This is a starting template, which is customized for each new sellside client.

Create a Short Teaser

This 6-12 sentence teaser describes the company but doesn’t reveal exactly which company it is. I send this to prospective buyers to test for interest.

1. If a buyer expresses interest in the deal, I send them the NDA to execute..
2. I then send this buyer the Company Overview.

Select the Non-Disclosure Agreement “NDA”

The seller selects an NDA they would like to use with prospective buyers. We can use the seller’s NDA or I have a standard NDA which I have used for many years.

Create the Company Overview

The Company Overview describes all of the aspects of the company and includes the financials. These range in length from 8-30 pages depending upon the company and the seller’s preference. The Company Overview is sent to prospective buyers after they sign the seller’s NDA. I recommend the Company Overview focus more on the actual company and less on industry statistics. In my opinion if a buyer isn’t already aware of the industry the seller’s company is in, there is little chance this buyer will acquire the company.

See this link for a more detailed description of my “Proactive Approach to Client Company Divestitures”

Identify the Prospective Buyer Pool

The size of the prospective buyer pool can vary depending upon the seller’s company. In some cases the number of buyers can reach 300. These buyers could be from more than one industry or vertical, and either strategic or financial buyers. The identification of additional prospective buyers to contact is ongoing until there is a Letter of Intent in place.

Create the Buyer Status Spreadsheet

The Buyer Status spreadsheet is my daily working document and is only seen by my sellside client. This spreadsheet shows the status of each buying prospect I reach out to, exactly what information each prospect has received (and on what date), and a few comments about each prospect. This is also where the seller and I add additional prospective buyers for me to contact. I have past examples of these I can provide to prospective sellside clients.

Divesting working phase

1. Continually contact and educate prospective buyers
2. Create and update the FAQ doc.
3. Provide requested information
4. Coordinate conference calls, pre-LOI due diligence and site visits

This phase lasts until a Letter of Intent is signed

Create FAQ Documents

This document lists the questions each buyer has asked and the answers the seller has provided, without mentioning any of the buyer’s names of course. I combine all the Q&A into one document then circulate it so all the prospective buyers are educated on all the questions. As time passes many times there ends up being a FAQv2 and FAQv3.

Letter of Intent

This document details the parties involved, the legal and payment structure of the deal, the assets to be included/excluded and the remaining timeline until closing.

Due Diligence and the Purchase Agreement Creation (simultaneous events)

This is the phase where the buyer verifies all the information the seller initially presented and where both the buyer and seller work on the purchase agreement.

Deal Closing

This is when ownership transfers. In some cases there is seller involvement post closing which could be in the form of full-time/part-time employment, extended consulting, migration assistance, training, etc. The purchase agreement will spell out the seller’s involvement and the compensation for such.