How to Sell a Business

Introduction

• The concept of tradecraft – why a sales process should be bespoke
• The place of judgement
• How to (and how not to) debate a point

Understanding why businesses are sold – and bought

• Many circumstances may drive a sale
• Course focuses on ’willing sellers’, not ’ forced sellers’
• Why understanding buyer motives is equally relevant

Choosing an adviser – seller’s perspective

• How to differentiate and choose the right adviser

Alternative methods of sale

• ‘Seven solutions’ framework
• When is an IPO a realistic option?
• Financing - alternatives to a direct sale
• Why a merger is rarely a good idea
• Private equity/ MBO: positives ... and reservations
• Auction sale to trade

Pre-sale preparation

• What steps can or should be considered, and why?
• Contrast long-lead time, multi-year preparation with immediate launch
• Focus on the presentation of ‘clean’ financial information
• The role of management – incentives and rewards

• Two case studies - Dealing with an inbound approach and no prior preparation

Positioning a business for sale – case study/ worked example

• Based on a real-world transaction
• You’re given key financials and market backdrop

• Valuation comparables data is provided

• Your task is to marshal a series of arguments aimed at maximising buyer interest and value to the seller

Business value framework (Brief *)

• Three main approaches: assets, earnings, market
• Focus on multiples to understand the approach most commonly used
• Why is EBITDA the most common value driver
• Enterprise (business) value and equity value

 Tradecraft and timetable; process choices

• Sell-side best practice
• Review the classic M&A auction process
• How many buyers to approach?
• Transaction marketing documents – the role of teaser, IM, and management presentation
• Principles underlying information release and what this means for buyer and seller
• Evolution from expression of interest through to indicative and final offers

• Case study – ‘under the radar’ marketing – a twin-track sale
• Case study – use of A and B lists
• Case study – classic auction approach

Due diligence in the sale process – seller’s perspective (Brief **)

• The place of due diligence in M&A
• Breadth of due diligence areas – may surprise you
• Three ways in which due diligence can, and will, affect the deal
• Three possible approaches to due diligence
• Stopping diligence from causing delays

Driving process and price

• Techniques for managing buyer interest
• Driving value across the whole deal
• Bringing a sale process to a head

• Case study – driving the price through a successful auction process

Heads of agreement

• Three ways to use these to the seller’s advantage

Cash, debt, and working capital (Brief ***)

• Why do deal terms have to reflect these – and how
• Seller perspective on these key value points
• Process for finalising - Completion accounts vs locked box – When is each approach appropriate?

• Case studies – completion accounts and locked box (with ticker) deals

Sale and Purchase agreements – key issues for sellers/ financial advisers

• What the financial advisers have to take the lead on in the SPA
• Understand protections that buyers may seek – and when these are realistic/ necessary
• Seller’s warranties and Disclosure Letter – interaction with due diligence

At Redcliffe, our business selling training is conducted by a seasoned expert with more than 30 years of experience in corporate finance and capital markets. Having held key client-side positions and led advisory teams, our trainer offers in-depth insights drawn from decades of hands-on experience.

At the Department of Energy, he was a civil servant involved in the privatisation of British Gas, a global IPO involving a large advisory team. He also worked in the Hungarian Government for two years (1990-92) with the privatisation agency, collaborating with numerous advisory firms, as the changing political environment triggered massive ownership change.

Our expert has held prominent roles at leading investment banks, including Swiss Bank Corporation International (now UBS) and Lazard. He also co-founded a successful M&A advisory boutique. He retired in 2021, after a distinguished 13-year tenure in KPMG's global M&A business, based in Scotland.

Drawing on extensive experience in business sales and a wide range of M&A and equity transactions across North and Central America, Asia Pacific, Europe, and, more recently, Africa, his courses—including business selling training—are enhanced with real-world case studies from transactions he's personally led, seamlessly combining practical insights with key theoretical concepts.

How to sell a business covers the important objectives you’ll face:

• This course is appropriate for business owners/sellers and their legal and financial advisers
• Enable practitioners with less experience to accelerate their learning around the sale of a business, through discussion of tradecraft, alternatives, case studies, and best practices
• Give an understanding of why businesses are sold, and also why they are bought
• Help sellers understand the options open to them in planning a process and the choices at each stage
• Draw out key value points and other commercial terms where wins and losses may ensue
• Business selling training empowers participants with the confidence to anticipate and navigate the complexities of the process

How to sell a business is a ‘must know’ for anyone involved, or expecting to be, in the sale of a business, including:

• Business owners considering a sale, especially owner-managers who may wish to have a better understanding of what a sale involves and the alternatives to a sale
• Family business advisers
• M&A professionals in investment banks, boutique advisory businesses, and the corporate finance arms of accountancy firms
• Corporate business development teams, for example, in large, diverse PLCs, where disposals of parts of the business may be on the agenda
• Venture capitalists wishing to understand the options for their growth investments
• Private equity professionals

And a ‘nice to know’ for:

• Legal and other advisers involved in the M&A process, seeking a better understanding of the business sales process and how sellers and their financial advisers initiate deals, structure sale processes and negotiate terms.

Business selling training is an engaging online session tailored for those with prior experience in the acquisition process, aiming to refine their understanding of the critical elements that contribute to successful deals.

At Redcliffe Training, our course on how to sell a business covers every key aspect of the process. From understanding the motivations of potential sellers to navigating final pricing and legal agreements, we provide comprehensive guidance every step of the way.

A key element is explaining the importance of thoroughly preparing a business sale and the benefits this brings, through a focused sales effort aimed at maximising value.

The principal steps in the sale process, and the key documents at each stage, are clearly explained in the course. An important section focuses on the value of understanding potential buyers, and how best to drive their interest: selling a business calls for a thoughtful, bespoke negotiating strategy, even if you want to learn how to sell a small business.

This business selling training offers a comprehensive foundation for anyone looking to sell a business or collaborate with sellers.