This often begins a couple of years prior to a sale. We will analyze historical performance of the company and ensure that it supports the company’s revenue and profit projections; assist in the identification of all potential EBITDA adjustments; review and assist with refinement of critical company sales and operational information. Where there are areas that need your focus to maximize sale value in the months and years ahead, we will make specific recommendations.
Brentwood Growth will assess and advise the company about how financial performance and valuation are likely viewed by the market. We will work with management to demonstrate how the company’s core strengths represent value-add or value creation to potential acquirers. We will consider all three buyer groups (financial, strategic, and owner/operator) while considering SBA funding parameters to determine different ways a sale could be financed. We will give you a specific value range and the assumptions behind that range.
We will prepare all the marketing materials, work with you to identify which of the three buyer groups (financial, strategic, and owner/operator) are appropriate, and then execute the listing strategy. Utilizing proprietary databases built through the years, offshore resources to build strategic list, and subscribed portals, we will obtain maximum exposure. We will vet and qualify potential buyers, then negotiate an appropriate term sheet. We will keep the distraction away from you and only introduce you to vetted buyers.
We will preserve value for your company by bringing our experience of successfully managing the buyer’s due diligence on the company. We will manage this phase based on good preparation and transactional experience, while preserving value by managing any potential purchase price adjustments.
We will work with company management and legal counsel to identify critical areas in the documents to make sure the ‘deal’ is not eroded by Reps and Warranties. We will ensure that the Reps and Warranties are reasonable and represent the ‘market’.
We will work with management, lawyers, and the buyer to achieve timely completion of transaction documents, thereby guiding management in the completion of transaction disclosure schedules. We will stay on top of the buyer during the process to drive timely execution.
Generally, it takes about six months from the time a business is listed to the closing of the transaction.
Your business should be listed for a realistic price that is close to what it will sell for, but at the same time, leave some room for negotiating. When determining the price, Brentwood Growth uses a combination of an EBITDA appropriate industry multiple.
The sales process consists of listing the business, locating a buyer, negotiating the terms of the sale, executing a letter of intent, undertaking due diligence, and closing. Some of these tasks are the responsibility of the attorneys and CPAs that represent the sellers and buyers.
You have no obligation to tell the truth concerning the actual financial and market status of the business. After a buyer is found, you will most likely have to maintain and operate business as you normally would between the time a contract is signed and the closing. We recommend that you have an attorney advise you or specific responsibilities and obligations.
Usually, the prior owner is required to stay on as an employee for a reasonable period to train the new owner and to introduce him or her to the customers, employees, and suppliers. Prior owners are compensated as an employee. Depending upon the circumstances and your level of interest in staying on, your time commitment could range from as little as a few weeks to several years.
Generally, prospective buyers are questioned in-depth with respect to their financial resources as well as their business experience. In some cases, a buyer may need to give proof of liquid funds (capital) prior to making introductions to ensure that the buyer has the financial wherewithal to consummate the transaction.