The business sale process has a number of distinct stages and typically takes 6 to 10 months to complete.
There are strategic and financial options. The right buyer is the one that benefits the most from the purchase.
Before proceeding down the M&A path, here you can familiarize yourself with the terminology and typical documentation used in the process.
Here we summarize common Mergers & Acquisitions (M&A) acronyms, abbreviations and definitions used in the M&A process. The M&A Process One of the first documents used in the M&A process is a one to three page no-names summary description of the opportunity typically called a teaser. If the teaser is of interest then parties will…
How long does it take to sell a business? Milestones in a sale process are outlined in the following chart. Milestone Timeframe Preparation of the marketing materials (by the advisor in concert with the seller) and due diligence materials (by the seller). The documentation including a teaser, CIM and buyer list,…
How do you select the best possible buyer for your business? Simply put, companies with an ability to pay and an interest in paying a premium. Assessing the ability to pay for private companies is not as straightforward as it is for public companies, which have to disclose their financial information to their shareholders (by way of EDGAR in the…
There have been numerous studies on the difficulties of successfully completing acquisitions. Some studies suggest that the majority of all acquisitions fail. We won’t debate what is a success or failure, and over what time frame it should be measured here but what we will do is review four leading Canadian software companies and examine their…
What will a strategic buyer pay? Ideally a premium, but what defines a premium? By definition, it is higher than the average price. But if the market will ultimately determine the price, where do you start? Start With the Notional Value A notional value determination is one in absence of an open market transaction,…
Five Examples of acquirers paying a premium. What are buyers looking for in acquisition targets? The objective of an acquisition is to create value. This is accomplished by improving profitability and/or reducing risk; both enhance earnings quality and drive value. More specifically, acquisition objectives can include achieving economies of scale or economies of scope, vertical…
