Selling a company is a time-consuming and complex process and can, at times, be emotional. We will help create significant value for the shareholders and ensure the transaction is in the best interests of the business, staff and other stakeholders. We act as your trusted advisor, managing the process from start to finish, allowing you to run your business with minimal disruption to everyday operations.
The Park 56 team will use their many years of experience in M&A and finance to:
- Set up a process around your needs and manage the deal process end-to-end
- Create the marketing materials needed for the sale process
- Build a financial model to support the marketing materials
- Generate interest in the business through our extensive international network of
strategic buyers and private equity firms to create significant value
- Support due diligence and coordinate other advisors, such as lawyers and tax advisors
- Support contract negotiations to help minimise your legal exposure
In addition to sell-side advisory, we can, in select cases, support you with an acquisition process (buy-side advisory), work with scale-ups in raising new (equity) financing and prepare valuation reports or ‘fairness opinions’ in relation to buy-outs of a (minority) shareholder(s).
Finding a strategic buyer for a critical information company
We were approached by the owners of a German critical information company. Following a strategic review, they turned to us to help them sell the business as it was no longer considered strategic to the business and capital needed to be freed up to invest elsewhere. Park 56 was selected because we were advisors to sellers in an earlier acquisition the company had made and we had proven how to successfully deal with conflicting interests to get a complex process successfully over the finish line.
Extensive preparation to understand the business and its value drivers
The first step of the project was to work with management to fully understand the business, its value drivers and competition. We then defined the equity story and agreed on a financial model. We took special care that the model and key performance indicators were consistent with the equity story management wanted to tell. This extensive preparation allowed us to talk to potential buyers with full knowledge and energy during the process.
Parties initially approached with a teaser memorandum
Based on the business’s equity story and the needs of the owners, as well as Park 56’s extensive knowledge of the industry, we prepared a list of potentially interested parties who were approached with a teaser memorandum. Because of our many years working in the industry, we knew, in almost all cases, which person to best approach within the company. When interested, and after signing a non-disclosure agreement, these parties were invited for a fireside chat with the CEO. In parallel, management and Park 56 drafted a more elaborate management presentation for an in-depth conversation with interested parties in the next round. These presentations were held with a shortlist of parties selected after the fireside meetings.
Indicative offers submitted based on management presentation and Q&A sessions
After the management presentations, interested parties submitted indicative offers which we analysed against quantitative criteria (e.g. purchase price, any earn out) and qualitative criteria (e.g. implications for staff, deal certainty, track record of the bidder closing transactions). After discussions with the client, the party with the best offer was selected and exclusive negotiations and due diligence started. The buyer and his advisors received access to an electronic dataroom which was set up with the help of Park 56 containing all relevant information about all legal entities, material contracts, employment contracts, financial accounts and litigation, if any. In addition, the buyer had further Q&A sessions with management, which were prepared in detail by Park 56 and management.
Due diligence and contract negotiations led to successful close after four months
Based on the due diligence findings, the client, with the support of Park 56 and its legal advisors, negotiated the sales contract, including closing mechanism. While in earlier discussions parties agreed on the enterprise value for the business, through the closing mechanism, the enterprise value was adjusted for actual cash, debt, and working capital to come to the final purchase price of the shares. Calculating the final purchase price requires an eye for detail and patience, because in those last few days before closing, significant value can be transferred.
The transaction was successfully closed within a four-month period.