Therefore, buying a commercial enterprise should be thought of as something akin to buying a home. Many people who have decided to buy a business are understandably keen to get on with the process.
Perhaps you want to work for yourself for the first time following a redundancy package and have money to invest? There again, you might already run a business and want to acquire another in your sector to increase your market share. Alternatively, you might simply be at a loose end following the sale of your previous business and are now ready to return to the commercial fray. Whatever your reasons for acquiring an enterprise, few entrepreneurs are truly patient and most just want to get the job of buying over with.
If you have a scatter-gun approach, then it will take you longer to find a business that fits your model. It is ultimately down to narrowing your searches so that you have greater focus. This might include only seeking those with turnovers above a certain level or those who operate in certain market sectors. Alternatively, you might only wish to search for businesses to acquire that trade in certain regions or that are franchises. The more you narrow your searches, the better the chances are for a successful early acquisition.
One sure-fire way of speeding up the process of buying a business is to look into sectors that are struggling to raise business finance or lending. It can be quicker to buy a business, even one that is perfectly solvent if it happens to operate in a market that is going through tough economic times.
Such businesses find it hard to raise capital by other means, such as borrowing from banks. Indeed, owners of such companies may want to exit quickly or have been waiting for some time to find a genuine buyer. In such cases, it is possible to expect quicker sale timescales than the average and for matters to proceed more rapidly. The Due Diligence report plays a decisive role when drafting documents and planning the strategy to be followed.
The acquiring company must have foreseen the amount of funds needed to carry out the operation. In many cases the timing of the transaction depends on the inflow of funds from the acquiring company. This operation can be leveraged. This operation usually complicates the operation of the transaction. If this article has been of interest, we also suggest you to read the following article published on our website: Legal Due Diligence.
Decision to acquire companies as inorganic growth Criteria for acquiring a company Company search and selection Planning Evaluation Negotiation Due Diligence Contract of acquisition Transaction Financing Closing Post-Closing Much more important that it may seem Contacto No te quedes con la duda, contacta con nosotros.
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The executive team, along with any outside counsel you solicit, should define the objectives of pursuing a sale and identify your ideal buyers or buyer qualities.
Compile the materials. A CIM is also called an offering memorandum or information memorandum. From there, you can extract information from the CIM to create shorter pieces of documentation, such as a teaser, marketing materials, or an executive marketing plan, which you can share with potential buyers.
This can happen one of two ways: the buyer contacts you, or you contact them. Receive starting bids. Meet with interested bidders. Receive the LOI: Those still interested will send you a letter of intent, in which they explicitly express interest in pursuing a merger or acquisition and provide a summary of the proposed deal.
You may receive multiple LOIs from multiple bidders. Phase Three: Negotiate Negotiate with all buyers who submit bids. Refer to the strategic intent you laid out at the beginning of the process, and invoke external expertise. Draft the definitive agreement.
Buyers and sellers work together to draft a final deal. Enter into an exclusivity agreement. It can take more than two months for the buyer to complete their due diligence evaluations, but you, as the seller, can help expedite the process.
Prepare all documentation ahead of time, and stay in close contact throughout the process, so you can swiftly handle issues as they arise. Get final board approval. When the buyer has completed due diligence and plans to move forward, solicit final board approval.
Sign the definitive agreement. Once you sign the final agreement, the deal is closed — you have either merged with or been acquired by another company, and integration begins. Below is a list of additional best practices, in approximate chronological order: For the Buy Side: Approach the target company diplomatically. Keep culture fit in mind — from first contact through integration. Keep communication open among all parties throughout the process.
Continually monitor the success of the merger or acquisition over time.
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