NEBC operates as generalists, working with clients in diverse industries,
from manufacturing to services, from high-tech to basic industries. We feel comfortable doing so,
and have been successful doing so, because each sell-side transaction has a fundamental process that
makes it run smoothly. Sure, the process must be tailored to each individual client and transaction,
but by sticking to a series of steps that are “tried and true” we avoid pitfalls common to our competitors,
and represent the best interests of our clients.
We advise clients that to complete all of these steps - to execute a successful sale of a business - takes
9-12 months in most cases.
- 1. Review of Business
- The first step for us in any sell-side assignment is to take the time to understand the business
and what makes it successful. We need to look at a company from a “buyer´s view” and
scrutinize the operations, financials and growth prospects to understand the strengths and weaknesses of the business.
Luckily for the business owner, our diverse and extensive experience gives us a good head start in these
situations - chances are we've worked with a company in your field!
This information can be gleaned either through a meeting with the business owner (and key executives if
applicable) or through a questionnaire that can be prepared in the owner's spare time. It is really not as
painful as it sounds - but it is important to get this work out of the way up front to correctly position
the company in our marketing and recognize any shortcomings in the business.
- 2. Valuation
- For the business owner who has built his business from scratch, or at the very lease has grown it
significantly, the question is - “how much is my business worth?”
We strongly recommend in most situations that business owners enlist our affiliate, Leo Delisi,
to conduct a valuation of their business. An NEBC valuation is a proprietary
document designed to help you see and understand the value of your company more clearly.
This detailed document, developed in accordance with the emerging standards of American Society of Appraisers
and Institute of Business Appraisers, recasts your financial statement to better reflect earnings.
It credibly forecasts your company´s near-term future. And it avoids the unpardonable sin of taking any
of your company´s attributes for granted. An NEBC valuation establishes
an objective argument for your company´s worth.
At this stage the business owner gains comfort from the value likely to be obtained in the transaction.
We say to the business owner: “we are confident that we can sell your business at or greater than the
value determined by this third-party appraiser.”
During the marketing stage, potential buyers receive a confidential business profile. Drawn in part from
your valuation, these profiles establish common ground that both seller and buyer can appreciate,
and form the basis for ultimate agreement.
- 3. Marketing / Targeting Buyers
- Following on the understanding we have gained through the review of the business and the valuation,
we are ready to market the business to potential buyers.
First, we prepare a confidential business profile. This document concisely and convincingly portrays
your business - what makes this business an attractive acquisition/investment opportunity. The operations,
financials, industry, competition, employees, facilities, etc. We do the leg-work to portray your business
in a favorable light.
Second, we develop a targeted buyers list. Buyers for our transactions come from diverse sources:
individuals or financial investors known to us through previous transactions and our every day dealings;
companies or individuals brought to our attention through our affiliates and network of intermediaries and companies that
we identify as being in the same industry or one that would be a strategic fit.
It is important to focus on this last set of buyers for a minute - your competition!
Though this depends on the business, maintaining confidentiality is often crucial to business owners.
It is for this very reason that we develop a targeted buyers list and discuss it with the business owner -
we don't blanket the world with the news that you are selling your business!
Third, we market the business. Maintaining your confidentiality, we contact each individual buyer on
the developed target list. How? Usually the old fashioned way - getting on the phone and discussing the
opportunity with them - screening buyers for potential interest while only providing them with limited information.
Fourth, as we screen buyers and find those that are interested, we make each sign a Non-Disclosure Agreement.
This Agreement prevents the prospective buyer from revealing information received from
NEBC or from you, or otherwise using the information to your or our detriment.
With this protection in place, we then release the confidential business profile we developed to the buyer.
This packet provides them with the information necessary to conduct a primary review of the business,
and to further gauge their interest level in pursuing an acquisition.
- 4. Deal Negotiation
- At this point, in most situations there is a handful or more of buyers interested in
acquiring the company. They understand the business, perhaps have even met with the business owner,
and prepared to enter into negotiations on price and structure.
Achieving a consensus between the seller and buyer is an exercise in dedication and detail. There are many
moving parts in a transaction and hence the negotiation - price is only one of many. The transaction
structure, seller financing, allocation of purchase price - all of these
factors ultimately determine the net after-tax proceeds that will be realized by the seller.
At this critical point, count on NEBC to take charge. Proceeding quietly and
confidently, we are able assist the buyer as well as the seller to resolve any outstanding conflicts
and remove any and all barriers whatsoever that may stand in the way of a successful transaction.
Since communication is critical, we issue detailed status reports at every decision point. Ultimately,
we see to it that all parties are satisfied - and that the deal goes through.
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- 5. Closing
- On the final day of closing, the room fills up with more lawyers, accountants and other professionals than
the business owner would ever want to see. But who is there standing by your side? NEBC,
naturally, which has served as your advisor throughout the process. We represent your interests through this
final day, ensuring that the transition is successful - down to the final detail on closing day.