Guide to Selling Your Business
Identifying and Negotiating with Buyers
A typical sale process might involve the following:
The preparation of a suitable Information Memorandum – a selling document of perhaps 20 or so pages in length providing information on the business and presenting it in its best light to potential purchasers. This must comply with relevant financial services legislation.
A research exercise to identify a list of potential buyers, which is increasingly likely to include trade buyers based outside the UK and which might also include private equity companies or management buy-out or buy-in teams.
Approaches to the list of potential purchasers approved by the sellers, including sending them a brief outline of the key selling points relating to the business (but without identifying the business at this stage).
Potential buyers who express an interest will then be required to sign a Confidentiality Agreement prior to receiving a copy of the full Information Memorandum.
Discussions and negotiations will take place with interested parties, including the presentation of more information about the business, in order to establish whether there may be common ground in terms of valuation and cultural fit.
Indicative offers will be requested in accordance with a pre-determined timetable (it is often advantageous to create a competitive situation between different potential purchasers).
After further negotiations and discussions, final offers will be requested and a preferred purchaser selected.