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How VR Works for You

M&A work is demanding, no doubt about it, but once you’ve made the commitment to sell your most difficult work is over, that’s where we come in. Your enterprise is entirely too valuable to rely on hope as a strategy for selling. Our proven approach to preparing, marketing, negotiating and closing your transaction will ensure that we’ve found the best partner to carry your company into the future. Although every middle market transaction has its nuances that make it truly unique, our management of the transaction remains comparatively constant.

Proposal Timeline:

Opportunity Review:

  1. Initial fact finding meetings with company directors to begin preliminary assessment of value range.
  2. Determine if now is the time to sell or should a value enhancement plan be implemented first.
    • Owner(s) need $10M to reach their future goals but the business is more likely worth $7M we need to implement an enhancement plan to bridge the $3M gap necessary to achieve the owner’s objectives.

Adjusting Financials:

  1. The financials of the company need to be reviewed and adjusted to extract the most accurate representation of company earnings.
    • Collect prior years income statements, balance sheets and tax returns.
  2. Collect data on company assets and adjust to fair market value.
  3. Company directors get a list of questions to help us understand your business for evaluation. 

Evaluation:

  1. We will assess the collected data and determine a reasonable value range your company could expect to realize in a competitive market.
    • Meeting with company directors to discuss the expected value, your approval or disapproval of the value range is required here.  Time is very important and we do not want to squander yours or ours unnecessarily.

Marketing:

  1. Prepare offering memoranda, executive summary and financial summary for potential suitor review.
    • Approval by company directors of marketing materials.
  2. Conduct research to identify most likely acquisition candidates.
    • Solicit the list of buyers through phone, mail and electronic marketing.
  3. Meeting with company directors to discuss potential candidates.
    •  Obtain approval or disapproval to engage qualified interested parties.
  4. Your representative will execute confidentiality agreements; submit company executive and financial summaries for their review then answer initial questions.
    • If the potential acquirer is qualified and seems to be a good fit with your objectives and company culture we will begin setting up conference calls.
    • Your time commitment consists of conference calls typically 1 to 1 ½ hours in length.

Structuring the Deal:

  1. When we get an indication of interest that is within the expected value range, we will go directly into a meeting.
  2. Your dealmaker will communicate with the potential buyers in an effort to obtain an LOI (letter of intent).
    • LOI’s should have as much detail about the deal structure as possible, this part can be very complicated and meticulous but this is where your VR representative’s value really comes through.
  3. Once we have the LOI’s we will negotiate them with the buyers in an effort to secure for you the best offer.

Due Diligence:

  1. Once you settle on an LOI two things happen:
    • Your attorney begins reviewing the LOI that you will be signing.
    • We begin due diligence on the interested party if it is someone that neither you nor VR knows. Due diligence on the buyer is very important as this is a pivotal point in your transaction. Once you sign the LOI marketing on your transaction typically stops as a condition of the LOI.
  2. After we have agreed on a LOI, we need to give the buyer time for their due diligence on the company.
    • This is a period of time where the buyer is entitled to ask for and review virtually any aspect of the business, this can take anywhere from 30 – 90 days.  Your VR representative will ensure that this investigation is structured to minimize liability should the buyer ultimately not purchase the company.
  3. The single fastest way to lose a qualified buyer is the discovery of a material (negative) surprise during due diligence.  A negative surprise in due diligence will impair the buyer/seller trust relationship and is virtually impossible to correct!
  4. Keep in mind that you cannot sell your headaches, you must disclose and discuss everything prior to due diligence; a potential headache for you may be seen as a molehill to the right buyer.

Closing:

  1. Your attorney will be responsible for reviewing the buyer’s legal documents as middle market closing documents are characteristically highly customized to each transaction.
  2. Your VR representative can significantly reduce your legal fees with thorough representation prior to the construct of initial legal documents