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Planning the sale of a business is a complex process that requires care, strategy, and appropriate guidance. If you are considering taking this significant step, it is crucial to be well-prepared to face the challenges and maximize the value of your business. In this article, we will explore five essential topics that can be decisive for the success of a business sale operation. From the importance of confidentiality to the need for a team experienced in mergers and acquisitions, we will address the critical aspects that will help ensure a smooth and profitable transition.
If you are thinking about taking the first steps in a mergers and acquisitions process, we previously shared four precautions to take before selling your business, having duly safeguarded the pre-operation points, the more formal process of selling/raising capital now begins. To support companies in this phase, we also share a set of factors to consider to maximize the success of the operation. Stay with us to find out how you can sell your business effectively and with confidence.
Market credibility is one of the most relevant assets for the success of an organization. Public knowledge about an ongoing sale process could jeopardize the ordinary course of business (i.e., distrust on the part of suppliers and customers and fears about the future in the case of employees).
In this context, it becomes crucial to assess the real interest of investors (through the dissemination of anonymous teasers to entities with interests in the business) and the signing of a confidentiality agreement (NDA) that allows the circulation of information with protection for both the investor and the company.
Once one or more entities declare interest in obtaining more detail about the company, it will be necessary to proceed with sharing additional information (information memorandum and, subsequently, due diligence).
In this sense, documents must be prepared for dataroom sharing including financial statements, permanent certificates, social pact, contracts, among others. It is critical that the information shared is true and faithful to the situation of the company. Opacity or inaccuracy in the information can lead to a posture of mistrust on the part of the potential buyer and, with that, to the devaluation of the company or, at the limit, to the suspension of the business.
The sale process can be demanding for the partners/shareholders. However, it is indispensable to continue to pay attention to the activity, ensuring the normal course of operations. During negotiations, interim data for the current year will inevitably be requested, so neglecting the business can lead to the devaluation of the company. It is common even for the value of the proposal to depend on the verification of certain assumptions, based on certain variables at the time of contract formalization.
As a rule, a merger and acquisition process is composed of various phases, including analysis by various parties, deliberation, due diligence, drafting of legal documents, among others, which makes it prolonged over time (a merger or acquisition process may take between 6 to 12 months). Thus, a patient posture will help the smooth running of the process, understanding that just as the seller had to prepare their company for sale, the investor also needs time to prepare for integration.
Finally, understanding the difficulties that an M&A process raises, it is crucial to seek the support of an experienced and reputable M&A team. This support to the sale process will lead not only to the reduction of the time demand for the selling CEO but also to the maximization of the company's value in the negotiation process, through the involvement of specialists in the topic.
Selling a business is a sensitive and demanding matter for all parties involved, but Yunit is prepared to assist you in this phase of your journey. Our proximity to Portuguese SMEs allows us to understand the delicacy and importance of this topic for you and your business.
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