Sales and Divestitures
When our clients plan to sell a business or divest a division or subsidiary, there may be many goals they wish to accomplish, including:
- Maximize the net cash received in a transaction
- Find a strong strategic or financial partner that can either provide capital for expansion, provide new products or give them entry into new markets, or other synergistic benefits
- Provide for the continuity and succession of the business in the case of retirement
- Provide a partner that will be able to insure the security of their employees
- Divest an operation that requires management or other resources that would not be cost beneficial for the owner to continue operating
Once we have determined the reasons and objectives of a disposal, we prepare an Offering Memorandum that contains all of the information necessary for a potential acquirer to decide if he believes the opportunity is suitable for his requirements. This memorandum is a marketing document, and will be written to present the company as an attractive opportunity.
Next we develop a list of prospective buyers with our client. This list will, as appropriate, and with our client’s permission, include strategic buyers, financial buyers and possible competitors. Once the list is agreed upon, we will contact prospective buyers on a confidential basis, with a disguised profile of the business being divested.
Part of our goal is to maintain secrecy of the sale, and not alarm the company’s employees, or create rumours in the markets our client operates in. If a potential buyer is interested, we will have them sign a confidentiality agreement that will prohibit them from disclosing the fact that a sale is being considered. After they have signed, they will be released the full Information Memorandum that contains the identity of our client.
The next step for potential buyers upon review of the memorandum, is to submit initial offers based on a timetable that we give them. We will manage the process of screening the offers, and try to create a discreet auction of qualified pre-screened buyers. AMA will advise on valuation, and assist in negotiation of a price and structure that will match our client’s needs.
An extremely important consideration in choosing AMA is the fact that we offer access to both strategic and financial buyers worldwide. We have our own proprietary database of active buyers, with their acquisition criteria, goals and industry preferences. In addition, we have an international correspondent network of boutique mergers and acquisitions firms with contacts and knowledge in their home markets. This network enables us to contact qualified buyers internationally.