Knowing how to run a M&A sale process protects the confidentiality of your company’s information from competitors while demonstrating that it is a valuable acquisition target. Learn how to prepare far in advance for a successful exit, develop relationships with key constituents, put your best foot forward with buyers, and mitigate risk during the sale process.
1. Implement a Data Room to Streamline Recordkeeping Long Before the Sale Process
Preparation is the key to a successful M&A sale process. The more thoroughly and consistently you’ve prepared the data room throughout the hold period, the quicker you’ll be able to move through processes upon entering the market. The sales, customer, and operational data gathered here should be designed to answer questions from potential buyers.
Once you’ve formally engaged with an investment banker, they’ll expect to compile a Confidential Information Memorandum (CIM) to help sell your portfolio company. That requires you to have diligence information and a virtual data room in place, which will be integral once the selling process begins to allow buyers to perform timely reviews of critical documentation.
In the 6-12 months prior to a sale, prepare your business for buyers by addressing existing issues. Examine the following categories of your business for potential problems:
- Facilities and business units. Are any of these underperforming — and if so, why?
- Margin enhancement. How effectively have you maxi...