buyer, you should contact the CEO, CFO, a divisional MD or corporate development director. Within a private equity firm, you should contact the most relevant partner. The best way to do this is via an introduction from someone in your contact network or a professional services firm (investment bank, law firm, accountant, etc) who already knows the buyer.

If you can't get to them this way, the next best way is to call the firm and ask to speak to "X's office." When you're put through to X's assistant, simply state who your are, that you are working on the sale of a business that you think would be interesting for X - and that you would like to know where to send the materials.

Normally the assistant will give you their email address, and you should send a brief note stating (i) what your company does (ii) any facts about performance to date (iii) your growth targets (iv) your general timetable and (vi) attaching the teaser. In terms of following up, this is best done by email at intervals of no less than one week. Buyers don't like being pestered, but will put up with being reminded about you periodically to show perseverance. Always be professional and polite, and never take a slow (or no) response personally.

7 Distribute the IM

A small subset of the buyers you contact may ask for a copy of the IM. You can try to put a non-disclosure agreement (NDA) in place before sending the IM to a buyer, but this often restricts your potential audience as many buyers won't sign NDAs as a matter of policy. If your IM is genuinely commercially sensitive, either do not send it without a NDA or remove commercially sensitive material which you wouldn't want a competitor to see. Be pragmatic.

8 Prepare a Data Room

This is an electronic copy of all documents that a potential buyer would be interested in as part of detailed due diligence. The cheapest way to distribute this is by CD-ROM, but you can go down the more expensive remote data room route. There are any number of web based data room providers, but be sure that you need the flexibility they provide before committing to using them.

Data rooms usually include materials to enable due diligence in the following categories:

• Legal
• Business
• Organisation, staff and pension
• Technical
• Financial
• Tax