When selling your business, you should never go it alone. The process is complex, time-consuming, and more importantly, you could be leaving money on the table. Investment banks have the expertise to attract the most qualified buyers and extract the maximum value from the sale of your business.
In a 2016 Fairfield University study surveying business owners who used investment bankers to sell their privately held companies or majority stakes, all respondents said their investment banker added value to the business sale process.
What exactly are those value propositions?
Confidentiality during the sale process is imperative. In the wrong hands, proprietary information about the business can be damaging to operations and ultimately, to the sale of the business. If employees, vendors, customers, or competitors catch wind of the sale, it could damage the business and jeopardize the deal.
Before any sensitive information is divulged, your investment banker will require qualified buyers to sign a confidentiality agreement. They also understand what information should be provided at each stage of the selling process.
Investment bankers have seen it all. We understand the nuances of building a market and interacting with buyers—the qualified buyers and the tire kickers.
Our structured process allows you to create competition in the market and drive additional value. When there are multiple offers on the table, you can determine what deal terms you like and don’t like. From this knowledge, an investment banker can negotiate the best offer based on your situation and goals.
Creating a confidential information memorandum (CIM) is an important component of selling a business. This presentation is an art form in the M&A space.
Think of your business as a Rubik’s Cube—through the years, your Cube has shifted and transformed. Buyers won’t always understand why your Cube looks or functions the way it does. They’re simply looking for a solved Rubik’s Cube.
An investment banker assembles a CIM that depicts the way you solved your Cube and presents it in a way that attracts buyers. They will also come up with a strategy for presenting your Cube to the most likely qualified buyers and give them the information they actually care about to streamline the decision-making process.
Proactive Problem Solving
As with any transaction, there’s give and take during the sale process. Sellers who dig in their heels too deep will often find themselves navigating a much smaller pool of prospective buyers. On the other hand, passively accepting the terms of an offer can also negate the true value of the business.
An investment banker knows when to push and when to pull so you aren’t leaving money on the table or turning away qualified buyers. It’s no secret that selling a business can be an emotionally fueled process. As an intermediary, your investment banker can keep the deal professional and buffer out any unnecessary noise.
For over 20 years, the team at REAG has handled engagements in a wide variety of industries. This has allowed us to become experts on the selling process, develop ways to gather intimate industry knowledge quickly, and expand our contact books exponentially. It’s all led to better outcomes for our clients.
The Benefits of Working with REAG
Over the past 17 years in the business, we’ve encountered practically every scenario, good and bad. Through those experiences, we’ve developed a proven process for achieving maximum value.
When you’ve spent years building a business, partnering with an investment bank to maximize the value of that business should be a given. Plus, executing a smooth transaction without one-on-one guidance is tricky, to say the least. The fees associated with hiring an investment bank are a drop in the bucket in comparison to the money you would leave on the table without one.
Reach out and schedule a discovery call with our team today. Whether you’re a founder, a member of a management team, or part of a family business, REAG is here to help.