Transcript Observations on How to Run a Sales Process

Observations on How to Run
a Sales Process
David Eglen
Group Financial Director, Arrows Group Global
©Arrows Group Global Limited. Private and confidential. All rights reserved
Deals Completed
DATE
COMPANY
SECTOR
BUYER
March 1996
Myriad
IT Recruiter
P&P plc
March 2001
AKQA
Digital Advertising Agency
International merger
February 2007
Marks Sattin
Accountancy & Finance Recruiter
FiveTen Group
October 2013
Asclepius
Healthcare Recruiter
ICS
Early Stage Process Preparation
Information requests
– Everything you can think of and more!
– Get as far ahead of the game as you can
– you won’t catch up during due
diligence
Advisors
– Auditors
– Corporate Finance
– Lawyers
Tax implications for exiting
– Entrepreneurs relief
– EMI
– Directors’ loans
– Other
Management and employees
– Any perceived gaps in management
team need early consideration
– Ensure service agreements of key
employees are up to date
– Ensure continued incentivisation of
management
Key Phases of a Typical Sales Process
PHASE
ACTIVITY
TIMESCALE
1
Internal planning & preparation
As necessary
2
Pre-marketing
- to agree list of buyers to be approached
4 weeks
3
Marketing
- to include review of IM and indicative offers
4-5 weeks
4
Management presentation/due diligence
- concluded with final offers
4-8 weeks
5
Negotiations, signing & closing
4-6 weeks
Exit To Trade
The right trade buyer may be able to realise synergies and pay a strategic premium
Trade buyers may well have an existing knowledge of Target’s competitive environment
Day one cash out likely to exceed PE but may be some deferred/earn out element to
consideration
Can be slow moving with lengthy approval process
Confidential and commercial sensitivity must be managed
Exit To Private Equity
There are an ever-growing number of PE firms, family offices and similar investor groups
PE interest can be guaranteed for attractive assets
Non core “passive” shareholders likely to be fully cashed out but key employee
shareholders likely to be subject to significant roll over
Management team is crucial as they will drive future growth
Final Observations
Hitting numbers throughout process is key as missing forecasts may result
in disproportionate downward price adjustments
Management commitment is vital for financial investors and they need to
be presented as committed, united and hungry for next phase of growth
Cash free, debt free
Questions?