Seller Services
The scope of sell-side assignments varies depending on the goals of each business owner. Sale mandates can range from resolving family business succession issues through complete divestitures to providing business owners with liquidity and estate diversification through minority or majority equity recapitalizations. The scope of the Firm’s involvement has ranged from full scale representation, in which the Firm prepares the information memorandum, identifies potential buyers and negotiates the transaction, to special assignments in which the Firm may be retained to negotiate a specific transaction with a previously identified buyer or investor.A typical sell-side assignment involves four phases:
1) The Decision to Sell - During preliminary discussions prior to its engagement, the Firm works closely with the prospective client to bring focus and objectivity to the decision of whether to sell. At this stage, the Firm uses its experience in:
- Exploring the client’s goals and reviewing the available alternatives
- Reviewing the timeliness of the transaction
- Educating the client about the issues involved in completing a transaction
- Discussing valuation parameters
2) Due Diligence / Preparing to Sell - A definitive decision to sell and a formal engagement trigger the due diligence stage of the process. The experience that the Firm’s investment bankers bring to this process enables them to recognize and capitalize on values that others may not see. The due diligence effort involves:
- Assessing the company’s strengths and weaknesses
- Analyzing the company’s historical earnings and projected future performance
- Reviewing the company’s operations and management infrastructure
- Researching the company’s industry and competitors
3) Marketing the Business - Bluestone implements a rigorously planned marketing strategy. The Firm prepares a comprehensive confidential information memorandum that describes the client’s business and highlights the strengths of the company. Drawing on its extensive network and proprietary database, the Firm prepares a well-researched list of potential acquirors that includes strategic buyers, foreign corporations, and private investment groups. Throughout the marketing process, the investment banking team’s goals are to:
- Contact only qualified parties who have the financial means to consummate a transaction
- Maintain confidentiality during the process
- Contact acquirors within a short time frame to minimize rumors and maintain momentum
- Insulate management from the marketing effort, allowing it to focus on operations
- Obtain indications of interest by specific deadlines
- Select the winning bid and negotiate an agreement in principle
4) Final Negotiations and Closing - After the selection of the most desirable buyer, the agreement in principle is negotiated and formalized into a definitive agreement. In this crucial stage when transactions often falter, Bluestone's senior-level attention and hands-on execution help ensure our client's success. During this stage, Bluestone guides the deal to closing by:
- Negotiating the agreement in principle into a definitive agreement
- Introducing, if necessary, competent legal and accounting expertise
- Assisting management during buyer due diligence
- Addressing sensitive issues such as employee continuation, representations and warranties, and the form and timing of consideration
Identified Buyer Situations. At times, a seller may have already identified a buyer and even agreed on some of the basic transaction terms. In such a situation, the seller will still benefit from engaging Bluestone. The Firm’s professional assistance helps the seller avoid numerous pitfalls in the transaction process; gain a clear, objective view of the value of the business and; if appropriate, expand the potential list of buyers. In many cases, the engagement of an investment banker can motivate the buyer to complete a transaction expeditiously to avoid a potential auction process.
